Vacancy rates for grade A offices in Taipei held steady at 2.05 percent last quarter with virtually flat rents, as Taiwan’s quick control of its COVID-19 outbreak allowed the local leasing market to emerge unscathed.
The resilient showing came even though the global leasing market reported a 59 percent slump, with the pace of retreat 65 percent in the US and 61 percent in Asia, Jones Lang LaSalle Inc data showed.
“Taiwan put up a remarkable performance, thanks to its efficient virus control,” Jones Lang LaSalle Taiwan senior market director Brian Liu (劉建宇) told a news conference in Taipei yesterday.
The vacancy rate was a 30-year low, while rents climbed to a 19-year high, Liu said.
He forecast a sustained rent increase toward a record, likely next year, of NT$3,000 per ping (3.3m2), as there is no sign of a lot of new supply.
Taipei-based China Life Insurance Co (中國人壽) has made clear it would not release new space at its new office building when construction is completed in 2022, Liu said.
Fubon Life Insurance Co (富邦人壽) has inked a deal to lease 6,000 ping of office space at its forthcoming building on Liaoning Street in Taipei’s Zhongshan District (中山) to Standard Chartered Bank and would retain the other 7,000 ping for its own use.
Transglobe Life Insurance Co (全球人壽) has agreed to lease 4,600 ping of new office space, according to a Jones Lang LaSalle tally.
That suggests no new office supply between now and the end of 2022 in Taipei’s central business districts, Liu said.
Taiwan’s economy has received a boost from global demand for remote working and learning devices amid the pandemic, and renewed US-China tensions, Jones Lang LaSalle Taiwan managing director Tony Chao (趙正義) said.
Both factors are driving global technology giants to restructure supply chains, bringing order transfers to local firms, Chao said.
The government lent support by introducing stimulus measures to make Taiwan an attractive investment destination and the strategy paid off, he said.
Chao said his prediction last year about a boom this year has been realized, judging by record commercial property transactions and active land deals last quarter.
Growth momentum is to sustain this quarter, despite lingering uncertainty, as Taiwan has outperformed the world in terms of economic recovery, Jones Lang LaSalle said.
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