A glut of vacant office space created after next year's opening of the Taipei 101 office tower is expected to push the capital's falling office rents down even further, real-estate experts said yesterday.
"Office rents in the Taipei market overall will be pushed down when Taipei 101 opens," Derek Huang (
"Taipei 101 comprises 60,000 ping [198,000m2] of office space, and this will exert pressure on [prices in] all areas of Taipei," he said.
The 101-story tower, in Taipei's premium Hsinyi district, is slated to open in September next year.
A flurry of construction activity in that area is expected to accelerate the drop in rents across the city, another industry watcher said.
"New office buildings in the Hsinyi district will force down rents, not only Taipei 101," said Vicky Hsu (
The tower's builder refused to speculate on how the tower would affect rents.
"I cannot say how our building's rents will affect other rents in the city," Terry Shen (
"The building will open at the end of September next year, and we will not discuss the rental plan until one year before that date," Shen said.
According to Colliers, one ping of office space in a new, premium building in the city's Hsinyi district goes for NT$2,314 per month, or approximately US$21.05 per square meter. Older office space in the west of the city commands NT$1,560 per ping, or approximately US$13.58 per square meter.
Office rents in Taipei have been dropping since the second quarter of 2001, the experts said. Price is directly related to the performance of the economy.
Commercial rent peaked in 2000 when the local high-tech sector was performing well. The downturn in the global economy since late 2000 has had a direct impact on office rents, which have decreased by almost 8 percent over a two-year period.
Colliers reported a drop of more than 4 percent in rents in the Hsinyi district in the final quarter of last year compared with the third quarter.
Another key indicator of the health of the local real-estate market is the number of office vacancies. CB Richard Ellis reported last month that 9.53 percent of offices remained unoccupied in the city in the last quarter of last year. Huang called the rate "high."
In addition to economic factors, newer and cheaper complexes in Taipei County and the city's outlying Neihu district have enticed companies to relocate from older, more expensive properties downtown, Huang said.
The two real-estate firms disagree over which district is suffering most. CB Richard Ellis says Chungshan North Road has the highest vacancy rate, at 13.87 percent last quarter, whereas Colliers International says it is the Nanking-Sungchiang area with 16.89 percent.
The Hsinyi district had a vacancy rate of between 11 percent and 15 percent, the experts said.
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