Indonesia’s logistics landscape is rapidly evolving, and nowhere is this more evident than in Surabaya. As the nation’s second-largest city and a key logistics hub, Surabaya is not just capturing investors’ attention but also witnessing a rapid growth in the warehouse market, making it an attractive investment opportunity.
Curious why Surabaya stands out as a prime destination? Explore the key market insights and tips to maximize investment in this dynamic region here.
Indonesia’s warehouse market outlook
The Indonesia warehousing market was valued at USD 2.85 billion in 2023, and it is poised to grow further, approximately reaching USD 4.25 billion by 2028. Continued e-commerce expansion, foreign direct investments, and technology advancement drive the notable growth. Key sectors fostering this surge include food and beverage, automotive, pharmaceuticals, and electronics.
East Java’s strategic role: Surabaya at the forefront
East Java’s economy grew by 5.00% year-on-year in Q1 2025, highlighting its essential role in Indonesia’s industrial growth. Surabaya, the capital of East Java, is not just a key logistics hub but also a vital gateway to Eastern Indonesia, providing access to both domestic and international shipping routes.
The warehouse market in Surabaya is quickly evolving, with a strong push toward eco-friendly facilities, advanced automation, and intelligent logistics systems. For investors, this market offers exciting and promising opportunities for the future.
What factors drive warehouse market growth
Indonesia’s warehouse market is growing fast, and several factors are driving this rapid expansion. Let’s break down what makes the warehouse business in Surabaya such a wise investment.
1. E-Commerce Boom
Online shopping is growing every year. In 2024, Indonesia’s e-commerce sales hit USD 62 billion, which continues to rise. This means businesses need more warehouses to store and deliver goods quickly, especially in big cities like Surabaya.
2. Support from SMEs and Manufacturers
Small and Medium Enterprises (SMEs) contribute the most to Indonesia’s economy. These businesses and manufacturers need warehouse spaces to store products and raw materials. Surabaya’s central location and strong industrial base make it an excellent spot for warehouse renting.
3. Growing Multi-Storey Warehouses
Busy cities have limited land, so more warehouses are being built upwards. These tall warehouses help store more goods without taking up extra land.
4. Tech and Innovation for Smart Warehouses
Technology advancements have made warehouses not only storage spaces but also smart hubs. AI-powered inventory and automation systems offer an effective solution for businesses.
Read more: Smart Warehouse: The Future of Logistics Industry in Indonesia
5. Easier Investment Policies by the Government
The Indonesian government is actively supporting the growth of the logistics sector through several policies, including tax incentives, simple licensing, and Special Economic Zones (SEZs).
Why East Java is a potential for warehouse investment
East Java is one of the best places in Indonesia to invest in warehouses. Here’s why this region, especially Surabaya, is full of opportunities.
A Strong and Growing Economy
East Java’s economy continues to grow every year. With its 5% growth by the beginning of 2025, it already contributes 25.11% of Java Island’s overall economic performance, just under DKI Jakarta.
Strategic Location
With Surabaya as its capital city, East Java is strategically located as the central hub for logistics in Java Island. Its location connects western and eastern Indonesia, making it an ideal spot for warehousing. Surabaya’s Tanjung Perak Port and major toll roads ensure goods move easily and quickly, enhancing the efficiency and reducing delivery times and costs for your investment.
Industrial Estates Are Ready for Business
East Java has many industrial zones, like Surabaya, Gresik, Sidoarjo, and Pasuruan. These places are built for businesses and have reliable infrastructure, good access, and support from local authorities
Large Labor Force
One of East Java’s significant advantages is its large and skilled workforce. With many vocational schools and training centers, the region produces workers ready for logistics and warehousing jobs.
Diverse Industries Base
East Java boasts diverse industries, including manufacturing, food processing, textiles, and more. This diversity ensures a stable and consistent demand for warehouse rentals, making your investment in East Java a promising and secure venture.
Top Location for Warehouse Investment in East Java
Some locations in East Java stand out for warehouse investment, thanks to their infrastructure, connectivity, and industrial support. Below are the top 5 cities worth considering.
1. Surabaya
Surabaya is the top choice for warehouse investment. The city’s booming e-commerce and retail sectors keep warehouse demand high, making it ideal for international shipping.
As the most developed city in East Java, Surabaya has Tanjung Perak Port, airports, and toll roads to improve business accessibility.
2. Gresik
Located just outside Surabaya, Gresik is known for its large industrial estates like Java Integrated Industrial and Ports Estate (JIIPE). It offers direct sea access and a high power and water supply capacity, which are essential for business operations.
3. Sidoarjo
Sidoarjo is popular for its affordable land and quick access to Surabaya through toll roads. Its solid food, textiles, and manufacturing foundation make it an ideal location for small to mid-sized warehouses.
4. Pasuruan
Pasuruan is known for its spacious industrial parks and lower land costs. It’s connected by the Surabaya–Probolinggo Toll Road, making it easy to transport goods.
5. Mojokerto
Mojokerto is rising fast due to its growing number of industries and infrastructure improvements. It offers easy access to central and eastern Java, offering a smart option for businesses looking to expand logistics operations affordably.
Read more: 10 biggest industrial estates you need to know in East Java
Secure your warehouse investment in East Java with InCorp
Surabaya and East Java are top spots for warehouse investment in Indonesia. But starting your investment here can be tricky and requires a good understanding of local rules and regulations.
That’s why expert help can make the investment journey smoother. InCorp Indonesia (an Ascentium Company) is your reliable partner for navigating the complex process of warehouse investment in East Java.
We provide comprehensive services, from securing property ownership to ensuring compliance with local regulations, to make your investment journey stress-free and successful.
- Land and Property Ownership Services: Secure your warehouse property easily with expert legal advice, ensuring everything is fully legal and stress-free.
- Company Registration Service: Quickly set up your warehouse business with full support for permits, licenses, and company setup.
Ready to invest in this growing market? Please fill out the form below and let us help you unlock the full potential of your warehouse investment.
Get in touch with us.
What you'll get
A prompt response to your inquiry
Knowledge for doing business from local experts
Ongoing support for your business
Disclaimer
The information is provided by PT. Cekindo Business International (“InCorp Indonesia/ we”) for general purpose only and we make no representations or warranties of any kind.
We do not act as an authorized government or non-government provider for official documents and services, which is issued by the Government of the Republic of Indonesia or its appointed officials. We do not promote any official government document or services of the Government of the Republic of Indonesia, including but not limited to, business identifiers, health and welfare assistance programs and benefits, unclaimed tax rebate, electronic travel visa and authorization, passports in this website.
Daris Salam
COO Indonesia at InCorp Indonesia
With more than 10 years of expertise in accounting and finance, Daris Salam dedicates his knowledge to consistently improving the performance of InCorp Indonesia and maintaining clients and partnerships.
Frequently Asked Questions
- Import facilities
Investors in Indonesia, particularly in manufacturing, may benefit from import tax exemptions for capital goods and raw materials through the Master List Facility. The imported goods must meet specific criteria, such as not being produced locally or not meeting industry demand despite local production. - Tax holiday
The government offers CIT reductions of 50% or 100% for 5–20 years for listed pioneer industries, based on investment value. After this period, a CIT reduction of 25% or 50% applies for two fiscal years. Non-listed sectors can also apply by meeting criteria demonstrating pioneer industry status. - Tax allowance
For companies in certain designated areas or regions, the government may provide the following tax concessions:
Net income reduction up to 30% of the amount invested, prorated at 5% annually for six years, on condition that the assets invested are retained for the same duration.
Accelerated depreciation and/or amortisation deductions
An extension of tax losses carried forward for a maximum of ten years
A 10% (or lower if treaty relief is available) withholding tax rate on dividends paid to non-residents
The applicant eligible has to meet high-level-criteria for the above tax facilities:
High investment value or for export purposes
High manpower absorption
High level of local content - Investment allowance
The government offers a reduction in net income of up to 60% of the investment, distributed at 5% annually over six years of commercial production, contingent upon the retention of invested assets for the same duration. To qualify, applicants must meet business line eligibility criteria and employ a minimum of 300 Indonesian workers in the project. - Super deduction
This facility could be granted to certain businesses, such as:
60% reduction in net income of the amount of tangible fixed assets invested for labor-intensive industries, distributed throughout a certain time frame.
Up to 200% reduction in the gross income of the amount spent for human resources development in certain competency activities.
Up to 300% reduction in gross income of the amount spent for certain R&D activities in Indonesia.
A newly established PMA company in Indonesia is typically provided with import facilities, tax holidays, tax allowances, or investment allowances.
Pioneer industries are industries that have a wide range of connections, provide additional value and high externalities, introduce new technologies, and have strategic value for the national economy.
The deadline for an individual tax return is 31 March. A corporate tax return must be lodged within four months after the end of the calendar year or taxable year. More information can be found here: 21 Must-Know Facts about Annual Tax Return in Indonesia.
Establishing a PMA Company in Indonesia typically takes around two weeks after completing document requirements. Following establishment, additional steps such as obtaining licenses and registering for Tax ID vary based on business type. Last, some licensing processes may take time, necessitating thorough planning and preliminary assessments of the business plan for a smoother process.
You can transfer the license if your local distributor agrees to change the product license holder.
