Taipei office capital values were unchanged despite the robust leasing market. Investors generally remained price-conscious and only willing to pay market prices. Prime office yields increased slightly to 2.62% on the back of rental growth.
Overall office net absorption remained strong at 17,676 ping in Q2 2019. Leasing activity was driven by flight-to-quality from occupiers in the technology and pharmaceutical industries. Several such companies increased the size of their space when relocating to new premises.
Grade A office vacancy is forecast to fall to below 4% in the next six months in light of strong enquiry levels. Tech companies will remain active in seeking relocation options, while financial institutions will mainly adopt a conservative approach towards real estate strategy. Grade B office rents are forecast to grow, slowly, as institutional landlords raise their rental expectations.