The fast increase in online retail and other technology-related goods and services has made the industrial sector one of the pandemic's most resilient parts. Automotive-related businesses accounted for 58% of all industrial deals in Indonesia, according to Colliers.
For instance, a major South Korean automaker purchased over 32 hectares of land in Karawang New Industry City (KNIC). The automaker intends to turn Indonesia into a Southeast Asian manufacturing hub for electric vehicles and car batteries. This significant investment in the manufacture of batteries and electric vehicles is part of a strategic effort by the Korean automaker to take a bigger piece of Indonesia's market for vehicles, where Japanese firms have long had a prominent position.
"This significant land deal, which took place in Q3, contributed to the acceleration of industrial transactions in the greater Jakarta region. According to the data we have so far, 64% of all land sales in 2021 to date have been for real estate. Given the difficulties we have been experiencing as a result of the slow economy right now, this is really encouraging.
Added information from Colliers
The growth of high-tech industry carries on in the meantime. The surge in internet traffic and the number of businesses needing infrastructure to enable their migration from offline to online and on-premises to the cloud serve as indicators of the pandemic-driven digitalization. The internet world is a genuine, practical, and tomorrow's path in the post-pandemic world. Customers in both the public and private sectors want constant connectivity.
The expansion of data centre activities in some areas, mostly in industrial estates, was accompanied by rising demands for performance and efficiency at lower costs. Since a few years ago, they have increased the scope of their presence. Although a data centre can be constructed anyplace that has access to power and the internet, the location affects the level of service it can offer to its clients. On the other hand, a bad location may cause erratic connections and performance issues. About 14% of all land transactions to date have been attributed to data centre growth.
industries relating to automobiles About 68 hectares, or 58% of all deals to date, have been made. This is a recurrence of a few years ago, when land absorption was mostly driven by the car industry. Although not often in industrial estate sites, the demand for logistics and warehousing facilities still exists.
We noted three deals involving data centre businesses at the Greenland IE and Jababeka IE totaling about 13 hectares for high-tech industrial use. In Greenland IE, two land parcels totaling around 12 hectares were purchased by data centre businesses, while in Jababeka, the same company purchased a parcel measuring about one hectare.
This quarter, Jababeka sold 5.1 hectares in total. In addition to the deal that a local data centre company completed, a Korean leather industry purchased roughly 4.2 hectares. Still in Bekasi, BFIE informed a neighbourhood packing business of a one hectare deal. Because the majority of the land plots have been sold, other industrial estates in Bekasi are now concentrating more on the operations side and sustaining their current tenants.
In Karawang, Suryacipta registered a transaction with the chemical sector for about 1.3 hectares in addition to the significant sales made by KNIC. A Japanese company that manufactures musical instruments has confirmed a lease agreement for roughly 0.5 hectares in Kota Bukit Indah (Besland Pertiwi). Other Karawang estates that are still in operation haven't closed any deals yet this quarter, but they're still hopeful that Q4 would bring additional inquiries.
This quarter, there were no lease deals in the south that we recorded. One industrial park in Bogor that specialises in leasing both land and buildings reported that certain tenants, particularly those that rent land, are not in a position to increase their presence, and some have even withdrew from the area. Overall leasing activity in the southern part of the greater Jakarta area was fairly slow, despite one client expanding their rental space. Bogor has a limited supply of land, thus we don't anticipate any large deals in this area. Two warehouse units totaling about 800 square metres were sold this quarter, according to Sentul.
One warehouse unit has already been sold by Griya Idola in Tangerang. A larger deal could come after this smaller one in Q4. Despite being modest, transaction activity has generally indicated a bright future. Further west, Serang has so far only made a tiny contribution through the leasing of a KIEC warehouse and a 0.8 hectare parcel of land from regional building material companies. We anticipate a sizable deal in Serang in the future.
The industrial market finalised roughly 52.7 hectares of all the deals, both in terms of leasing and sales, which is a little less than in Q2. A total of 134.9 hectares, or around 70% of the total in 2020, have been transacted in transactions thus far.
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