The average rent in the Taipei premium office market is expected to increase over the next three years, and tenants are suggested to lock in their rents as soon as possible, according to a report released by Jones Lang LaSalle Taiwan yesterday.
Tenants who plan relocating, upgrading or expanding their office space are advised to "grasp the window of opportunity that has presented itself and start planning for a move within the next six to nine months," Sherry Wu (吳瑤華), the real-estate agency's associate director of commercial property, said in the report.
For those faced with a lease renewal within the next two years, she said they should negotiate with their landlords now to renew contracts at today's prices; this way, they would be allowed time to find alternative accommodations if necessary.
"Simply waiting till the renewal day is a poor strategy," Wu said.
Steven Craig, head of the agency's research section, said that as Taipei's commercial property market has lagged compared with its regional neighbors, tenants should take the opportunity to plan their move and thereby save considerable rent over the next three-year cycle.
Over the past three years, when the market was in a downcycle, rents decreased, vacancy was up and tenants had a wide variety of choices, which also gave them the power to negotiate prices.
"In the past year, supported by solid upgrading demand and expansions from existing tenants, the market started to turn. Rents started rising and vacancy came right down to 6.8 percent," said Craig, adding that the market for leased premium offices became more balanced, and tenants and landlords had equal rights when negotiating prices.
Now a window of opportunity has opened for tenants, the report said. New supplies of office space, such as that in the Taipei 101 skyscraper and the President International Building -- located next to the Taipei City Hall MRT station -- just came onto the market, pushing the citywide vacancy rate up to 18.9 percent, according to Jones Lang LaSalle.
The research team's analysis shows the next large volume of office space will come out in 2008.
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