SINGAPORE (Oct 19): Keppel Land will spend about $266.4 million to redevelop an 18-storey office building in Jakarta's financial district to take advantage of rising demand for premium office space in the capital city of Southeast Asia's biggest economy.

The property arm of conglomerate Keppel Corp said in a statement today that it will redevelop the International Financial Centre (IFC) Jakarta Tower 1 into a 49-storey office tower that will more than double its net leasable area to about 69,800 sq m of premium-grade office space.

Completed in 1985 and wholly owned by Keppel Land, IFC Jakarta Tower 1 is located in Jalan Sudirman and within the so-called golden triangle zone.

Anchor tenants in the fully occupied building include Bank Mutiara, Tower Bersama, Ithaca Resources and Rintis Sejahtera.

Demolition work is expected to begin in 1Q2016 and construction of the new office tower is scheduled to be completed in 4Q2019.

Keppel Land is currently building IFC Jakarta Tower 2, which will have a net leasable area of 50,200 sq m when completed in 4Q2015.

Net demand for office space in Jakarta's central business district has consistently exceeded 300,000 sq m annually since 2011, with the occupancy rate for grade A office space in the CBD rising from 80% in 2010 to 94% in 2Q2014, according to Jones Lang LaSalle.

The redevelopment of IFC Jakarta Tower 1 is the third Southeast Asian project Keppel Land has announced this month.

The company said on Oct 13 it would add a 42-storey office building to an existing mixed-use development in Manila jointly built by its Philippine subsidiary and Banco de Oro, the banking arm of the SM Group.

On Oct 2, it said it would proceed with the second phase of a mixed-use development in Ho Chi Minh City by developing a 37-storey office tower.