Wed, Jul 21, 2004 - Page 11 News List

101's leasing agent weighs in on market

With the finishing touches being put on Taipei 101, the local market for office space is about to experience some major changes. Anthony Couse of Jones Lang LaSalle Ltd, Asia -- the leasing agent for Taipei 101 -- recently shared with the `Taipei Times' staff reporter Jessie Ho his views on trends in the local and Asia-Pacific property markets

 /  STAFF REPORTER

Anthony Couse of Jones Lang LaSalle Ltd, Asia makes a point during a recent interview.

PHOTO: GEORGE TSORNG, TAIPEI TIMES

Taipei Times: What is Taipei 101's pre-leased rate at this point?

Anthony Couse: We plan to open Taipei 101, the world's largest skyscraper, at the end of this year. At this point, we haven't actually pre-committed to any transactions with tenants, but we are in good negotiations with some multinational corporations. [Editor's note: Leases for office space in Taiwan are typically not signed until after buildings are completed.] The timing for releasing the office space is not ideal in terms of rental levels. But with significant take-up and a drop in vacancies in the first two quarters, we are confident that we'll secure some tenants by the end of the year.

TT: What are the advantages of Taipei 101? What strategies are you employing to attract customers?

Couse: First of all, we've got a world-class product being delivered in a market full of demand. There will be more supply becoming available, but Taipei 101 is in the spotlight in the marketplace. We are targeting multinational corporations as our tenants, which will take 60 percent to 70 percent of the space, while the rest will be filled by domestic companies that want to increase their company profiles.

The next six months is our prime leasing time. In order to secure anchor tenants, or early birds, we are going to offer very competitive packages to the right type of tenants. After we have obtained 20 percent to 25 percent pre-committed tenants, we'll aggressively raise rentals. I believe the rates will be a barometer for premium office space in Taipei, and the move will help drive the market in the city as well.

TT: What's your view on the market in not only Taipei but also Shanghai, Beijing and Hong Kong?

Couse: The fundamental thing that drives the market is demand and net absorption of office space. And what is behind demand and supply for office space is GDP. In general, in line with the positive economic outlook across the region, most key Asia-Pacific cities have seen steady demand for office space. An important source of demand for prime office space has been the reviving financial sector, including banks and securities firms, and supporting business such as accounting and legal services.

Shanghai and Beijing, for example, have had very strong demand over the last few years because they have had a strong economy.

The net absorption in Shanghai, powerhouse of the market in Asia, was 400,000m2 in 2002 and 2003. Beijing had roughly 200,000m2 in the same period.

In contrast, Hong Kong and Taipei have had tougher economies and less buoyant GDPs and therefore have had less demand. In 2001 and 2002, Hong Kong saw negative demand for the first time on record and barely managed 110,000m2 of net absorption last year. Taiwan also saw low demand in 2002, with only 15,000 ping of demand.

TT: Any sign that rentals will go up in these four markets?

Couse: Despite Hong Kong's having just emerged from recession, it led the rental recovery in the fourth quarter last year, while others saw relatively flat growth in rentals. In Hong Kong, the demand slightly has gone up slightly, but the supply is small, putting pressure on rentals. The sector in Hong Kong is driven by two single buildings called International Finance Center. Developers of the building have an aggressive strategy and have secured considerable commitments from tenants. Therefore, as rentals in the buildings have gone up, the whole market has reacted really quickly.

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