Research

4Q22 Taipei Commercial Real Estate Market Report

Rent reaches a new high, with an average annual increase of 3.2% for grade A office; due to shortage of supply, the vacancy rate remains at a low level.

January 15, 2023
Contributors:
  • Josh Hsu
2022 Q4 Office Leasing Market Summary:

In the fourth quarter of 2022, the average rent for Grade A office space increased by 3.2% compared to the same period last year, reaching a historic high of NT$2,975 per ping per month. Among them, the average rent in Xinyi District has exceeded NT$3,600 per ping per month, becoming the largest contributor to rent growth. It is expected that the trend of rising rents will continue in the future.

Starting from 2023, a large amount of new supply will be released. Facing the upcoming large amount of new supply, the performance of absorption in the next few years will be the key to determine whether the demand for high-quality office space will continue to be strong.

Global Market Overview Summary: 

Affected by the appreciation of the US dollar and the tightening of US monetary policy, risks such as the global economy and debt have increased, leading to a gradual slowdown in commercial real estate investment in the Asia-Pacific region in Q3.

Investment Market Summary: 

The transaction volume in commercial real estate in 4Q22 reached NT$19.4 billion, a decrease of 48% compared to 4Q21. The total investment for the whole year of 2022 was NT$103.2 billion, a decrease of 22% compared to the previous year, but still exceeded the pre-pandemic level of NT$95.7 billion in 2019.

  • Commercial real estate transactions were concentrated in the northern region throughout the year, particularly in Taipei City.

  • In 2022, insurance companies were actively expanding their presence in the market, while the technology and manufacturing industries became more cautious due to market uncertainties.

  • By the end of 2022, the minimum yield threshold for life insurance industry investments in real estate has been raised to 2.72%.

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