Grade-A office and commercial property markets in Taipei City are expected to outperform their peers in Asia to experience the smallest decline in both rentals and capital values during the downturn in the property market, Jones Lang LaSalle executives said yesterday.
The international real estate services provider yesterday forecast the office and commercial markets in Mumbai and Hong Kong would hit their trough later this year, earlier than counterparts in Taipei, Beijing, Shanghai and Tokyo, whose markets will only bottom out next year, Alastair Hughes, Jones Lang LaSalle’s chief executive officer in the Asia-Pacific region, told a media briefing.
When the Asian market reverses it downward course next year, the market in Taipei will likely see a meager decline of between 5 percent and 15 percent in rents and another decline of between zero and 10 percent in capital gains — “the least worst in Asia,” Tony Chao (趙正義), managing director of Jones Lang LaSalle Taiwan, added at the briefing.
The capital markets of commercial properties in Beijing and Shanghai are relatively less affected since the realtor forecast their markets would bottom out later this year and would respectively total the second-smallest decline of between 5 percent to 15 percent and the third-smallest decline of between 35 percent to 45 percent, Hughes said.
As a result of over-supply, the market in Singapore, however, will be the worst hit with rebound likely to be delayed until 2011 and will likely see the biggest decline in rents — between 70 percent to 80 percent — and another decline of between 50 percent and 60 percent in the capital value of commercial properties, the realtor said.
A survey by Jones Lang LaSalle earlier last month showed that monthly rentals of four major grade-A office districts in Taipei averaged NT$2,425 per ping (3.3m2) in the third quarter of this year, down 6.4 percent year-on-year, with a vacancy rate of 16.5 percent.
Sherry Wu (吳瑤華), director of the realtor’s commercial property market, forecast rentals of the city’s grade-A offices would drop between 10 percent and 15 percent year-on-year in the first quarter of next year before reversing course to average 3 percent growth. The vacancy rate would climb to 18 percent by the year’s end and continue to rise until 2011, she said.
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