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.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday obtained the government’s approval to inject an additional US$7.5 billion into its US subsidiary, the Department of Investment Review said in a statement. The department approved TSMC’s application of investing in TSMC Arizona Corp, which is engaged in the manufacturing, sales, testing and design of IC and other semiconductor devices, it said. The latest capital injection follows a US$5 billion investment for TSMC Arizona approved in June. The chipmaker has broken ground on two advanced fabs in Arizona with aggregated investments approved by the department totaling US$24 billion thus far. According to TSMC, the first Arizona
The lethal hack of Hezbollah’s Asian-branded pagers and walkie-talkies has sparked an intense search for the devices’ path, revealing a murky market for older technologies where buyers might have few assurances about what they are getting. While supply chains and distribution channels for higher-margin and newer products are tightly managed, that is not the case for older electronics from Asia where counterfeiting, surplus inventories and complex contract manufacturing deals can sometimes make it impossible to identify the source of a product, analysts and consultants say. The response from the companies at the center of the booby-trapped gadgets that killed 37
FRIENDLY TAKEOVER: While Qualcomm Inc’s proposal to buy some or all of Intel raises the prospect of other competitors, Broadcom Inc is staying on the sidelines Qualcomm Inc has approached Intel Corp to discuss a potential acquisition of the struggling chipmaker, people with knowledge of the matter said, raising the prospect of one of the biggest-ever merger and acquisition deals. California-based Qualcomm proposed a friendly takeover for Intel in recent days, said the sources, who asked not to be identified discussing confidential information. The proposal is for all of the chipmaker, although Qualcomm has not ruled out buying some parts of Intel and selling off others. It is uncertain whether the initial approach would lead to an agreement and any deal is likely to come under close antitrust scrutiny
SECURITY CONCERNS: The proposed ban on Chinese autonomous vehicle software and hardware would go into effect with the 2027 and 2030 model years respectively The US Department of Commerce today is expected to propose prohibiting Chinese software and hardware in connected and autonomous vehicles on US roads due to national security concerns, two sources said. US President Joe Biden’s administration has raised concerns about the collection of data by Chinese companies on US drivers and infrastructure as well as the potential foreign manipulation of vehicles connected to the Internet and navigation systems. The proposed regulation would ban the import and sale of vehicles from China with key communications or automated driving system software or hardware, said the two sources, who declined to be identified because the