Taipei office rents to fall least in Asia: Jones Lang

Average rents will drop 5 percent to 15 percent from their peak last year to a trough next year, while property values will fall up to 10 percent, Alastair Hughes, Jones Lang's chief executive officer for Asia Pacific, said at a briefing today in Taipei. By comparison, Hong Kong rents will drop up to 50 percent and those in Singapore will decline about 80 percent, he said.

“The year 2009 will be the year that rents fall the most, but across the region 2010 will continue to fall,” Hughes said. “If you're a tenant or occupier, this is a good thing.”

An economic slowdown across Asia prompted tenants to vacate office space as they cut jobs, forcing landlords to lower prices. Taipei escaped the worst of the declines because tenants have fewer staff and property owners kept rents high in anticipation of demand from mainland China, said Sherry Wu, national director of markets at Jones Lang in Taipei.

“The landlords think that the Chinese will come here in one go, so they just hold the rental even if it's vacant,” said Wu. “They'd rather keep it empty than to give a discount.”

Taiwan began relaxing 60 years of restrictions on travel and trade with China after Ma Ying-jeou became president in May last year. In April, Taiwan began allowing Chinese to invest directly in local stocks, and the two sides are scheduled to begin negotiations about an economic framework by year's end.

Commercial real-estate values have remained relatively stable compared with other cities as local financial institutions bought property, Wu said. Commercial market transactions have totaled about NT$90 billion ($2.8 billion) so far this year, compared with NT$88 billion last year and about NT$100 billion in 2007, according to Jones Lang estimates.

Subscribe to The China Post and save 25%. Click here

SharePrintEmail

Write a Comment

Enter your comments - 3000 characters max

Type in image code

Submit

 Receive China Post promos Respond to this email