Jakarta industrial real estate report 2011

Having achieved the largest quarterly take-up in the last five years in the first quarter of 2011, the quarterly
net demand during the second quarter fell by over 40% to about 188 hectares (Ha). However, on an annual basis, the quarterly net demand grew by almost 90%. With the above activities, the cumulative sales rate increased to 76.4%, from 74.3% in the previous quarter.

SFBs and warehouses for lease in the review quarter also recorded a relatively strong demand. Similar to the trend of the previous quarters, industrial estates in the Bekasi, Karawang and Purwakarta areas remained as the preferred locations with almost 90% of the total transactions in the review quarter occurring in these areas, and the balance was absorbed by estates in Serang and Tangerang.

Major demand in this quarter was still dominated by foreign industrialists such as Japan with several main
business lines, including automotive related sectors.

After four consecutive quarters of additional supplies, this quarter recorded no new supply entering the
market.

However, new supplies are expected to enter the market. With no additional supply, the total cumulative supply of industrial land in the Greater Jakarta area during the review quarter remained at about 8,700 Ha.

In-line with the strong demand, the asking price for industrial land during the review quarter continued to increase. The estimated average land price achieved in Rupiah (Rp) terms increased to about Rp. 878,000 per square meters (/sq.m.) (+9.8% quarter-on-quarter).

In US$ terms, the average land price increased to US$102 /sq.m. (+11.1% quarter-on-quarter).

Despite the decreased quarter-on-quarter demand, the 188-Ha quarterly take-up represented a healthy market and is better than any quarterly take-up in the last three years. The market is expected to remain positive throughout the year with foreign industrialists dominating the demand.

Until mid-2011, the negative impact of the recent natural disaster in Japan has relatively no effect on investment decisions.

The long term impact on the industrial market remains to be seen.