Property consultant Jones Lang LaSalle expects the number of skyscrapers in Jakarta to double by 2015 as developers tap into the booming demand for property.
Anton Sitorus, head of research at the company’s Indonesia arm, said that Council of Tall Buildings and Urban Habitat data shows that Jakarta now has 75 skyscrapers — buildings with height of more than 150 meters — up from 40 skyscrapers in 2009 .
Anton said that proposed projects by property developers indicate the number of Jakarta skyscrapers will hit 150 by 2015. Another 100 skyscrapers are expected from 2015 to 2020, taking the total to 250.
The new skyscrapers combine office towers, hotels and residential buildings.
“Big institutional investors are returning to Indonesia, creating big corporate growth in the country and high demand for properties,” Anton said on Tuesday. “Its the beginning of a property boom in Indonesia,” he said.
Anton added that Indonesia had seen similar trends in 1995, when high economic growth resulted in an increasing number of high-rise buildings.
One high-profile project starting this year is The Signature, a 638-meter tower that will be build in South Jakarta’s Sudirman Central Business District, Anton said. The project will be built by the Artha Graha Network, controlled by Tommy Winata, in partnership with MGM Hospitality. Requiring Rp 18 trillion ($1.9 billion) in investment, it will be the fifth tallest building in the world when completed in 2017.
At the moment, the tallest building in Jakarta is Wisma 46, a 262-meter office building in Sudirman built in 1996.
Anton expects there will be 3.2 million square meters of additional office space in the next six years in the Central Business District, which encompasses the SCBD. That would be almost double the existing 4.3 million square meters.
But expectations of a swath of new buildings raises concerns an oversupply may lead to a property bubble.
“If the price increases do not reflect the demand growth, it could cause a bubble,” said Budhy Siallagan, property analyst with eTrading Securities.
He said demand needed to stay high to balance high supply, and to maintain property price stability.
Todd Lauchlan, country head of Jones Lang LaSalle Indonesia, said the property market in Dubai did see a bubble when the company launched Burj Khalifa, the world’s tallest building, but he remained optimistic about the Indonesian market.