Cumulative transaction volume from Q1–Q3 2024 surpasses the total for full-year 2023

• 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.

Outlook: Vacancies rise despite strong demand as Taipei CBD awaits new supply in 2025

• The pressure on 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.