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An ambitious plan to build the world’s fifth-tallest building in Jakarta’s business district is the latest testament to the city’s growth skywards, as towering condominiums and so-called superblocks jostle for space amid a booming economy.

The management arm of Sudirman Central Business District in South Jakarta says it aims to complete Signature Tower, a 638m building with 111 floors, before 2020.

This would put the Rp 9.2 trillion ($1 billion) building just behind Seoul’s Light DMC Tower, now ranked the world’s fourth- tallest building at 640m. Dubai’s Burj Khalifa heads the world’s tallest building list at 830m.

Developers are eager to meet the soaring demand for space in the capital of South-east Asia’s largest economy, after years of strong growth created a burgeoning middle class hungry for upscale city living.

“The growing demand has made vertical expansion the most obvious thing to do,” chairman of property consultancy Jones Lang LaSalle, Lucy Rumantir, said.

Now, about 5 percent of Jakarta space is vertical, but it would need to grow at least three times this figure to satisfy current residential, commercial and retail demands, she said.

Indonesia’s recent upgrade by two credit rating consultancies Fitch and Moody’s to investment grade level is expected to pull in more foreign investment, creating demand for office space and housing for expatriates, notes property consultancy Cushman & Wakefield.

Its latest report projected that condominium units in the city would more than double to reach 18,140 units this year, compared with last year. Office space is expected to grow between 8 per cent and 9 per cent this year.

Over the next decade, Jones Lang LaSalle estimates that 35 new high-rise developments will be built; as many as five are expected to have more than 50 floors.

Official data shows that Jakarta has been rising steadily, especially after the 2008 global financial crisis. In addition to 120 high-rise buildings now, 25 superblocks have sprouted across the city, mostly in south Jakarta.

Colliers International (Indonesia) said last year’s apartment sales reached the highest level since the financial crisis hit Indonesia badly in 1997, and supply this year is expected to surpass last year’s.

“The vertical growth is driven by confidence in the strong economic growth, an expanding middle class and scarcity of land space in popular areas of Jakarta,” said Ferry Salanto, Colliers’ associate director of research.

The World Bank, in a March 2011 report, says the group which spends between $2 and $20 a day forms the middle-income class.

They are now 131 million strong in Indonesia, up from 81 million in 2003. The group is growing on average by seven million a year, with rural areas showing a sharper increase. Now, around 50 million people are considered middle class in rural areas, up from 32 million in 2006.

Demand is also likely to rise in tandem with the increasing number of foreign residents, whom immigration figures show as having risen by 6 per cent to 111,752 last year.

Industry and manufacturing, trade, mining, education and construction sectors absorbed most of the expatriates last year.

Already, there are new condominiums and commercial developments in various phases of construction across the capital, including a trend of superblocks — self-contained megastructures housing hotels, residential units, malls and office towers.

Jakarta has also spawned five central business districts.

Said Winston Lim, a Singaporean architect based in Jakarta: “The speed at which the buildings are rising has been very fast, amazing.”

Some have seen almost 30 floors being built up within a year.

Real estate analysts note that most of these apartments are built by local companies in partnership with foreign ones.

Though developers are cheered by the soaring demand, urban planners are worried that lack of supporting infrastructure like roads and transportation will worsen traffic and hamper productivity.

Some of the new projects are located less than 100m apart or are on opposite sides of the road.

One such example is found along the famously jammed road of Jalan Prof Dr Satrio in South Jakarta, where at least three superblocks are expected to open by the end of the year.

The area is part of the Jakarta golden triangle that is being pitched as the Orchard Road of Singapore. It will offer a mix of premium shopping outlets, commercial office towers and lush condominiums on its peripheries.

On one side of the road stands Kuningan City by Agung Podomoro Land which has a six-floor mall, two residential towers at 39 floors each and an office tower going up to 32 levels.

On the opposite side are two Ciputra World superblocks over 11ha, being developed by Ciputra Property. They will have a 13-floor mall, a 38-storey office tower, serviced apartments and five-star hotels, among others.

Said Rumantir: “This central business district (Jakarta’s golden triangle) is still considered as the main growth area targeted by major investors, local and overseas. Though not much more space is left, this CBD has still got several locations for future development.”

Adjacent areas such as those in Kebayoran and Kemayoran are now drawing some development. Elsewhere, pockets of areas in the north and west of Jakarta have also seen many high-rise condominium projects rising, driven by their large middle-class communities and toll road access to the airport.

There is no doubt traffic is getting worse.

Urban and spatial planner Suryono Herlambang of Tarumanagara University feels that the point of vertical expansion is to create a compact and efficient city with more open spaces, something Jakarta has failed at.

The trend of superblocks, he said, has shifted traffic snarls from one place to another and created new traffic congestion zones in the city.

“The lack of urban planning prompted the development of too many central business district centres that only created new problems... turning Jakarta into a disorganised city.”

Reprinted courtesy of Straits Times Indonesia. To subscribe to Straits Times Indonesia and/or the Jakarta Globe call 021 2553 5055.