With a growing take-up and a decreasing vacancy rate, the Grade A office leasing market in Taipei is beginning to rebound in the third quarter this year, according to reports released by several local real-estate firms yesterday.
"The Taipei office market rental trends seemed to have bottomed out during the third quarter of last year, and we are looking forward to a revival in the next few quarters," CB Richard Ellis said in its quarterly report.
The vacancy rate decreased for the fourth consecutive month to the lowest level of 8.5 percent in the third quarter, while the average monthly rental remained at the same level to only slightly rebound to NT$1,971 per ping, CB Richard Ellis said.
Sharing a similar view, Jones Lang LaSalle International Property Consultants also recorded the vacancy rate in the third quarter as declining to a record low of 8.9 percent from the second quarter's 10.5 percent, while rental rose slightly from NT$2,070 to NT$2,110 during the same period.
"Taking advantage of low rentals and upgrading activities from Grade B offices to Grade A offices remain the key to drive the market's growth," Jones Lang LaSalle managing director Calvin Wang (王治平) said at a press briefing yesterday.
Wang anticipated the rental to continue to rebound in the fourth quarter, but "a less than 10 percent rise may be foreseeable" since the supply is limited.
The impact of the availability of new office space in Taipei 101 and the Uni-President Building on the Grade A office market in the following year, however, is not yet clear.
The Taipei 101 skyscraper may release up to 58,000 pings of office space, while Uni-President may have up to 12,000 pings available, depending on the amount of space both buildings' landlords would require for their own use.
Wang said that the vacancy rate may shoot up to 20 percent next year before falling to a more normal level, after the available space in both buildings are successfully absorbed by the end of next year.
If both buildings' landlords are tough on their rental prices, the market's average rental may see a further boost, Wang said.
Another real-estate advisor, DTZ Debenham Tie Leung, said in its quarterly report that potential tenants of Grade A offices have adopted a "wait-and-see" attitude to slow down the third quarter's activities.
The DTZ report also showed that the Grade A office investment market slowed down in the second half from the first half's boom, as buyers felt pricing pressures from the sellers as well as a rise in the oil price and raw-materials.
After a long-term stagnation, the investment market has begun to awake from its hibernation in the third quarter, due to stimulation from self-usage and investment demands of corporations and institutional investors, the company said.
RSS