KPMG signs up for Taipei 101, boosts occupancy to 60%

Taipei 101 yesterday welcomed new tenant KPMG Certified Public Accountants at a public signing ceremony, as the local arm of KPMG International took up five floors of the building, greatly boosting the occupancy rate of the world's tallest skyscraper.

Signing a five-year lease to rent the 63rd to 68th floors, a total of 4,200 ping (13,860m2), KPMG Certified Public Accountants became the building's second largest tenant; after the Taiwan Stock Exchange Corp.

Harace Lin (林鴻明), president of Taipei Financial Center Corp (TFCC, 台北金融大樓公司), owner of the skyscraper, refused to reveal any figures, citing a confidentiality agreement.

But he noted that the average monthly rental cost of Grade A office space in Taipei is between NT$2,800 (US$87.36) and NT$3,200 per ping (3.3m2).

A Chinese-language newspaper reported earlier that in a bid to secure KPMG as one of its tenants, TFCC added a clause in the contract that excludes any of KPMG's major competitors from moving into the building.

Lin yesterday confirmed that report but refused to elaborate on the issue, saying that by the time the leases of any major accounting firms with their current landlords were up, there may be insufficient office space in Taipei 101 available anyway.

After KPMG officially moves in by the end of the year, the occupancy rate in Taipei 101 is expected to reach 60 percent, TFCC assistant vice president Cathy Yang (楊文琪) said.

The progress, however, is slower than expected because of "lackluster economic performance" over the past two years, Yang said.

With the economy showing signs of acceleration this year, Taipei 101 may be able to rent out all its office space by sometime next year, and the company, which invested NT$60 billion in Taipei 101, would break even within the next two years, she said.

Jones Lang LaSalle International Property Consultants, a leasing agent for Taipei 101, said the company was in talks with several big-name international companies, and may finalize deals during the second quarter.

These prospective tenants included one in the consumer product business and others in the financial sector, which plan to rent considerable amounts of office space in the building, said Calvin Wang (王治平), managing director of Jones Lang LaSalle.

But overall, the momentum in the office-leasing market in Taipei was weak this year, he said.

"There is no new demand ? companies are merely moving from one site to another within the city," Wang said.

The market was also being influenced by the spiraling consumer debt problem, as financial institutions and consumer products companies have little budget to expand, and were therefore inclined to stay in their current locations, Wang said.

The low demand also restrained rents. In the first quarter of the year, the average rent of Grade A office space in Taipei only rose by 2 percent to 3 percent, he said.