Sat, Jan 21, 2023 page5

• Taipei grade-A office rent up 3.2 percent last year

  MARKET DEVELOPMENT: Taipei could introduce more than 45,000 ping of grade-A offices in Xinyi District this year, a real-estate agency said

  • By Crystal Hsu / Staff reporter
  • • 
    • 
    • 

  Monthly retail rates for Taipei’s grade-A offices last year increased by 3.2 percent to NT$t2,975 per ping (3.3m2), driven by strong demand, but limited supply despite the lingering COVID-19 pandemic, real-estate agency Jones Lang LaSalle Taiwan Ltd (JLL Taiwan, 仲量聯行) said last week.

  Monthly rent exceeded NT$4,000 per ping for most upscale offices in the city’s Xinyi District (信義) and could climb higher this year when new office spaces join the market, the company said.

  The data showed that enterprises still have solid demand for high-quality office spaces, it said.

  

  Office buildings are pictured in Taipei’s Xinyi District on Oct. 5 last year.

  Photo: Hsu Yi-ping, Taipei Times

  However, it remains to be seen if landlords would continue to have the upper hand, as interest rate hikes by domestic and foreign central banks slow economic growth and turn companies cautious on leasing decisions, JLL Taiwan said.

  Office vacancy rates in Taipei averaged 2.6 percent last year, below 3 percent for four years in a row, the agency said, adding that the city’s figure compared with 7 percent in the Asia-Pacific region and 14 percent globally.

  The local market showed the vacancy rate was more than 2 percent lower in Xinyi District — where potential tenants had difficulty finding office spaces due to a lack of supply — than other districts last year, JLL Taiwan said.

  The Taipei market could see the entry of 45,000 ping of grade-A offices this year, mainly in Xinyi District, JLL Taiwan senior market director Brian Liu (劉建宇) told a news conference on Thursday last week.

  The new office spaces would inject vitality into the market and ease the supply crunch, Liu said.

  Second-tier areas such as Nangang District (南港) could become the next bright spot with 48,000 ping of new offices to become available over the next few years, due to the city government’s effort to build a new industrial cluster there, he said.

  Environmentally-friendly and newly-built office spaces would gain popularity as companies assign increased importance to net zero carbon emissions, JLL Taiwan said.

  Old office buildings could be forced out of the market unless they meet sustainability requirements through the urban renewal process, the company said.

  On the other hand, inflation, monetary tightening and other economic headwinds would constrain leasing demand, it said.

  The Financial Supervisory Commission last month raised the required minimum yield on property investments to 2.72 percent for life insurers, after the central bank adopted several interest rate hikes last year.

  If interest rate hikes continue this year, the required minimum yield could exceed 3 percent by the end of this year, JLL Taiwan investment manager Sherry Wu (吳瑤華) said.

  Investable properties would likely become scarce for life insurers and could affect the industry’s overall investment, she added.

  The life insurance industry struggles to find investable property targets in Taipei and New Taipei City due to the relatively higher home prices in those areas, Wu said.

  However, some commercial offices and leaseback factories in southern Hsinchu still support a yield of more than 3 percent, she added.
• Most Popular

  • 1

    CGA urges China not to use shipwreck for gain

  • 2

    International concerns raised after Lai’s flight blocked

  • 3

    China ‘incentives’ fail to sway Taiwan

  • 4

    Actor Darren Wang handed six months for obtaining others’ personal data

  • 5

    Pet cats outnumber pet dogs, survey shows