Some deals in Q4 2018 were dragged and finalized in Q1 2019. Some possible transactions that involve large space are expected to occur in 2019. The key strategies for landlords will focus on offering efficiency for tenants and agility space in line with the increasing inquiries to accommodate flexible leasing tenure. We think that flexibility is the new trend, particularly because a lot of companies are thinking in more practical way in deciding their premises.
We do not see much improvement on apartment demand in Q1 2019, as we believe that marketing sales are still supported by end-user type of buyers, rather than investors. Faced with intensifying market competition, developers are likely to highlight the ongoing or completed infrastructure projects as an important and effective selling strategy. Nevertheless, we remain hopeful that a revamped master plan to improve slow demand, such as implementing property regulation for foreigners, reducing property tax and lowering the interest rate, will help improve the challenging property landscape.
Competition amongst retailers remains vibrant. We expect retailers will continue to expand in the future by following the current retail trend and sell products which are highly demanded, like modern and casual fashion and coffee shop concept of stores. The metro area’s large population is still the main reason why local and overseas retailers are deciding to expand. We recommend retailers focus on selling products in specific market segments they targeted. Meanwhile, landlords should continue to adapt to consumer preferences by making more room for food and beverage (F&B) tenants, fast fashion retailers and entertainment occupiers.
The slow performance in Q1 2019 was already predicted. Business activity has yet to resume and the anticipated political event is another reason why the market in Q1 has not flourished. Fortunately, several corporate and government events had commenced and were expected to be done before Election Day. Q2 will be challenging due to festive season. Hoteliers have to keep up with their Q3 and Q4 budgets. Hoteliers are pretty sure that there will be a lot of government activities held during Q3 and Q4. To maintain loyal customers, hoteliers must also dare to offer privileges to their guests so that they would not move to other hotels, especially new hotels.
Industrial transaction took place during Q1 2019 was very much fueled by astounding sales performance exposed by Modern Cikande. Concluding a total of 67.2 hectares land, sales in Modern Cikande already represent about 61.4% of total sales for this quarter. Excluding Modern Cikande and GIIC, the overall sales performance has relatively slow, thus the market responded by the adjustment in price in order to accelerate sales volume, taking the momentum of post presidential election in mid April. In general, most industrial estates have already took the right stance in response to the market. Price adjustment, more accommodative to the potential buyers and other compelling measures has been seen over the last periods.