Vacancy rates for Grade A offices edged down in Taipei this quarter, while rental rates inched up on growing demand, but the uptrend is likely to have peaked as the economic landscape looks increasingly hazy, Jones Lang LaSalle said yesterday.
The global financial market turmoil has prompted multinational corporations to suspend expansion or upgrade plans in Taiwan, with some likely to scale down or pull out of the country because of lackluster revenue, said Tony Chao (趙正義), managing director at the international property consultancy, which controls 60 percent of the Grade A office rental market in Taipei.
“Visibility is likely to remain poor until after the presidential election in January,” Chao said.
Jones Lang LaSalle revised down its forecast for office rental yields to 2 percent this year, from the 3 percent to 5 percent predicted earlier this year. The Neihu Science Park could see its vacancy rates climb next year after major technology firms reported weak orders, said Sherry Wu (吳瑤華), company director of investments and markets.
Wu expects economic uncertainty to give tenants an upper hand in bargaining for rental rates, which picked up a tiny 0.2 percent to NT$2,418 (US$79.28) per ping (3.3m2) per month from July to this month, rising for the sixth consecutive quarter.
The overall vacancy rate dropped to 13.7 percent this quarter from 14.81 percent in the second quarter, while office space take-up rose to 17,000 ping from 900 ping, Jones Lang LaSalle’s report showed.
The take-up figure is expected to reach between 23,000 ping and 25,000 ping toward the year-end, a record for the past five years and higher than the pre-financial crisis level, the report said.
By locations, vacancy rates in the prime Xinyi district (信義) rose to a new high of nearly 25 percent this quarter on new supply last year, while vacancy rates declined noticeably in Dunhua S Road to 6.5 percent, attributable to long-term leasing by large tenants and demand from small businesses, the report said.
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