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Demand cuts vacancies in top office properties

Amid sustained strong demand, vacancy rates in Taipei's Grade A office market fell in the last quarter of last year to 7.9 percent from 8.9 percent in the third quarter, Jones Lang LaSalle said yesterday.

This is the lowest rate since the third quarter of 2001, the international real-estate agency said in a report.

Average Grade A rent in Taipei rose 2.75 percent in the fourth quarter of last year, the company said, with rent in the Xinyi District rising by 4.5 percent amid strong demand.

It is estimated that 6,120 ping of Grade A office space was absorbed in the final quarter. For the whole of last year, the market absorbed 41,250 ping of Grade A office space, doubling the volume absorbed in 2003, Jones Lang LaSalle said.

But the vacancy rate is expected to climb this year, in view of the addition of new supply from the just-completed Taipei 101 skyscraper and the Uni-President Building, the report said.

"We expect that this is the lowest point in the present vacancy cycle," the report said. "Taipei 101 will be made available for tenant occupancy in March. Vacancy will peak as the new building comes onto the market, but is expected to decline again through the year as it is taken up."

Another property agent, CB Richard Ellis Ltd, said on Monday that vacancy rates in Taipei's Grade A office market had remained at 8.5 percent in the fourth quarter.
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