Taipei's office vacancy rate drops below 10% in Q1

This article was published by the Taiwan Headlines on May 26, 2006. It reports that the average vacancy rate of rental offices in Taipei City stood at 9.92 percent in the first quarter of 2006, down 1.56 percent from the 11.48 percent posted in the last quarter of 2005. This was the first time that the vacancy rate had gone below 10 percent since 2004.

According to market observers, Taipei's rental office market seemed to have bounced back, with the vacancy rate experiencing consecutive drops in the past three quarters. As a consequence, rents have been increasing as demand rises.

Taipei's office rental floor space has been increasing since 2002. However, most of this increased space is found in the new headquarters buildings of enterprises, so that there is little space available for general renters. Currently, six more office buildings are either being planned or under construction in metropolitan Taipei City. Three of these will be enterprise headquarters.

According to market observers, following the current market trend, the average vacancy rate for rental offices might further drop to 7 percent at the end of 2006. Because of this and Taiwan's stable economic growth, the rents for such offices are very likely to go up.

In recent years, the domestic property market has recovered slowly, and the average rental prices have increased by 20 percent. As for popular commercial buildings or retail store locations, the average growth rate of rental prices has jumped to 30 percent. Market observers attribute the current rise of housing rents to the growing demand of the market. It is expected that the upward trend will keep going as a result of possible general inflation caused by soaring international oil prices.