Thu, Jul 26, 2007 - Page 12 News List

Taipei office leasing market registers slight upturn

By Jessie Ho  /  STAFF REPORTER

Taipei's prime office-leasing market improved slightly in the second quarter as both take-ups and rents increased from last quarter, a market report released by Jones Lang LaSalle Taiwan yesterday showed.

The vacancy rate for Grade A office space in Taipei was 12 percent during the second quarter, down 0.8 percent from the previous quarter, the report showed. The average monthly rent was NT$2,350 (US$72) per ping (3.3m2), up 3.7 percent from the same period last year, it said.

But the market could start sliding in the second half on absence of new demand, the real estate service provider said.

"In the past, many multinational companies took 200 ping to 500 ping of office space when they entered the market," Jones Lang LaSalle Taiwan vice president Sherry Wu (吳瑤華) said yesterday.

"But now many of them only take 100 pings ... many of them are waiting for the result of the presidential election next year to make their next move," Wu said.

Grade A office space in the Xinyi District registered the highest monthly rent, at NT$2,560 per ping, and the highest vacancy rate, at 17.8 percent, the report said. The rate will rise during the second half through next year, as landlords in the district have been increasing rent, Wu said.

Landlords in the Xinyi District offered comparatively low rents in 2004 to increase take-ups and many of the leasing contracts will be due by the end of this year, she said.

As many of the landlords have said they would increase rent 30 percent to 40 percent upon lease renewal, some tenants have begun looking for new offices, Wu said.

After proper renovations have been made, Grade A offices on Dunhua N and Dunhua S Road are expected to benefit from the migration, she said.

Another competitive area is Nangang, as phase III of the Nangang Software Park (南港軟體園區) will be completed, offering 34,000 ping of office space in the first quarter next year, Wu said.

With better infrastructure such as higher ceilings and backup power systems, 60 percent of the first building -- at 15,000 ping of floor space -- have already been taken, Wu said.

Investment in commercial properties was brisk, with focus on the Neihu

Technology Park (內湖科學園區) as excess liquidity continued to drive up

property prices, Jones Lang LaSalle said.

The market was expected to further rise after the government said yesterday

that it would liberalize land along railroads owned by the Taiwan Railway

Administration (台鐵). Taiwan Railway is allowed to develop the lan on its

own or with private developers. The development is expected to generate

NT$150 billion in income, the rail operator said.

The construction sub-index rose 6.91 percent yesterday, beating benchmark

TAIEX's 0.04 percent loss.

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