The vacancy rate for Grade-A offices in Taipei last quarter was unchanged at 2.7 percent, while rents climbed 1.3 percent from a year earlier, as companies maintained a cautious approach about spending amid economic weakness, property consultancy Jones Lang LaSalle (JLL) Taiwan said on Tuesday.
“The vacancy rate has consolidated within the 3 percent range, indicating the leasing market remains healthy, despite the economic slowdown,” JLL Taiwan said, adding that rent increased due to a tight supply of upscale offices in the city’s prime Xinyi District (信義).
However, economic uncertainty has turned corporate tenants conservative about expanding, which would constrain the pace of rent hikes ahead, the consultancy said.
Photo: Hsu Yi-ping, Taipei Times
JLL Taiwan managing director Kevin Hou (侯文信) said that commercial properties were not spared the impact of the economic slowdown, but nonetheless performed better than expected last quarter.
That was because regular rent income proved a good defense against inflation, a quality that is not easily replaced by other investment tools, Hou said.
The commercial property market might gain further momentum in the second half if the local economy comes out of the woods, Hou said.
In particular, JLL Taiwan said it has spotted growing demand for environmental, social and governance (ESG) green buildings, as Taiwan is seeking to achieve net zero carbon emissions by 2050.
A JLL survey showed that 65 percent of Grade-A office spaces in Xinyi have green architecture certifications, with six buildings owning multiple green certifications.
A considerable number of Grade-A building landlords have introduced plans to help tenants purchase green energy, with life insurers the most active, JLL said.
More than 55 percent of Grade-A offices in Xinyi District operate on green energy and this percentage is likely to rise in line with the global leasing trend, the consultancy said.
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