Office rents this year might grow 3 percent annually after a 2.9 percent pickup last year, as demand from the technology and financial sectors remains strong, Jones Lang LaSalle Inc (JLL) said yesterday.
Average monthly rents rose to NT$2,728 (US$88.47) per ping (3.3m2) for grade-A office space in Taipei in the fourth quarter, a 2.9 percent increase from a year earlier, while vacancy rates dropped to 5.5 percent, the international property consultancy said.
Take-up rates totaled 20,086 ping during the October-to-December quarter, with new buildings almost fully occupied shortly after entering the market, as financial, technology and professional consultancy firms and e-commerce operators looked for better working environments, and relocated to central business districts, JLL associate market director Brian Liu (劉建宇) said.
JLL expects vacancy rates to taper to 4 percent this year, while room rates are to reach NT$2,800 per ping, with little new supply, Liu said.
“Several clients have expressed interest in upscale offices in Taipei, which might only see 4,000 ping added this year,” Liu said, referring to a new mixed-use complex by Huang Hsiang Construction Co (皇翔建設) in Zhongshan District (中山).
The estimate could be overly optimistic, as the developer might turn a higher portion of the complex into more profitable residential units, JLL Taiwan managing director Tony Chao (趙正義) said.
For the whole of last year, take-up rates swelled to a record high of 61,646 ping, pushing up rents in the city’s prime Xinyi District (信義) by 4.5 percent, JLL’s report showed.
The Taipei Dome project could add 10,000 ping of office space if the city government and Farglory Group (遠雄集團) can settle safety concerns, JLL said.
The leasing market seems unaffected by an economic slowdown caused by a trade dispute between the US and China, Chao said, adding that monthly office rents would surpass NT$3,000 per ping in three years.
JLL, which last year helped organize the bidding for the Taipei Twin Towers development project near Taipei Railway Station, is this year looking for developers to renovate the century-old Chienkuo Beer Brewery (建國啤酒廠) and Taiwan Power Co’s (台電) idle plots in Nangang District (南港), Chao said.
Growth potential for the property market is strong in light of ample liquidity and low borrowing costs if buyers and sellers can settle their pricing differences, he said.
Local insurers have up to NT$5.6 trillion in funding for property investments, but have had difficulty finding ideal targets, Chao added.
WASHINGTON’S INCENTIVES: The CHIPS Act set aside US$39 billion in direct grants to persuade the world’s top semiconductor companies to make chips on US soil The US plans to award more than US$6 billion to Samsung Electronics Co, helping the chipmaker expand beyond a project in Texas it has already announced, people familiar with the matter said. The money from the 2022 CHIPS and Science Act would be one of several major awards that the US Department of Commerce is expected to announce in the coming weeks, including a grant of more than US$5 billion to Samsung’s rival, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), people familiar with the plans said. The people spoke on condition of anonymity in advance of the official announcements. The federal funding for
HIGH DEMAND: The firm has strong capabilities of providing key components including liquid cooling technology needed for AI servers, chairman Young Liu said Hon Hai Precision Industry Co (鴻海精密) yesterday revised its revenue outlook for this year to “significant” growth from a “neutral” view forecast five months ago, due to strong demand for artificial intelligence (AI) servers from cloud service providers. Hon Hai, a major assembler of iPhones that is also known as Foxconn, expects AI server revenues to soar more than 40 percent annually this year, chairman Young Liu (劉揚偉) told investors. The robust growth would uplift revenue contribution from AI servers to 40 percent of the company’s overall server revenue this year, from 30 percent last year, Liu said. In the three-year period
LONG HAUL: Largan Energy Materials’ TNO-based lithium-ion batteries are expected to charge in five minutes and last about 20 years, far surpassing conventional technology Largan Precision Co (大立光) has formed a joint venture with the Industrial Technology Research Institute (ITRI, 工研院) to produce fast-charging, long-life lithium-ion batteries for electric vehicles, mobile electronics and electric storage units, the camera lens supplier for Apple Inc’s iPhones said yesterday. Largan Energy Materials Co (萬溢能源材料), established in January, is developing high-energy, fast-charging, long-life lithium-ion batteries using titanium niobium oxide (TNO) anodes, it said. TNO-based batteries can be fully charged in five minutes and have a lifespan of 20 years, a major advantage over the two to four hours of charging time needed for conventional graphite-anode-based batteries, Largan said in a
Taiwan is one of the first countries to benefit from the artificial intelligence (AI) boom, but because that is largely down to a single company it also represents a risk, former Google Taiwan managing director Chien Lee-feng (簡立峰) said at an AI forum in Taipei yesterday. Speaking at the forum on how generative AI can generate possibilities for all walks of life, Chien said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) — currently among the world’s 10 most-valuable companies due to continued optimism about AI — ensures Taiwan is one of the economies to benefit most from AI. “This is because AI is