Vacancy rates for grade-A offices in Taipei fell to 3 percent last quarter, from 4.4 percent three months earlier, as demand from Internet service providers and financial and technology firms remains strong, despite an economic slowdown, Jones Lang LaSalle Inc (JLL) said on Thursday.
“That suggests a state of almost full occupancy due to a lack of new supply on the horizon, as tenants with relocation plans have opted to stay put for the time being,” JLL senior market director Brian Liu (劉建宇) told a news briefing in Taipei.
Take-up rates translated into 14,600 ping (48,264m2), a significant increase from 7,638 ping in the first quarter, JLL data showed.
If the trend holds, companies would soon have difficulty finding upscale office space in central business districts, the US broker said.
Average monthly rent edged up 0.5 percent to NT$2,768 per ping in Taipei, a 3 percent increase from a year earlier, Liu said.
The figure rose to NT$3,343 per ping in the city’s prime Xinyi District (信義) where vacancy rates dropped to a low of 1.6 percent, Liu said, adding that landmark office buildings such as Taipei 101 and Nan Shan Plaza (南山廣場) are almost fully occupied with monthly rents approaching NT$5,000 per ping for the top floors.
JLL forecast a massive relocation to the city’s Nangang District (南港), as about 150,000 ping of new office space would become available between next year and 2024.
Demand for corporate headquarters and updated facilities have lent support to the local leasing market in the past few years, JLL Taiwan managing director Tony Chao (趙正義) said, adding that about 40 percent of office buildings in Taipei are old enough to qualify for urban renewal projects.
JLL is advising the Taipei City Government over the “Taipei Twin Towers” development project.
The Investment Commission last month rejected Hong Kong-based Nan Hai Corp’s (南海控股) bid for the project because of national security concerns.
If Nan Hai files a lawsuit and secures an injunction, JLL and the city government would have to wait for a court ruling before doing anything, Chao said.
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