The take-up rate for upscale offices declined significantly during the last quarter from three months earlier as companies turned conservative on rental decisions amid escalating downside risks, international property brokers said yesterday.
Overall take-up for Grade-A office space dropped from 16,000 ping (52,893m2) to 3,722 ping on a high base in the preceding quarter and in line with the nation’s anemic economic recovery, a report by Jones Lang LaSalle said.
Rents were nearly unchanged at NT$2,444 (US$80.93) per ping, compared with NT$2,433 per ping three months earlier, the report said.
“Office leasing activity softened during the April-to-June period with steady rents, reflecting cautious sentiment on the part of companies,” the international real-estate service provider said.
Consequently, vacancy rates edged down 0.71 percentage points to 10.29 percent at the end of the last quarter.
Take-up for the first half reached 19,044 ping, 8,000 ping higher than the same period last year and more than the total take-up of 11,775 ping last year, the report found.
Jones Lang LaSalle attributed the impressive advance to owners moving into their own buildings, notably the new Farglory Group (遠雄企業團) headquarters in Xinyi District.
“We found slow leasing activity, if owner occupancy were removed from the calculations,” Jones Lang said.
Owner occupancy accounted for almost 50 percent of overall take-up in the first six months, the report said.
DTZ, another international real-estate adviser, shared similar views and painted a lackluster outlook.
“The leasing market is likely to stay flat in the second half with more office space available for rent,” DTZ said.
About 10,350 ping of new office space located on Nanjing E Rd will be put on the market, DTZ said.
Taiwan’s recently inked trade agreement with China is the only favorable factor as it would allow Chinese firms to tap local services business, DTZ general manager Billy Yen (顏炳立) said, but the government may stiffen taxation on property transactions, while keeping a tight rein on insurance funds, driving more prospective buyers to the sidelines, Yen said.