Indonesia Commercial Construction Market Size (2024 - 2029)

The Indonesia Commercial Construction Market is poised for significant growth, driven by the country's strategic infrastructure plans and political stability. The market's expansion is supported by increased cross-border investments and a focus on modern commercial environments, despite short-term disruptions from the COVID-19 pandemic. The government's commitment to infrastructure development, as outlined in the National Medium-Term Development Plan, further underscores the robust prospects for the commercial construction sector. However, challenges such as competition for funding and the need for skill development in advanced technologies remain, particularly for small-scale private competitors.

Market Size of Indonesia Commercial Construction Industry

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Indonesia Commercial Construction Market Summary
Study Period 2020 - 2029
Base Year For Estimation 2023
Market Size (2024) USD 30.99 Billion
Market Size (2029) USD 45.64 Billion
CAGR (2024 - 2029) 8.05 %
Market Concentration Medium

Major Players

Indonesia Commercial Construction Market Major Players

*Disclaimer: Major Players sorted in no particular order

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Indonesia Commercial Construction Market Analysis

The Indonesia Commercial Construction Market size is estimated at USD 30.99 billion in 2024, and is expected to reach USD 45.64 billion by 2029, growing at a CAGR of 8.05% during the forecast period (2024-2029).

  • Indonesia's Construction sector is expected to grow at a rapid pace over the forecast period, not being affected much, except short term disruption due to the Coronavirus outbreak. Upgrade of commercial infrastructure is anticipated, after retention of the position by the Joko Widodo as the president, and increasing cross border investments as part of the Belt and Road Initiative (BRI) from China, implementation of the 2030 Sustainable development Goals, Indonesia's Infrastructure plan and the increasing demographic interest towards modern commercial built environment, though, short term hefty losses worth several trillion USD, might result due to the regulation of cross border traffic from China to prevent spread of the novel COVID-19.
  • By 2045, it is predicted that Indonesia would be a high-income nation with the fifth-largest GDP worldwide. As long as the nation maintains political stability, its rapidly urbanising population will continue to boost demand in the building sector.
  • Overall, Indonesia's construction industry continues to be in good shape, with robust development prospects underpinned by low inflation, political stability, a high credit rating, and responsible macroeconomic policies. Investors are urged to look for local partners who have experience and a strong network so they can gain an advantage in Indonesia's fiercely competitive building market.
  • The National Medium-Term Development Plan, 202-24, has prime focus on the development of infrastructure across the country and commercial construction is set to rise further as a part of the plan and the increasing public as well as private investments. But, increasing the skill set as per the state-of -the art technologies are a challenge for the small-scale private competitors as state owned enterprises are getting the desired funding and development opportunities. This has made finding private partner in the PPP models challenging due to unhealthy competition thriving.
  • Investments worth 400 Billion USD have been floated into the infrastructure pipeline, as against a similar 350 Billion USD in the previous infrastructure plan by the Joko Government. Keeping in mind the low rank in terms of infrastructure in the WEF Global Competitiveness Index, 2019 (50th), this investment reflects the intent of the Govt to elevate the infrastructure setup in the country.

Indonesia Commercial Construction Industry Segmentation

A complete background analysis of the Indonesia Commercial Construction market, which includes an assessment of the economy, market overview, market size estimation for key segments, and emerging trends in the market, market dynamics, and key company profiles are covered in the report.

Indonesia Commercial Construction Market is segmented by Type (Office Building, Retail, Hospitality, Institutional, and Others). The report offers market size and forecast for Indonesia Commercial Construction Market in value (USD Billion) for all the above segments.

By Type
Office Building Construction
Retail Construction
Hospitality Construction
Institutional Construction
Others
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Indonesia Commercial Construction Market Size Summary

The Indonesia commercial construction industry is poised for significant growth over the forecast period, driven by a combination of government initiatives, foreign investments, and urbanization trends. The sector is expected to benefit from the National Medium-Term Development Plan, which emphasizes infrastructure development, and the Belt and Road Initiative, which encourages cross-border investments. Despite short-term disruptions due to the COVID-19 pandemic, the market is anticipated to recover and expand, supported by Indonesia's political stability and favorable macroeconomic conditions. The government's commitment to improving infrastructure, as evidenced by substantial investments, aims to elevate the country's standing in global competitiveness indices. This growth is further bolstered by the rising demand for modern commercial spaces, particularly in urban areas like Jakarta, where coworking spaces and contemporary retail outlets are gaining popularity.

The commercial construction market in Indonesia presents a mix of opportunities and challenges. While state-owned enterprises dominate due to better funding and access to advanced technologies, there is still room for private players, especially small and medium-sized enterprises, to capitalize on government investments. The market is becoming increasingly attractive to foreign investors, thanks to regulatory reforms that reduce risks and encourage investment. Key players in the industry, such as PT Pembangunan Perumahan and PT Wijaya Karya, are expanding their portfolios to meet the growing demand for commercial spaces. The retail real estate sector, in particular, is experiencing rapid growth, with modern shopping experiences becoming more sought after. As the market evolves, it offers a competitive landscape for both local and international investors, with the potential for substantial returns in the coming years.

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Indonesia Commercial Construction Market Size - Table of Contents

  1. 1. MARKET INSIGHTS

    1. 1.1 Current Market Scenario

    2. 1.2 Technological Trends

    3. 1.3 Government Regulations

    4. 1.4 Value Chain / Supply Chain Analysis

    5. 1.5 Overview of Commercial Construction Market in Indonesia

    6. 1.6 Brief on Construction Costs (average cost, office and retail space, per sq feet)

    7. 1.7 Insights into the newly office space completions (sq. feet)

    8. 1.8 Impact of COVID-19 on Indonesian Commercial Construction Market (Analyst View)

  2. 2. MARKET SEGMENTATION

    1. 2.1 By Type

      1. 2.1.1 Office Building Construction

      2. 2.1.2 Retail Construction

      3. 2.1.3 Hospitality Construction

      4. 2.1.4 Institutional Construction

      5. 2.1.5 Others

Indonesia Commercial Construction Market Size FAQs

The Indonesia Commercial Construction Market size is expected to reach USD 30.99 billion in 2024 and grow at a CAGR of 8.05% to reach USD 45.64 billion by 2029.

In 2024, the Indonesia Commercial Construction Market size is expected to reach USD 30.99 billion.

Indonesia Commercial Construction Industry Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)