Taipei 101 hits 30% level

"It's very challenging to be the leasing agent [for Taipei 101]... Building management and the evacuation plans are main concerns for many potential tenants rather than price."

Sherry Wu, Jones Lang LaSalle associate director

Taipei the world's tallest skyscraper, has signed up tenants for 30 percent of office space.

Leasing Jones Lang LaSalle says its hardest task is convincing clients the building can withstand earthquakes.

"We are satisfied with the market response," said Cathy Yang (楊文琪), an associate director at Taipei Financial Center Corp (台北金融大樓公司), which owns the building that's due to open as early as January. "We are aiming at a 70 percent occupancy by the end of 2005."

Average in the 508m-tall building, at NT$968 (US$28.50) a square meter, exceeds the city's average by half.

Concern earthquake risk was heightened when construction was halted in 2002 for three months after a 6.8-magnitude quake rocked Taiwan.

"It's very challenging to be the leasing agent," said Sherry Wu (吳瑤華), an associate director with US-based real estate broker Jones Lang LaSalle, the lead agent for leasing Taipei 101.

"Building management and the evacuation plans are main concerns for many potential tenants rather than price," Wu said.

Another to wooing tenants for the US$1.7 billion, 101-story building stems from the Sept. 11 attacks, as some firms have avoided skyscrapers.

Even some of Taipei 101's owners have concerns. Taiwan Stock Exchange Corp, which owns 4.4 percent of the structure, is negotiating for space on the lowest possible levels, the ninth to 12th floors, and has no plans to move its trading system and information-technology departments into the building.

Other such as China Development Financial Holding Corp (中華開發金控), China United Trust & Investment Co (中聯信託), China life Insurance Co (中國人壽), Cathay Financial Holding Co (國泰金控), Shin Kong Life Insurance Co (新光人壽) and Chinatrust Commercial Bank (中國信託), have yet to commit to moving.

Taipei Financial's Yang said a terrorist attack isn't a big concern in Taiwan. Still, potential tenants get details of emergency routes and other plans to show management is prepared, she said.

Taipei has an 800-ton damping system to help stabilize the building in case of earthquake. There are 37 passenger elevators, some of which cost more than US$2 million and have aerodynamic bodies, pressurization and emergency braking systems.

The tower is expected to obtain an occupancy permit by the end of next month after construction work is completed, Yang said.

Taipei which is offering a total of 178,470m2 of office space from the ninth to 84th floors, faces few competitors. The city from April through June had no new premium office space for a third straight quarter. The capital has total supply of 1,817,750m2 and average rent of NT$650 a square meter, according to Jones Lang LaSalle.

The vacancy rate for top grade space in Taipei fell to 10.4 percent in the second quarter from 14 percent in the previous quarter, a second straight quarterly slide. Rent in the second quarter rose 0.9 percent from the first three months, the first gain since the end of 2000, said Wendy Hsueh (薛惠珍), head of research at real estate company DTZ Debenham Tie Leung Ltd.

Cathay Hsin Yi Trading Center, completed in July last year and two blocks from Taipei 101, reached almost 100 percent occupancy rate for its 31,903m2 of office space. The rent was raised to NT$817 a square meter in the second quarter from a quoted price of NT$756, according to Jones Lang LaSalle.

Yang the company may increase the quotation price of Taipei 101 after reaching 50 percent occupancy rate. DTZ Debenham's Hsieh said the advantage remains with the renters.

"The quotation is only a reference and has a lot of room for discount," she said.