Office rentals in Taipei gained 9.5 percent last year, rising by the second-fastest pace in the Asia-Pacific region, reflecting strong demand for office space in the city’s central districts, international property consulting firm Jones Lang LaSalle said in a report.
The uptick came even though housing transactions slumped to a 13-year low last year amid political uncertainty and unfavorable policy plans, which also hurt commercial property and land deals.
“Bucking lethargic home transactions, leasing activity continued to show stable growth last quarter,” Jones Lang LaSalle Taiwan general manager Tony Chao (趙正義) said.
Average rentals for Grade-A office space in Taipei rose above N$3,000 (U$94.60) per ping (3.3m2) for the first time last year, while vacancy rates dropped below 10 percent, Chao said.
Taipei 101, the nation’s landmark building and the world’s second-highest skyscraper, was almost fully occupied last year as foreign firms used it as a launch pad to the local market, Chao said.
As a result, rents in Taipei’s Xinyi District (信義) alone gained 9.5 percent, helping the capital city to rank second in terms of rent growth among 27 Asian cities, better than Tokyo, London and several first-tier US cities, the report said.
For the past 12 months, overall rents grew 2.8 percent, with Singapore the strongest performer, followed by Taipei, the report said.
Singapore and Hong Kong saw small requirements from the financial sector, business center operators and non-traditional occupiers, the report said.
Though net effective rents picked up in most Asian markets, average quarterly growth slowed to 0.2 percent quarter-on-quarter in the final quarter of last year.
The international consultancy expects rent increases to slow this year as new office space — measuring between 80,000 ping and 100,000 ping — is due to enter the leasing market, Chao said.
As the global economy is forecast to fare better this year compared with last year, financial and technology-related firms may demand more office space, raising average rents by between 2 percent and 3 percent this year, he said.
Capital value rose in most Asian property markets, but with slower growth at 1.5 percent in the final quarter last year, compared with 2.1 percent three months earlier, the report found.
The biggest increases in Asia were seen in Seoul and Melbourne, followed by Bangkok, Manila, Tokyo, Sydney and Osaka on sustained investor interest, the report said.
Capital values gained an average of 7.3 percent last year, the strongest growth since 2011, the report said.
Tokyo staged the fastest quarterly value increase on strong investor interest, while Taipei, Manila, Melbourne and Sydney also put in double-digit percentage gains, the report said.
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