Taipei’s Grade-A office market showed signs of deceleration last quarter, as firms took a more cautious stance amid rising global trade tensions and a strengthening New Taiwan dollar, real-estate consultancy Jones Lang LaSalle (JLL) Taiwan said on Tuesday.
From April to June, total leasing volume for Grade-A office space reached 7,020 ping (23,207m2), bringing the first-half total to 20,258 ping — a 17 percent year-on-year decline, the company said.
JLL Taiwan attributed the slowdown to lengthy decisionmaking cycles among corporate tenants, reflecting broader concerns over external economic pressures.
Photo courtesy of Jones Lang LaSalle Taiwan
“The market is clearly in a wait-and-see mode,” JLL Taiwan head of leasing advisory Christina Yu (游淑芬) told a news conference in Taipei.
Domestic and foreign companies have become more conservative in expanding or relocating office space, she said.
One of the clearest shifts was in the size of leasing deals: Transactions smaller than 200 ping accounted for 48 percent of all activity, while those bigger than 700 ping dropped by 11 percentage points from the previous quarter, Yu said.
The trend suggests firms are opting for flexibility and smaller commitments over large-scale expansions, she said.
Supporting that shift, demand for flexible workspaces — such as serviced offices and coworking facilities — rose notably, JLL Taiwan said.
While Taipei’s central business district (CBD) continued to lead the market with 93 percent of total leasing activity, leasing in secondary submarkets was more evenly spread, signaling more diversified location strategies by tenants, the company said.
The CBD’s vacancy rate ticked up slightly to 6.7 percent, mainly due to new supply entering the market, JLL Taiwan said.
Average rents in the CBD edged up 0.63 percent year-on-year to NT$3,216 per ping per month, although quarterly growth slowed to just 0.07 percent, signaling stabilizing rental momentum, it said.
Looking ahead, JLL Taiwan expects vacancy rates to rise in the second half of the year, potentially approaching double digits, as major new projects by Shin Kong Life Co (新光人壽) and Cathay Life Insurance Co (國泰人壽) are slated to join the market.
Still, the market remains fundamentally healthy, with no signs of distress leasing, it said.
However, sustained macroeconomic uncertainty and the strong New Taiwan dollar could weigh on demand, particularly from tech and manufacturing firms sensitive to export competitiveness, it said.
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