"Indonesia Real Estate Report Q2 2013" is now available at Fast Market Research

The Indonesia Real Estate report examines the commercial office, retail and industrial segments in the context of a market which is outperforming regionally.

With a focus on the three principal areas of Jakarta, Bandung and Bali, the report covers the rental market performance in terms of rates and yields over the past 24 months and examines how best to maximise returns in the commercial real estate market while minimising investment risk and exploring the impact of international headwinds on a market that has historically proven itself to be resilient. The key potential growth areas driven by increasing activity on the part of international investors, favourable fundamentals and the potential of the archipelago's consumption-driven economy are also explored, alongside corporate growth strategies looking to both domestic and international channels for growth.

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Full Report Details at
- http://www.fastmr.com/prod/554074_indonesia_real_estate_report_q2_2013.aspx?afid=301
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That said, there is considerable optimism in the Indonesian commercial property market. The last few years have seen impressive growth in the Indonesian real estate sector. Rents were hardly touched by the global financial crisis (with the exception of the office sector) and have, in fact, generally increased over the past few years. Our latest data collection in December 2012 revealed that rents continue to soar across the majority of cities and commercial real estate sub-sectors. One substantial hindrance to both the industry and the economy as a whole is that Indonesia's physical infrastructure is substandard. The extent of future growth depends very much on the government's ability to push through bureaucratic reforms that will allow much-needed infrastructure investment, and the approval of the land acquisition bill is an important step in the right direction.

Key Points

* We are cautiously optimistic about the outlook for Indonesia's construction sector in 2013 and have maintained our real growth forecasts of 7.2% for the year. Besides favourable macroeconomic fundamentals, we expect conducive monetary conditions, increased government expenditure and the approval of a new land acquisition bill to drive construction activity in 2013. That said, this construction growth of 7.2% is still a slowdown from the estimated growth seen in 2012 (7.6%). Several downside factors (ie, deepening deficit, bottlenecks in project execution and the 2014 presidential elections) continue to prevent the sector from maximising its growth potential.
* We continue to hold a neutral bias on the Indonesian rupiah over the short term, as our expectations for the currency to hit stability have played out well. Although Indonesia's external position has deteriorated markedly over the course of 2012, it too appears to have found some stability, and we believe that pressures from the country's weakening trade position have eased somewhat.

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