The leasing market for Taipei’s upscale offices was resilient last quarter, as the monthly average rent gained 0.7 percentage points to NT$2,847 (US$101.13) per ping (3.3m2), although the vacancy rate climbed slightly to 2.4 percent, the local branch of Jones Lang LaSalle Inc (JLL) said yesterday.
The minor increase in vacancy resulted from landlords squeezing extra spaces to meet market needs amid a lack of fresh supply in central locations, JLL senior market director Brian Liu (劉建宇) told an online news conference.
The vacancy rate remained ultralow at 2.4 percent last quarter — albeit slightly up from 1.9 percent in the second quarter — which is why landlords increased rents upon renewing contracts, Liu said.
Photo: Hsu Yi-ping, Taipei Times
“Landlords had the upper hand in negotiations,” he said.
JLL Taiwan, which controls 60 percent of the local market, said that the average monthly rent for Grade-A offices could rise to a record NT$3,000 per ping next year, supported by stable demand from technology, financial and Internet businesses.
Supply, on the other hand, would stay tight, it said.
The supply crunch has prompted JLL Taiwan to focus its attention on the pre-leasing market these days, a trend that is likely to persist until massive supply enters the market in 2025, JLL managing director Tony Chao (趙正義) said, adding that a vacancy rate of 5 to 8 percent is considered the norm.
Relocation and upgrade needs would add further momentum to the market, as 49 percent of top-grade offices in Taipei turn 20 years or older, Chao said.
The process of digitalization and the COVID-19 pandemic are reshaping the concept of ideal and efficient office spaces and layouts, he said.
The average office rent in the city’s prime Xinyi District (信義) picked up 0.4 percentage points quarterly to NT$3,435 per ping, diverging increasingly from rates in other popular locations, the broker said.
Rental rates for landmark buildings way exceeded the benchmark, Chao said, referring to newly completed and upcoming office spaces.
Vacancy rates in Nangang District (南港) dwindled to 0.8 percent, while rents held steady at NT$1,400 to NT$2,500 per ping, JLL Taiwan said.
Vacancy figures stood little changed in western Neihu District (內湖) at 4.82 percent, with rental fees averaging NT$1,300 to NT$2,000 per ping, its quarterly report said.
Honhui Ruiguang Plaza (宏匯瑞光), a mixed-use complex on Neihu’s bustling Ruiguang Road, is approaching full occupancy, JLL Taiwan said.
The economy at home and abroad is emerging from the pains of the COVID-19 pandemic, which is favorable to the market, despite lingering uncertainty, it said.
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