With demand outstripping supply, the vacancy rate for Taipei's premium office space is set to fall and rental costs climb over the next two years, according to real estate services provider Jones Lang LaSalle Taiwan yesterday.
The vacancy rate for the capital's Grade A office space is expected to drop by 2 percentage points from last quarter to 13 percent during the October-to-December period as most firms have set relocation plans for the fourth quarter, said Sherry Wu (吳瑤華), the agent's director of commercial property, during a press briefing.
Office space take-up for the third quarter was modest at 2,200 pings (around 7,260m2), but the volume is expected to reach a 10,000 pings, making it the second highest quarterly absorption over the past 10 quarters.
The peak was recorded in the fourth quarter last year, when over 20,000 pings were occupied as the Taiwan Stock Exchange Corp, ABN AMRO Bank and others moved into the Taipei 101 skyscraper.
Net effective rental for Grade A office space rose last quarter by 3.5 percent from a year ago on the back of strong rental growth in the city's Xinyi District.
Because of a the lack of new supply, Wu expects that average rental costs will surge to NT$2,800 (US$84.3) per ping within two years from the current level of NT$2,270.
The next Grade A office space will come on to the market during the second half of 2008, with several other projects aiming for completion dates in 2009.
Two notable projects recently announced include a property planned at the intersection of Dunhua N Road and Nanjing E Road, as well as the Far Glory Dome project on the northern fringe of the Xinyi District.
The two are expected to add an additional 20,000 ping to the premium office space market by 2009, Wu said.
For last quarter, the Xinyi district still reported the highest monthly rental at NT$2,420, compared with Dunhua N Road at NT$2,250 and Dunhua S Road at NT$2,230, the tallies showed.
Rental growth will continue to gather speed as a consequence of limited new supply. Institutional landlords have also stated they will introduce rental hikes on lease renewals.
This trend will be underpinned by the fact that quality buildings in the Xinyi district attract tenants at the expense of older properties in less desirable areas of the city.
This will be reinforced by a number of retail, hotel and office projects as well as an MRT line currently in the pipeline in this bustling downtown area, the firm said.
Meanwhile, Jones Lang LaSalle's managing director Tony Chao (趙正義) yesterday said Stuart Robert, the firm's Asia-Pacific chief operating officer based in Singapore, will double as chairman of the Taiwan branch to fill the vacancy left by Calvin Wang (王治平), who died of liver cancer last month.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure