Taipei CBD office transaction volumes to exceed 30,000 gross ping by year-end

Demand remains steady despite negative absorption in Q3.

In a recent report, JLL said the pressure on office vacancy rates will be reduced as no new supply is expected in Taipei’s CBD through end-2024, allowing the existing inventory to be steadily absorbed before vacancy rates potentially rise again with new supply in 2025.

“Despite the net absorption decline in Q3 2024, demand remains steady. By end-2024, annual transaction volume in the Taipei CBD is expected to exceed 30,000 gross ping,” the report said.

Here’s more from JLL:

Taipei CBD leasing transactions in Q3 2024 totalled 6,800 gross ping, while cumulative leasing volume for Q1–Q3 2024 reached 24,200 gross ping, already surpassing 2023’s full-year total.

Net absorption in Q3 2024 softened due to extended negotiations between tenants and landlords over rental terms. Justifying above-market rents in new buildings became the key focus of lease discussions.

Demand for office upgrades continues

With no new supply entering the market in Q3 2024, existing inventory was steadily absorbed, leading to a decline in overall CBD vacancy rates.

The Others submarket saw strong demand for newer supply, achieving the highest net absorption while the vacancy rate fell to 12.2%, marking the largest drop across all areas. Xinyi District saw stable net absorption.

New office supply drives rent growth

Landlords remained cautious about raising rents, as evidenced by a modest quarterly rent increase of 0.2% for Taipei CBD overall.

However, the Others submarket saw a q-o-q rent growth of 4.9% in Q3 2024, driven by newer supply, with rents surpassing the Dunhua South submarket.