Chinese companies will be the driving force behind the future take-up of Grade A office space in Taipei and major Chinese cities, executives at international real-estate service provider Jones Lang LaSalle said yesterday.
“Should further relaxation be finalized to allow the entry of Chinese companies [in the local market], vacant [Grade A] office space at about 200,000m² in Taipei will be fully taken up ... as early as next year,” Tony Chao (趙正義), managing director of the company’s Taipei branch, told a media briefing.
Chao said his company was advising a Chinese bank to lease an office space of up to 1,000 ping (3,300m²) for a branch in Taipei, but it could end up renting a much smaller office if the Taiwanese government only grants approval for a representative offices.
In China, domestic businesses have, for the first time in history, also become the major source of tenants for Grade A office in first and second-tier cities such as Beijing, Shanghai, Guangzhou and Chengdu, the company’s Hong Kong-based managing director for Greater China markets, K.K. Fung (馮建強), told the media briefing.
That, along with a recovery in demand from multinationals, should give the office rental market’s recovery a boost in several Chinese cities despite the release of new supply, said Julien Zhang (張瑩), the company’s managing director in Beijing.
Zhang forecast that the average rent for Grade A offices in Shanghai and Chengdu would see the biggest growth of between 5 percent and 10 percent by the end of the year, compared with a rise of up to 5 percent for combined Grade A and Grade B offices in Beijing, as well a small 3 percent increase for Grade A offices in Taipei.
“We expect to see a strong 15 percent to 20 percent upside for [Grade A] office rent in the Pudong District of Shanghai this year,” Zhang said.
As a result of oversupply, the rent for Grade A offices in Guangzhou will continue to drop by another 10 percent to 15 percent by the end of the year, he said.
Rental fees for Grade A offices in Shanghai and Beijing averaged 277 yuan (US$40) and 261 yuan per square meter respectively at the end of last year, higher than Taipei’s 216 yuan, Guangzhou’s 155 yuan and Chengdu’s 132 yuan.
Fung also threw his support behind measures by the Chinese government to curb residential property price hikes, but disagreed with the consensus that a property bubble was emerging.
In the past three months, the average loan to value in China was only 46 percent, while as many as 76 percent of buyers purchased properties either for their own use or upgrade, which Fung said was an indication that the Chinese market remained healthy.
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