Indonesia’s commercial real estate markets demonstrate varying performance across property types and locations, according to ProSpace Indonesia’s Commercial Property Assessment. Office, retail, and hospitality sectors show distinct recovery patterns and future prospects in the country’s major urban centers.
The office sector displays the most challenging conditions, with Jakarta’s prime office vacancy rate at 23.7%, though this represents an improvement from 27.5% in 2023. Grade A rents have stabilized after previous declines, averaging Rp350,000 per square meter per month. Meanwhile, Surabaya and Bandung show healthier office markets with vacancy rates below 15%.
“Commercial property markets are adapting to structural changes in how spaces are utilized while navigating cyclical recovery patterns,” explains Wayan Sudira, Commercial Real Estate Analyst at ProSpace. “Flight to quality remains evident, with premium properties outperforming while secondary locations struggle.”
Retail properties show stronger performance, with shopping mall occupancy rates averaging 84% across major cities. Experiential retail concepts focused on entertainment, dining, and services demonstrate particular resilience, while pure merchandise spaces face continued e-commerce competition.
The hotel sector shows the strongest recovery trajectory, with Jakarta occupancy rates reaching 73% in Q1 2025, approaching pre-pandemic levels. Average daily rates have recovered to 92% of historical peaks, with five-star properties showing the strongest performance. Secondary cities show more varied hotel market conditions, with tourism-dependent locations outperforming business destinations.
Environmental certification has become increasingly important for commercial properties, with 45% of new developments pursuing green building standards. Meanwhile, flexible space solutions including coworking and hybrid office models continue expanding, now accounting for 7.3% of total office inventory.
For commercial property market briefings: Phone: +62 21 5799 8989 Email: info@prospaceindonesia.com Follow @prospace.indonesia on Instagram for updates
