Office vacancies in Taipei climbed to 7.8 percent in the second quarter even as rents fell on the general downturn in the economy and an oversupply of office space, according to market analysis recently made public in a report by Colliers Jardine Ltd.
The situation was quite different across the strait in Shanghai however, where rental prices and demand posted significant growth -- among the highest in Asia for the quarter, according to the real estate analyst.
The completion of two new major buildings in Taipei during Q2 was one of the major culprits in the rise in office vacancies in Taipei where gross rental prices fell 1.62 percent and vacancies rose 1.76 over the previous quarter.
"With a bleak economic outlook prevailing, Taiwan's manufacturing sector has slowed considerably, with negative growth recorded in domestic investments ? as a result, demand for office space has fallen, with a continual rise in the vacancy rate anticipated," said the report.
In Shanghai, the city that continues to bleed Taiwan investment away from home, things look much more rosy.
"Fueled by a vibrant market, escalating rents and limited future supply in the primary districts?" demand in the Shanghai market is expected to remain strong with rental rates climbing by 30 to 35 percent this year.
In Taipei, asked rates were on average NT$2,362 per gross ping, while actual rental rates stood at NT$2,221 per gross ping per month, said the report.
Capping off its bleak Taipei forecast, Colliers Jardine voiced its doubts on the possibility that new government policies will stimulate the market.
"Though the government has recently announced plans to invigorate the property market, including the liberalization of investment regulations for foreigners and life insurance firms, the real impact of these measures -- and how effectively they will be implemented -- remains to be seen," said the report.
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