Tue, Oct 23, 2007 - Page 12 News List

Taipei office market improves performance in 3Q

By Jessie Ho  /  STAFF REPORTER

Amid keen demand for quality office space, the Taipei office market improved its performance in the last quarter, with both take-up rates and rents rising from the second quarter, a report released by CB Richard Ellis Ltd (CBRE) said yesterday.

The average vacancy rate fell to 8.13 percent in the third quarter from 9 percent in the previous quarter and prime rents slightly increased to NT$2,345 (US$72) per ping (3.3m2) from NT$2,341 per ping, the commercial property agent said in the report.

The vacancy rate for Grade A office in Taipei declined to 9.97 percent from 11.13 percent, higher that that in other Asian cities, CBRE said. But the figure could be lower, as many companies had difficulties finding larger spaces of 600 ping and above for relocation or expansion, the report said.

Excluding Taipei 101, the vacancy rate for Taipei Grade A offices was 4.91 percent, which could decrease to 4 percent in the medium-to long-term, the report said, adding that the overall vacancy rate could be below 8 percent for the foreseeable future.

Taipei's property investment market in the third quarter was also active, mostly in the Neihu Technology Park, where investment sales amounted to about NT$8 billion, CBRE said.

Major deals included Shin Kong Life Insurance Co's (新光人壽) purchase in July of two buildings formerly owned by BenQ Corp (明基) and one building under construction from Huaku Construction Co (華固建設), for a total NT$6.54 billion.

The robust demand for property within the park has shown investor's buoyant confidence in the prospects for the area,” CBRE said.

Neihu District is likely to become a significant office submarket in Taipei as the Taipei City Government has been formulating a plan for a Grater Neihu, which would add another 175 hectares of land to the existing Neihu

Technology Park, the agent said.

Another major transaction was the purchase by CITADALE, a private fund from Singapore, of a building from Mei Fu Construction Co (美孚建設) for NT$5.2 billion, it said. Construction of the building is to be completed next year.

With the Taipei office market keeping an upward trend, institutional investors will keep a close eye on quality space in good locations, CBRE said, adding that foreign and local insurance and investment companies would continue to dominate the property market.

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