Grade-A offices in Taipei outperformed their Asian counterparts to average the smallest year-on-year decline in rental rates — 7.9 percent, in the fourth quarter last year — a survey by Jones Lang LaSalle (仲量聯行) said yesterday.
“That was better than our expected decline of 10 percent annually,” Sherry Wu (吳瑤華), director of the realtor’s commercial property market, told a media briefing yesterday.
By contrast, rentals in Singapore plummeted 70 percent — the worst in Asia — in the past year as a result of new supply, the realtor’s managing director, Tony Chao (趙正義), said. Wu attributed pressure that prevented rental prices from falling in Taipei to wealthy landlords of top-tier offices who refused to lower prices in anticipation of price increases to be triggered by investment by Chinese companies in the near future.
“Some landlords even called us up and requested we rent their properties to no one but Chinese companies,” she said.
Wu, however, said landlords may have inflated expectations about the take-up of Chinese firms because only a small number will be allowed to enter the local real-estate market and there would be a smaller-than-expected demand for office space in the near future.
Average rentals declined to NT$2,371 per ping (3.3m²) last quarter, a 2 percent drop from the previous quarter, she said.
Rentals for grade-A offices in Taipei’s Xinyi District (信義) were the most expensive, at an average of NT$2,666 per ping, 4 percent down quarter-on-quarter, followed by NT$2,322 in Dunhua South district and NT$2,275 in Dunhua North district, an 11 percent drop from the third quarter last year, the survey showed.
Wu said rental in Taipei would gain momentum this year, with a downward trend in the second half, for 3 percent to 5 percent growth annually. The vacancy rate, however, remained at a record-high of 16.1 percent last quarter, 0.8 percentage points down from the previous quarter, but could grow to 20 percent in the first half of this year as two high-rise buildings increase office space by 21,000 pings, Wu said.
Hong Kong and Singapore vacancy rates shot up to 30 percent and 50 percent respectively for the same period.
Wu said demand should pick up this quarter after domestic companies begin hiring and several foreign companies and banks move or expand from the city’s non-core business districts — where average rental is below NT$2,000 — to upscale offices such as those in Xinyi District.
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