Despite robust investor interest in office assets, most buyers remained cautious and are reluctant to chase prices higher. Taipei office capital values therefore stayed flat this quarter.
Taipei’s office leasing market remained active in Q3 2019. However, total net absorption decreased significantly to 5,994 ping as a result of average vacancy rates falling to new lows. Leasing activity continued to be led by tenants relocating for upgrading purposes, especially those in the professional services and technology industries.
Demand for Grade A office space will be stable in the coming quarters, supported by multinationals seeking flight-to-quality moves. However, the number of new leases may decrease due to the shortage of medium and large office units available for lease. Grade B office rents are expected to continue to grow gradually as landlords adopt a more realistic stance towards asking rents.