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Tue, Mar 12, 2002 - Page 18 News List

Taipei's real estate lagging Shanghai's

STAFF WRITER

Demand for commercial real estate in Shanghai continued to rise in the fourth quarter of last year, while other markets across Asia -- including Taipei -- remained weak, according to recent reports by international real-estate firms.

"The demand for prime offices in Shanghai was quite exceptional in 2001," said Nelson Wong, head of Jones Lang LaSalle's Greater China research department.

During the fourth quarter "there was demand from both international and local firms, which led to a net absorption of close to 80,000 square metres of space and upward pressure on rents," he added.

According to the report by Jones Lang LaSalle, vacancies for grade A commercial real estate in the Central Puxi district of Shanghai fell year-on-year by 7.3 percent and rental prices increased by 23 percent year-on-year.

The CB Richard Ellis company also recently reported rising rental prices and falling vacancies in the prime office areas of Puxi and Pudong.

"Due to the positive view that numerous financial institutions now take with respect to the future prospects of Pudong, prime office vacancy levels in this area have fallen more swiftly than in Puxi," said the report. "In addition, along with the positive stimulus of China's accession to the WTO, a number of domestic and overseas developers decided to re-commence construction on formerly stalled or delayed large-scale mixed-use development projects."

But while demand climbed during the fourth quarter last year in one of China's premier business hubs, it fell in other regional centers including Taipei.

In Taipei the completion of new office space pushed the office vacancy rate up to 9 percent in Taipei, representing a 4.1 percent rise over the previous quarter, while rental rates fell 2.4 percent, according to the report.

Despite a stall in new completions, office vacancy rates rose during the fourth quarter to 9.2 percent in the Singapore central business district, 8.7 percent in the Hong Kong central business district and 6.8 percent in the Melbourne central business district, mainly on weaker demand, according to the report.

Calvin Wang (王治平), Managing Director of Jones Lang LaSalle Taiwan (仲量聯行), said that for Taiwan's property market to feel any of the benefits of greater foreign investment in China, direct links would have to be opened up. "Will China's success help the local property market? Probably not in the short term, but if direct trade and transportation between the two open up, Taiwan could see some benefits," Wang said.

He added that in the final analysis the property market in Taiwan was dependent on a healthy economy and increased domestic demand.

On a lighter note, local real estate firm Evertrust Real Estate (永慶房屋) reported that the number of sales it had managed in the established housing market in the greater Taipei area increased by 64 percent over the previous period.

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