Vacancy rates for grade-A offices in Taipei dropped to 4.4 percent last quarter, even though take-up rates dipped, as stable leasing demand and a lack of new supply encouraged tenants to stay put, Jones Lang LaSalle Inc (JLL) said on Tuesday.
That was 1 percentage point lower compared with three months earlier, while average monthly rents rose to a 18-year high of NT$2,753 (US$89.25) per ping (3.3m2), due to resilient demand from companies in the technology, financial and Internet sectors, JLL associate market director Brian Liu (劉建宇) told a media briefing.
Take-up rates totaled 7,638 ping, a decrease of 600 ping from the previous quarter, but were still comfortably above the 10-year average of 6,000 ping, the broker’s report showed.
“Leasing demand may cool down a bit this year as companies turn cautious about expansion amid an ongoing economic slowdown at home and abroad,” Liu said.
However, landlords have on the whole managed to retain tenants by offering grace periods and other incentives, he said.
A lack of new supply in the next three years could push vacancy rates to a record low of 3 percent by the end of this year and raise rents by 3 percent, Liu said, adding that new office buildings are almost fully occupied, lending support to this.
Vacancy rates in Taipei’s Xinyi District (信義) tapered to 3.9 percent last quarter with office rents picking up 1.7 percent to NT$3,316 per ping, the report showed.
Vacancy rates averaged 10.2 percent in Dunbei (敦北) and 7.1 percent in Dunnan (敦南), it said, adding that monthly rents for offices in both commercial areas held steady at NT$2,372 and NT$2,464 per ping respectively.
Office demand fared better in non-central business districts such as Neihu (內湖) and Nangang (南港), with vacancy rates of close to zero, it said.
A growing number of companies relocated to suburban districts, attracted by new facilities and more affordable rents, it said.
Monthly rents averaged NT$1,374 per ping in Neihu and NT$1,416 per ping in Nangang.
In related news, large-scale commercial property deals driven by hotel demand in Kaohsiung amounted to NT$14.71 billion last quarter, higher than the 10-year average of NT$12.1 billion, JLL said in a separate report.
HPW Co (海霸王企業), which runs restaurants, hotels and food logistics centers in Taiwan and China, last month won a foreclosure auction, paying NT$5.44 billion for several floors in Kaohsiung’s tallest building, 85 Sky Tower. The floors currently house two lodging facilities.
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