Vacancy rates for upscale offices in Taipei dropped further last quarter, while rents climbed modestly as office demand increased and the economy improved, real-estate services provider Jones Lang LaSalle said in a quarterly report released yesterday.
The pickup came even though commercial property prices have likely peaked and are under increasing pressure for corrections caused by unfavorable policies, the international broker said.
Vacancy rates for grade-A offices fell to 8 percent during the July-to-September period, down 0.2 percent from three months earlier, as net take-up gained nearly 1,000 ping (3,305.8m2) to 3,889 ping, due mainly to demand from companies in financial, Internet and technology sectors, the report said.
Monthly rents averaged NT$2,546 per ping, rising 0.2 percent from the previous quarter and 4.1 percent if compared with the year-ago amounts, the report said.
“The uptrend is set to extend through this quarter and rent rates may rise above the levels seen before the onset of the global financial crisis in the fall of 2008,” Jones Lang LaSalle Taipei-based director Joe Lin (林大喬) told a media briefing.
Lin attributed the positive outlook to sustained economic recovery abroad and locally, with corporate tenants voicing interest in moving to better, newer and larger office spaces.
The trend is particularly evident for firms involved in the retail and technology sectors, Lin said, adding that some customers are in talks to relocate to new office buildings well before their existing leases are due to expire.
The inquiries suggest strong demand ahead and lend support to office space rental agencies, Lin said.
Monthly office rental in the city’s prime Xinyi District (信義) rose 0.6 percent for the past three months to NT$2,971 per ping, translating into a 7.1 percent increase from a year earlier, according to the report.
Extravagant grade-A office space climbed to NT$3,268 per ping per month, due to a lack of new supply in the short term, the report said.
Average rental for grade-A offices in non-core business districts picked up 2.4 percent to NT$1,983 per ping last quarter, while vacancy rates dropped to 5.7 percent, the report said.
Jones Lang LaSalle limits its survey to upscale leasing activity, as the company helps broker 59,000 ping of office space, accounting for more than 50 percent of the market share.
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