Office rents might edge up this year as healthy economic fundamentals spur demand for space, although a large supply might boost vacancy rates a bit, international property agency Jones Lang LaSalle Inc (JLL) said yesterday.
“Continued economic improvement at home and abroad might lend support to demand for upscale office and allow rents to grow 2 percent to 3 percent,” JLL associate market director Brian Liu (劉建宇) told a media briefing.
Vacancy rates could climb 1 percent to 2 percent as new skyscrapers, such as Taipei Nan Shen Plaza (臺北南山廣場), enter the market, raising the total supply to 56,000 ping (185,124m2) this year, Liu said.
The Nan Shen complex in the Xinyi District (信義) near Taipei 101 has secured tenants for 90 percent of its space, he said.
Monthly rents for the complex might rise to more than NT$3,000 (US$101.6) per ping and approach NT$4,000 in the near future after favorable terms expire, given the lack of new supply on the horizon, Liu said.
Take-up rates totaled 10,777 ping last quarter, while vacancy rates were down 1.4 percentage points to 7.1 percent, JLL’s quarterly report showed.
The showing is the strongest in eight quarters, Liu said.
Demand for co-working office space could gain popularity in line with the rise of new technologies, start-ups and corporate integration in assorted sectors, he said.
Last year saw take-up rates amounting to 43,056 ping, compared with the 10-year average of 20,000 ping, as financial conglomerates, notably Taiwan Cooperative Financial Holding Co (合庫金控), moved to new headquarters, the report said.
A stronger-than-expected global economy also boded well for improving sentiment, JLL Taiwan managing director Tony Chao (趙正義) said.
The global recovery could be sustained this year, which would allow companies to upgrade and strengthen their operations, Chao said.
JLL is more optimistic about the commercial property market, which might even see growth with a positive bias this year after a 2 percent increase to NT$61.2 billion last year, Chao said.
The top 10 domestic insurance companies have more than NT$5 trillion of funds available for property investment, Chao said.
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