With 97% office occupancy rates, Jakarta is one of the toughest cities in the world to find office space. Add cultural aspects and the puzzle becomes even more complex.
Indosight has done some of the heavy lifting for you and here are things to take into account before starting to search for office space in Jakarta.
Advice and warnings
1. Massive traffic jams
Almost irrelevant to what you are used to, Jakarta has very high congestion. Get the office as close as possible to either where you live or where your key clients are.
For example, a commute from the popular Pondok Indah residential area to Sudirman, where many offices are located would take an hour. Despite the distance between them being less than 15 km.
Severe traffic has made it popular among foreigners to live close to the office. One of the property trends is building multi-purpose areas where apartments, malls, and office buildings are built into one complex. Some examples are Mega Kuningan, Kota Kasablanca, Central Park etc.
Another option is to live in the center and rent office in suburb. This way you will be commuting against the traffic and that can save a lot of time plus a better living standard.
2. Pay in Rupiah
Rents in Jakarta are usually paid in either in Indonesian Rupiah or US dollars. Even though it might seem a lot easier to pay in dollars, you will likely save 20-30% or even more if you pay in the local currency.
3. Buying real estate
There is no real way you can own land as a foreign citizen in Indonesia according to the constitution. You can hold a land-use (Hak Pakai) deed and the land will therefore be ‘yours’ for a maximum of 70 years.
Nevertheless, Hak Pakai can be a great investment as the rental market is doing well. Even renting out your office for 10-15 years can be enough to earn back your entire investment and everything extra will be profit.
Many foreigners invest in real estate but make sure you do it wisely. Do not trust your money in hands you cannot trust.
Any apartments that are for sale will have to have a strata title deed. This enables foreigners to own an apartment or office space but not land on which it stands.
The details of owning real estate in Indonesia are complicated and we will cover this subject in future articles.
4. Long advance on rents
A particularity in Jakarta and Indonesia in general is that rental offices as well as apartments usually require an advance for a year or 6 months.
Do not let this be a surprise when starting to sign a lease. Just make sure all the paperwork is correct before handing over any money.
5. Small offices hard to find
Finding that small office you want might be difficult due to high prices and proportionally smaller market for these. Essentially, we can suggest two approaches to finding a small office:
a) Find an agent
We would recommend getting an agent to look for an office per your instructions.
Make a deal with a local realtor or someone you know to have similar connections. Let them find an office for a small fixed sum that will be paid once the lease is signed.
This would be an option for a more budget oriented business looking for a longer lease.
b) Find a serviced office
In case you are not sure how long you are going to need an office for, serviced offices might be the best choice.
Serviced offices are much like hotels: flexible leases, most costs are included, and payments can be for short periods. However, you should look out for the maximum number of people that can be working on the premises. As with hotels, they do not appreciate having more people than quoted in their terms.
Because of this, small serviced offices are best for term projects or until a company grows bigger.
Not to make you paranoid about the real estate market in Jakarta but a fair warning on fraud is in order here.
There are horror stories of various scams being used in the media now and then. Just… be careful and keep one of these stories in mind when looking for an office in Jakarta.
Use a well-known agency or hire a local assistant to do a background check before paying any money out.
Now, it might be unfair to put this under the title ’scams’. Nevertheless, have a local person with you when paying out large sums for anything. This goes double for any real estate dealings that are not mediated by large companies.
’Use a well-known agency or hire a local assistant to do a background check before paying any money out.’
7. Virtual offices & Serviced offices
a) Virtual offices
Many businesses do not actually need to have a base of operations in Indonesia. At first, a postal address will usually do it.
Virtual offices can provide you with not just an address but also a seductive-sounding administrator who can direct calls made to the company’s local phone number.
Virtual office will essentially create you a physical office presence – prominent address, dedicated receptionist, call and mail handling, meeting room – without actually having to rent an office in Jakarta.
Jakarta has many virtual office providers but only some of them offer excellent service. Over the years, Indosight has worked with most of them and we can suggest you the best ones for your company.
For a minimal virtual office you can pay as little as Rp 5’000’000 per year. More can be charged for extra services and relatively more for shorter periods.
b) Office space
Now to physical office space. You have quite possibly spent a lot of time on different sites looking for an office. It is most likely that most of the ads you have seen are out-dated and not actually up for grabs anymore.
You will find it hard going when finding an office space this way. Instead, be active and try to get realtors and agents to make you offers before they even go up online.
‘You can hold on to good employees by providing a nice office space in a good location.’
Another warning has already been made in our article Labor Costs And Employment Culture In Indonesia, but we want to bring it out again. Remember that prestige is very important in Indonesia. You can hold on to good employees by providing a nice office space in a good location. This can even compensate for a lower salary.
8. Other types of office in Jakarta
Ruko or Rumah Toko meaning ‘shop house’ is a type of building, usually 2 to 5 storeys high usually used as both a business and a home. These are extremely popular among the locals in Jakarta.
The owner does not necessarily live in ruko, it can be also entirely be used as an office building. This is good option for a foreign company that either needs a small warehouse close to office or do not have many clients coming to office and want a lot of space.
b) Budget offices
It is understandable that companies entering a new market will always be looking to start with low overhead costs. Getting a budget office space is one good way to manage these costs. Many will upgrade to better facilities when starting to make a profit.
Finding an office for 80’000-150’000 Rp/m2 a month in the city center is very unlikely. Most foreign companies that have recently entered Indonesia, are trying to save cash, or are expanding, have chosen a location in South Jakarta.
The lowest prices presented here are for space in other areas of the city. It will probably not be a good idea to set up an office in these districts. That is unless a company has manufacturing set up in the western or eastern parts of the city or has to visit the port area in the north. Coming to the center from the furthest ends of these locations is however a pain.
Another difficulty that will take up time and a bit of money when getting a more affordable office space is essential servicing. For example, it will probably not have a cleaning service that is included in the price. This usually means paying an ‘office boy’ at the end of every day or hiring a permanent person.
Even a basic office should have utilities like telephone, internet, electricity, and others connected. Maybe the agent will want to be reminded of this but in Jakarta this is usually not a problem. Due to air conditioning, electricity costs will be the biggest expense but fortunately, electricity itself is not very expensive in Jakarta.
A cost to consider regardless of how much you pay rent is that remodelling might have to be done. The longer the lease is, the more likely it is that the owner will pitch in. Regardless, it can be costly.
Mid- ranged offices have modern amenities and can be located all over Jakarta, but mostly still in the CBD and South Jakarta areas.
A mid-range office can cost around 100’000-200’000 Rp/m2 or more.
In case there is a rush to set up an work space, we can recommend serviced offices. If you are relatively sure that the space will meet your needs for years, it makes financial sense to set up a contract for a longer period. This can save you a substantial sum of money no matter what the price range of the office.
Having to host many important customers and providing employment to highly valued employees require a location that is close to partners, customers, and in prestigious surroundings.
Settings like this start at a minimum of 200’000 Rp/m2. To get this price, you would have to rent a pretty big place to get the price of a square meter down.
Downside is that utility costs can escalate quickly when going for larger space.
‘pick your location according to where most of your business takes place’
Having an office in Jakarta CBD is a very good decision when handling many Indonesian customers.
This a good sign of quality and trustworthiness for them. Due to the location of these offices, you will usually find your way to partners and customers quickly.
Having more resource will manage you to pick your location according to where most of your business takes place. For example, if you have to deal with foreign embassies there is no better place than Mega Kuningan in the CBD.
Make sure you need an office. It is a common mistake that businesses make here – getting offices that stand empty because there was fear of not getting one for a reasonable price at all. For a time, a virtual office might be enough.
Once you have decided you need an office in Jakarta, take into consideration:
Location – prestige is important in Jakarta
Price – get an office that you actually need, be ready to pay a big advance, and be aware of any hidden costs
Layout and lease – make sure these meet your needs
Traffic – it is heavy, nearly everywhere
Our suggestion is to present all these and any others you might have to an agent and make him/her find you the space. If you can pay in IDR, do it as it will save you a considerable amount of money.
We wish you the best of luck finding your new office!
Boutique Office Indonesia
Sewa ruang kantor di APL Tower Jakarta Indonesia
Rent / lease office space in APL Tower Jakarta Indonesia
Serviced office / virtual office / meeting room
+6221 2933 9389