Rental Rates and Costs
Floor Space
Lease Term
Tenant Improvements and Fit Out
Summary of Leasing Details

Rental Rates and Costs
How are rents quoted and paid ?
Gross Rent is quoted using a monthly rental rate per square meter and is comprised of the Base Rent and Service Charge. The Base Rent is typically fixed for three years, while the Service Charge is subject to review annually based on increase in a building's operating costs. Rent usually may be due quarterly, semi-annually or annually in advance. Both the Base Rent and Service Charge are subject to VAT or Value Added Tax (PPN) of 10%. Rents for higher quality buildings are most often denominated in US dollars, but Rupiah denominated rents are prevalent in the market with such rents being quoted either in Rupiah or in US dollars with a fixed exchange rate.

Is a security deposit required ?
A security deposit of 3 months gross rent is normally required before the lease commencement date and is fully refundable upon the expiration of the lease providing compliance with all lease conditions. Upon the execution of a Letter of Intent, the tenant will typically be required to pay a booking fee equal to one month of gross rent. After the Lease Agreement is signed and prior to occupancy, an additional two months of gross rent must be paid to complete the security deposit together with the first advance payment of gross rent. Additional deposits are required for telephone lines in amounts of from Rp. 2,000,000 per non-IDD line to Rp. 5,000,000 per an IDD line.

What is typically not included in the rent ?
There are operating costs that are not included in the rent that tenants should budget for, such as electricity for outlets and lighting (if separately metered), telephone, overtime electricity and air-conditioning as well as maintenance within their premises. Additionally, tenants should be prepared for possible increases in service charges since most lease agreements allow changes if such increases can be justified. In strata-titled properties, the cost of air-conditioning may also be the responsibility of the tenant.

What does the service charge cover ?
Service charges generally include air-conditioning, water, 24 hour building security, and the cleaning and maintenance of common areas during normal office hours. Electricity for lighting and outlets during office hours may be included in the service charge if not separately metered.

Floor Space
What measurement standards are used ?
Office buildings for lease in Jakarta apply the rental rate to semi gross area. The semi-gross sqm of an office is determined by adding a common area factor to the net sqm actually occupied by the tenant. The common area factor usually ranges from 8% to 15% and represents the tenants share of the building's common areas including elevator lobbies, toilets, pantries and corridors. Accordingly, the total semi-gross area of the building is the equivalent of the building's gross area less all vertical penetrations.

Lease Term
What is the typical lease term ?
Lease terms typically vary from 3 to 5 years, but may be as long as 10 years.

Do tenants have an automatic renewal right ?
Tenants are typically given an option to renew their lease at market rents after the initial lease term, whether or not this is stated in the lease. Options for further lease renewals and caps on increases at the time of renewals need to be negotiated in the original lease.

Do tenants have automatic sublet or assignment rights ?
Tenants are typically allowed to sublease the premises during the lease term with the reasonable approval of the landlord.

At the conclusion of a lease term, what is the process for handing back the space ?
Tenants are obliged to maintain the condition of the premises in good order as well as to remove the tenant fit-out at the end of lease if requested by the landlord. In practice, most landlords request tenants to leave the fit-out in an "as-is" condition and tenants willingly comply.

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Tenant Improvements and Fit Out
Are office buildings leased out in fitted condition ?
Generally, standard office buildings provide a concrete floor, demising partition, a drop ceiling with lighting, sprinklers, and an air-conditioning system.

What tenant improvement allowance is provided by the Landlord ?
A fit-out period of between 1 month and 6 months is typical during which the payment of gross rent is waived although the tenant may be charged for the use of electricity and water during construction. All fit-out costs are considered the responsibility of the tenant and fit-out allowances are rare.

What is the typical cost for fit-out, basic telecom/cabling, furniture, etc.?
Tenant fit-out costs vary widely depending on the design, specifications and size of the space to be constructed. Fit-out costs range from a low of approximately US$200 per net sqm and up.

Summary of Leasing Details

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