The grade-A office space in Taipei is continuing to fill up in the second quarter, driving the vacancy rate to its lowest level in recent years, according to research by two international real estate agencies.
The vacancy rate fell to 10.5 percent in the second quarter from the first quarter's 14.1 percent, Jones Lang LaSalle Taiwan (仲量聯行) said in its quarterly report released on Thursday.
That is the lowest rate in over two years.
CB Richard Ellis Ltd (世邦魏 理仕), however, said the vacancy rate in the second quarter fell to 9.41 percent from 12.57 in the first -- a third consecutive quarter of decline. CB Richard Ellis's local branch is slated to release its quarterly report on Monday.
The discrepancy between the two firm's figures is due to the different targets in their property portfolios.
"Strong take-up and the absence of new supply led to the decline in office vacancy rates [in the second quarter]," said Calvin Wang (王治平), managing director of Jones Lang LaSalle Taiwan.
Some 14,500 ping of grade-A office space in Taipei was taken up in the second quarter, following on from the 14,000 ping absorbed in the first quarter, which together was 40 percent more than in the whole of last year, Jones Lang LaSalle said in its report.
Wil Asato, manager of CB Richard Ellis' global research and consulting, yesterday said that some 21,000 ping of grade-A office space has been taken up in the second quarter, up from the first quarter's 2,700 ping.
The take-up of the Fubon Nanjing Building's office space alone reached some 14,000 ping in the second quarter, lowering the building's vacancy rate from 93.47 percent in the last quarter to 9.38 percent, Asato said.
Therefore, Jones Lang LaSalle estimates that the gross achievable rents fell 0.9 percent to average at NT$2,070 per ping while CB Richard Ellis calculates that the figure fell by 0.34 percent to reach NT$1,944 per ping, the smallest decline in four consecutive quarters.
Wang and Asato did agree yesterday that the decline of rents was one factor driving the strong take-up in the second quarter, since many businesses continued to upgrade from grade-B and grade-C buildings to grade-A buildings.
The two executives also agreed that the take-up is expected to remain flat in the third quarter with rents stabilizing and the negotiation range with grade-A office landlords narrowing due to a limited supply.
Upbeat about Taipei's commercial property market, Cynthia Chu (朱幸兒), a director with DTZ Debenham Tie Leung International Property Advisers (戴德梁行), expressed concern yesterday that vacancy rates in the third quarter may shoot up after the opening of Taipei 101 in October, releasing up to 60,000 ping of new office space onto the market.
The commercial market's buying activities may also slow down in the next quarter because of concerns that the central bank may follow the US Fed's decision to raise interest rates in the near future, Chu added.
Citing CB Richard Ellis's yet-to-be released report, Asato said the vacancy rate of Taipei's prime office space also fell by 2.63 percent to reach 9.37 percent, with rents averaging NT$2,195 -- a 0.79 percent decline from the previous quarter.
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