How Much is Warehouse Rental Expenses in Indonesia?
May 22, 2023
In the dynamic landscape of Indonesia's business sector, understanding the costs associated with warehouse rentals is crucial for companies seeking to expand their operations. Just as import duties and taxes play a significant role in international trade, warehouse selection holds equal importance when it comes to managing inventory and logistics effectively and efficiently.
But in general, what is the basic definition of a warehouse and what use does it serve in helping businesses besides managing their inventory or products. In basic terms, warehouses are used in storing, managing, and maintaining resources which are needed for businesses to keep track of stocks using Warehouse Management System (WMS), maintain the quality of products stored, and fulfill customers orders.
This has raised further questions on how much is warehouse rental expenses in Indonesia and other questions alike. Although in general, the price on average warehouse rental costs you should expect to pay is around Rp 60.000,- per square meter of inventory space. This price however can vary depending on different factors in which we will be explaining below.
In calculating warehouse rental expenses, owners need to not only take into account the cost of the warehouse but also other external factors in choosing the most suited warehouse to their business. These factors may include:
1. Location
Choosing a warehouse with a strategic location specifically near or in big cities is usually more costly since these locations usually have high demand in traffic and sales due to the large population of citizens in the area. This gives the company a more competitive advantage in effective product delivery and maximizing logistic efficiency.
Jakarta and Surabaya are among the highly in-demand locations for warehouse due to its populations and GDP per capita that are higher than other cities. Especially for businesses doing eCommerce activities may need to look for warehouses in these two big cities to gain market advantages.
2. Warehouse Size and Its Facilities
Selecting the warehouse with the most suitable facilities and size are important to be considered since it can impact the efficiency and effectiveness of your business and its operations as well as costs. Since the more facilities and the bigger the size of a warehouse needs to be adjusted with the type of business and service needed to maintain its operations.
3. Accessibility and Connectivity
Aside from locations like big cities, warehouses with higher costs are generally due to how close they are to major transit systems like airports or shipping ports since these warehouses are strategically located to minimize logistical costs, lower transportation costs, and maximize output and efficiency for distribution of goods.
4. Lease Duration
The duration of warehouse rent and usage may also affect expenses in which generally long-term rentals will gradually result in lower prices over time compared to more short-term/brief rental expenses.
Besides these factors, warehouse rental expenses are also subject to 2 tax regulations which consist of PPh (Pajak Penghasilan) as according to article 4 section 2 and PPN (Pajak Pertambahan Nilai). Based on this regulation, it is required for business owners to pay an additional PPN cost of 10% x from the overall warehouse expenses.
In conclusion, there are internal and external factors that needs to be considered in order to measure the full expenses of warehouse rental costs, such as:
The downstream supply chain relies heavily on the efficient functioning of the warehouse, making it a critical component of the overall logistics process. So, it is important that you choose the right warehouse for your business. Uniair Cargo’s warehouse is strategically located in many big cities in Indonesia. We also offer flexible solutions that adapt to your business inventory needs with competitive price range. Contact Uniair Cargo to learn more.
