The nation’s office leasing market last quarter proved resilient as a lack of new supply and stable demand kept rents and vacancy rates nearly unchanged, international property consultancy Jones Lang LaSalle Inc (JLL) said yesterday.
The same factors might keep the market steady for the rest of this year, JLL said.
Vacancy rates for grade A offices in Taipei in the January-to-March period edged up 0.3 percentage points to 2.4 percent, while rents rose 0.1 percentage points to NT$2,809 (US$93.16) per ping (3.3m2) per month, JLL Taiwan senior market director Brian Liu (劉建宇) told an online news conference.
The rental total made Taipei the second-best performer behind Tokyo’s 1.4 percent increase, while other cities internationally reported modest declines due to the COVID-19 pandemic, Liu added.
The relatively mild outbreak in Taiwan and a lack of new supply for next year led to a greater number of upscale office space being rented, he said.
This year, office space rentals — a reliable source of income for institutional landlords — might remain flat, as companies become cautious about expansion, compared with last year’s expectations of stable gains, Liu added.
If the crisis persists, corporate tenants might request grace periods for rental payments or temporary reductions in rent to help weather the business slowdown, Liu said.
While nearly 29,272 ping of office space is to enter the market later this year, vacancy rates might hover at less than 2.5 percent, he said.
The commercial property market is a different story, JLL Taiwan managing director Tony Chao (趙正義) said.
“Now could be the worst time or best time [for property investment] depending on how the pandemic settles,” Chao said.
“Market players are conservative about real-estate investments, but the health crisis will eventually be over,” he added
JLL expects to see a U-shaped recovery — possibly by the third quarter of this year, Chao said.
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