Savills

Publication

Office Brief Q1 2024

Article

Contacts & Related Research

Leasing demand rebounds in Q1

The technology, gaming, energy, and pharmaceutical industries are driving the office leasing market.

  • The leasing market has maintained a positive momentum from the previous quarter as take-up reached approximately 3,000 ping in Q1/2024.
  • Xinyi District contributed half of the take-up, driven by the technology, gaming, energy, and pharmaceutical industries.
  • The average of Grade A rent increased by 0.8% QoQ to NT$3,148 per ping in Q1 and the completion of new office buildings in non-core areas led the overall vacancy rate to rise to 6.0%.
  • Landlords of older buildings are tending to opt for redevelopment with 16 office buildings in the city center applying for urban renewal in recent years, and this is expected to generate potential relocation demand of between 50,000 and 70,000 ping.
  • Environmental sustainability and carbon reduction issues are gaining attention. The Taipei City Government announced plans to lower the urban temperature by reducing emissions from public sector buildings which is well ahead of Taiwan's 2050 net-zero pathway.

Overall vacancy rates are expected to rise in the coming quarters, however, new buildings have limited room in rental negotiations due to elevated construction costs. Meanwhile, older buildings will struggle to maintain rents, given the large infl ux of new supply and tenants seeking better-quality environments.

Erin Ting, Savills Research
Read more