Office rents in Taipei to stay firm
The opening of the Taipei 101 tower has added a large volume of premium office space to the market, but growing demand will see rental rates stay firm as the new space is slowly absorbed by the market, according to property consultants.
About 8 per cent of Taipei 101's 198,000 square metres is occupied, with leasing contracts for nearly 50 per cent of the space already signed.
The tower was officially opened on December 31 last year, but office space was not available until the first half of this year and the first tenant moved in in April, six months behind schedule.
The addition of Taipei 101 and the Uni-President building, both in the upscale Xin-yi district, in the second quarter added 224,000 sq ms to the supply of what leasing agent Jones Lang LaSalle calls Grade A office space, a boost of 17 per cent for the grade and taking vacancy rates to 19 per cent for that category.
Jones Lang LaSalle is a leasing agent for Taipei 101 and was replaced last month by CB Richard Ellis as lead agent. Despite the large amount of vacant space for a building that has been marketed for more than three years, management believes the prospects for filling the building are good.
'It's getting better because some of the corporations are looking to upgrade,' said Michael Liu, associate vice-president of Taipei Financial Centre Corporation.
He said the tower would receive a significant boost in October when the Taiwan Stock Exchange moved in taking five floors, close to 13,200 sq ms.
That move would be followed closely by a succession of related companies such as brokers and other financial institutions.
Colliers International estimates rentals for premium buildings rose 1.35 per cent last quarter to about US$22.3 per sq m. Overall rentals remained flat at US$16.8 per sq m.