Tue, Apr 10, 2018 - Page 12 News List

Improved sentiment last quarter boosts office rents

By Crystal Hsu  /  Staff reporter

Office rents increased mildly last quarter while the completion of an upscale office building pushed up the vacancy rate, international property agency Jones Lang LaSalle Inc said yesterday.

Grade A office rents averaged NT$2,678 a month, a 1 percent increase from three months earlier, while vacancies rose 3 percent to 10.1 percent, according to the quarterly survey.

“The pickup in vacancy is no cause for concern because it had to do with the entry of an upscale office building in Taipei’s prime Xinyi District (信義) and will prove a short-lived phenomenon,” Jones Lang LaSalle associate market director Brian Liu (劉建宇) told a media briefing.

At issue is Nan Shen Plaza, which has 48 stories above ground and five below that offer 60,340 ping (199,471m2) of office space.

The new office complex is more than 80 percent leased without stealing a single tenant from the adjacent Taipei 101, the nation’s tallest building, Liu said.

Taipei is almost fully let with monthly rents climbing to NT$4,300 per ping on some floors, thanks to booming demand from firms involved in cryptocurrency mining, artificial intelligence and financial technologies, he said.

Take-up totaled 13,692 ping in the district last quarter, but lackluster showings elsewhere caused by relocations weighed on the overall performance, Jones Lang LaSalle Taiwan managing director Tony Chao (趙正義) said.

A major accounting firm moved to Nan Shen Plaza and pushed up vacancies at its former building, he said.

Average vacancy rates are soon to subside due to a lack of new supply in the next two years, while a stable global economy would continue to shore up leasing interest, Chao said.

The trend has led some firms to adjust their development plans from hotels to office space, he said, refusing to elaborate.

The improved sentiment would extend to commercial property auctions later this year following a soft first quarter, Chao said, referring to the bidding for the “Taipei Twin Towers” development project near Taipei Railway Station.

The convenient location would lend support to the project that has received close attention from potential participants in Taiwan and overseas, Chao said.

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