Grade-A offices in Taipei last year saw the lowest vacancy rates and best effective rents in the Asia-Pacific region, helped by strong demand from technology and financial firms, property consultancy and broker Jones Lang LaSalle (JLL) Taiwan said.
Vacancy rates in Taipei’s core business districts hovered at about 5 to 10 percent, on par with Singapore, but lower than the 10 percent seen in Shanghai, Beijing and Hong Kong’s Central District, JLL Taiwan managing director Kevin Hou (侯文信) told a media briefing on Thursday last week.
Taipei’s effective rent — the actual rent achieved by landlords after deducting renovation allowances, moving fees and other concessions — beat other first-tier cities in the region, including Tokyo, Hou said.
Photo: CNA
The figure represented the strongest in the post-COVID-19 pandemic era, although rental hikes showed signs of easing in the past two quarters, JLL Taiwan said.
Rent for the full year climbed 1.4 percent to NT$3,203 per ping (3.3m2), the smallest advance in three years, it said.
Rent hit NT$3,708 per ping in the city’s prime Xinyi District (信義) and averaged NT$2,616 and NT$2,546 in the Dunbei (敦北) and Dunnan (敦南) areas respectively, it said, adding that the average in Nangang District (南港) was NT$2,311.
Rent hikes moderated due to the entry of some large-scale office spaces into the market and growing uncertainty about the global economic outlook, Hou said.
As of Dec. 31 last year, the market had taken up 40 percent of the new supply, but there was still 17,000 ping of inventory to be digested, it said, adding that most of the new office spaces are in Nangang.
Vacancy rates are forecast to rise this year, with an additional 36,000 ping of Grade-A office spaces joining the market after stripping out and refurbishing some residential buildings that were originally intended for self-occupancy, Hou said.
Rental rates are likely to slow further this year, as landlords offer concessions to woo corporate tenants, Hou said.
Companies at home and abroad are worried about US president-elect Donald Trump’s threats of tariff hikes after his inauguration next week and have become cautious about spending, he said.
Taipei would remain competitive going forward, with GDP forecast to grow 3.13 percent this year, faster than in Singapore, Hong Kong, South Korea and Japan, said Sherry Wu (吳瑤華), a senior property investment analyst at JLL Taiwan.
The growth forecast suggests a deceleration from last year’s 4.25 percent increase, but remains resilient, Wu said.
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