The vacancy rate for grade-A offices in Taipei last quarter climbed to 2.7 percent, as companies reduced space utilization and moved to less popular areas to save on operating costs amid economic weakness, property consultancy Jones Lang LaSalle Taiwan (JLL Taiwan, 仲量聯行) said yesterday.
However, monthly rents still rose 2 percent from a year earlier to NT$2,981 (US$97.89) per ping (3.3m2) with rents in the prime Xinyi District (信義) remaining above NT$5,000 per ping, due to healthy demand and limited supply, JLL Taiwan’s office leasing advisory director Christina Yu (游淑芬) said.
“The data show that the leasing market took a hit from an economic slowdown, which has prompted corporate tenants to trim office space or relocate to less expensive locations to control costs,” Yu told a media briefing.
Photo: Hsu Yi-ping, Taipei Times
Cost controls would further accelerate relocation to suburban areas, with Nangang District (南港) likely to be the biggest beneficiary, as 290,000 ping of new office space is to enter the market there between this year and 2027, bigger than the existing supply in central locations, the analyst said.
By measure of rent growth, Taipei outperformed other markets in the region due to its relative rent affordability, JLL Taiwan said.
However, the gap is narrowing, as office rents in Hong Kong are 2.5 times those in Taipei, when they used to be 3 times higher, Yu said.
JLL Taiwan has seen rent premiums of up to 15 percent for office buildings with energy conservation certificates, as corporations at home and abroad assign more importance to environmental friendliness and sustainable governance.
New JLL Taiwan managing director Kevin Hou (侯文信) said the consultancy would tap into that demand by helping clients obtain green certificates.
More than 50 percent of Grade-A office buildings in Taipei are older than 20 years and only 6 percent meet sustainable governance standards, Hou said, adding that 40 percent of carbon emissions come from property development and operations.
Old buildings use more electricity, Hou said.
Corrections in the office space market are due to a lack of business confidence and over-hiring over the past few years, he said, adding that the adjustment cycle would last for a while.
JLL Taiwan executive chairman Tony Chao (趙正義) said he is less pessimistic, and believes that urban renewal and railroad construction would continue to support Taiwan’s commercial and investment markets.
At the same time, companies that are returning home would display real demand for industrial properties, Chao said.
IN THE AIR: While most companies said they were committed to North American operations, some added that production and costs would depend on the outcome of a US trade probe Leading local contract electronics makers Wistron Corp (緯創), Quanta Computer Inc (廣達), Inventec Corp (英業達) and Compal Electronics Inc (仁寶) are to maintain their North American expansion plans, despite Washington’s 20 percent tariff on Taiwanese goods. Wistron said it has long maintained a presence in the US, while distributing production across Taiwan, North America, Southeast Asia and Europe. The company is in talks with customers to align capacity with their site preferences, a company official told the Taipei Times by telephone on Friday. The company is still in talks with clients over who would bear the tariff costs, with the outcome pending further
NEGOTIATIONS: Semiconductors play an outsized role in Taiwan’s industrial and economic development and are a major driver of the Taiwan-US trade imbalance With US President Donald Trump threatening to impose tariffs on semiconductors, Taiwan is expected to face a significant challenge, as information and communications technology (ICT) products account for more than 70 percent of its exports to the US, Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) president Lien Hsien-ming (連賢明) said on Friday. Compared with other countries, semiconductors play a disproportionately large role in Taiwan’s industrial and economic development, Lien said. As the sixth-largest contributor to the US trade deficit, Taiwan recorded a US$73.9 billion trade surplus with the US last year — up from US$47.8 billion in 2023 — driven by strong
AI: Softbank’s stake increases in Nvidia and TSMC reflect Masayoshi Son’s effort to gain a foothold in key nodes of the AI value chain, from chip design to data infrastructure Softbank Group Corp is building up stakes in Nvidia Corp and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the latest reflection of founder Masayoshi Son’s focus on the tools and hardware underpinning artificial intelligence (AI). The Japanese technology investor raised its stake in Nvidia to about US$3 billion by the end of March, up from US$1 billion in the prior quarter, regulatory filings showed. It bought about US$330 million worth of TSMC shares and US$170 million in Oracle Corp, they showed. Softbank’s signature Vision Fund has also monetized almost US$2 billion of public and private assets in the first half of this year,
POWELL SUCCESSOR: US Fed Governor Adriana Kugler’s resignation gives Donald Trump an opening on the board, potentially accelerating his decision on the next chair US President Donald Trump suddenly has a chance to fill an opening at the US Federal Reserve earlier than expected, after Fed Governor Adriana Kugler announced her resignation on Friday. It might also force him to pick the next Fed chair months sooner than he had anticipated. “The ball is now in Trump’s court,” LH Meyer/Monetary Policy Analytics Inc economist Derek Tang said. “Trump is the one who’s been putting pressure on the Fed to do this and that, and Trump says he wants to have his own people on. So now he has the opportunity.” Kugler’s exit unfolds amid unprecedented public pressure
RSS