Idle office space in Taipei hit a four-year low in the current quarter as demand spiked on Taiwan's exuberant economy, the nation's largest housing agent said yesterday.
In the current quarter, 9.81 percent of Taipei City's office space was empty, down from 11.14 percent at the beginning of the year as demand bounced back to almost meet supply in an improved macro-environment, according to the latest report released by Sinyi Real Estate Inc (
"Corporate demand shot up owing to improved profitability on the nation's robust economic growth," said Jacky Hsin (
Taiwan's economic growth is expected to expand by 5.93 percent this year from last year, according to the government's forecast.
Rising demand also pushed up the average rent level to NT$1,636 per ping in the fourth quarter, from NT$1,627 in the three-month period to September, according to Sinyi Real Estate.
"That is a reverse of a three-year-long oversupply," Hsin said.
Benefiting from the robust property market, Hsinyi Real Estate's sales climbed almost 45 percent to NT$3.67 billion (US$114 million) in the first 11 months of this year from NT$2.53 billion a year ago, the company said.
The growth momentum is expected to carry into next year, bucking the trend of a weakening economic growth of 4.56 percent for Taiwan resulting from limited new supplies, Hsin said.
Local construction companies focused on building new luxury apartments and residential complexes, while ignoring the commercial market, he said.
As a result, idle office space, excluding premier offices, will further contract to below 6 percent next year, Hsin said.
Turnover in Taipei will jump from 10 percent this year to 15 percent next year, while rent is expected to rise by between 5 percent and 10 percent annually, he predicted.
CB Richard Ellis Ltd, another property agent, is more cautious about next year's outlook after a booming 2004.
"The growth strength could weaken on a huge increase in new supplies, mostly in the emerging Xingi district," said a CB Richard Ellis official who requested to remain anonymous.
Roughly 80,000 ping of new premium office space will be ready next year, the official predicts. This figure excludes just-finished office buildings, such as the Taipei 101 building and an office complex owned by Uni-President Group (統一集團).
The new premium space that will be available next year will be more than double the overall estimate of 30,000 ping that was used by corporations located in Taipei this year, according to the agent.
Last year, only 7,700 ping of high-scale office space in the capital was leased or sold, according to CB Richard Ellis.