With liquidity still abundant, commercial real estate properities in Taipei may see selling prices peak (or climb higher) next year while the global ecocnomic slowdown constrains the leasing market, a Jones Lang LaSalle's director said yesterday.
The remark came after Jones Lang LaSalle — a financial and professional services firm specializing in real estate — released its latest survey for the Taipei Grade A office market.
The vacancy rates and rents for Grade A offices in Taipei generally remained flat in the third quarter from the second quarter, the report said.
The average vacancy for Grade A offices in Taipei dropped to 10.07 percent during the July-to-September period, a slight decrease of 0.1 percentage points from the April-to-June period, while rents remained at NT$2,387 (US$81.50) per ping (3.3m2) per month in the third quarter, similar to that of the previous quarter, the report’s data showed.
However, total take-up fell considerably, from the 12,445 ping recorded in the second quarter to 782 ping in the third quarter, as the depressed global economy pushed corporate tenants to adopt a wait-and-see stance.
On the investment front, the total transaction volume of commercial real estate in the third quarter amounted to NT$54.7 billion, up 82.5 percent and 7.16 percent from a quarter and a year earlier, according to the report.
“The slowing leasing sentiment in the Taipei Grade A office market showed the current trading momentum and prices for office buildings were mainly supported by abundant capital, instead of economic fundamentals,” Jones Lang LaSalle managing director Tony Chao (趙正義) told a media briefing.
The situation may cause momentum in trading prices for commercial properties to peak in the near future, Chao added.
Chao said momentum of trading volume may continue to support the commercial market steadily, with Taiwan’s financial and insurance institutions remaining the most active investors.
For the third quarter, financial and insurance institutions that have been investigating suitable assets accounted for around 55 percent of total transactions, followed by property developers that contributed another 31 percent, the report’s statistics showed.
In related news, data released by real estate service provider DTZ (戴德梁行) on Monday said the transaction volume for commercial property throughout Taiwan topped NT$46.5 billion in the third quarter of the year, up 72.5 percent from the second quarter, while real estate transactions volume also surged to NT$57.2 billion in the third quarter, the highest quarterly level in nearly two years, the Chinese-language Economic Daily News reported.