Landlord strategies key to absorption success

• Taipei’s core business district captured a staggering around 19,600 ping of leased space in Q4 2025, representing 45% of annual transaction volume. This exceptional quarterly performance significantly exceeded typical seasonal patterns and demonstrated strong market momentum.
• The strong performance was driven by new developments like Cathay Cosmos, Yuanta Silver Star and Kingdom Mingchang buildings, with landlord strategies proving crucial for absorption and achieving 14,065 ping net take-up.

Strong absorption offsets new supply impact

• Overall, Q4 2025 demonstrated strong absorption, with CBD vacancy remaining subdued and declining 0.5% quarter-on-quarter. The Xinyi submarket saw the largest improvement, dropping 0.6% QoQ, confirming that prime district buildings remained tenants’ preferred choice.
• The Dunhua North submarket saw new supply from the Cathay Cosmos building (10,440 ping or 34,524 sq m). Despite this addition, landlords’ strategic leasing approach restricted vacancy growth to only 0.5%, reflecting strong market control.

Rental growth tempered by market rebalancing

• Alongside this vacancy improvement, Q4 2025 Taipei CBD rents averaged TWD 3,258 per ping, advancing 1.2% QoQ and 1.7% YoY. The measured growth trajectory reflects tenant-favourable market conditions driven by increased development pipeline deliveries.
• The Dunhua North submarket commanded the highest rental uplift at 4.2% quarterly and 7.6% annually. Performance was underpinned by premium green-building stock that repositioned the submarket’s rental level upward.

Outlook: Market dynamics shift amid new supply and evolving demand

• Looking ahead to 2026, Taipei CBD anticipates approximately 47,000 ping of new supply completions. After accounting for owner-occupation and pre-leasing commitments, an estimated 24,000 ping will seek market absorption, enhancing tenant leverage in lease negotiations.
• As premium office rental growth moderates, demand for sustainable environments persists, with LEED and WELL buildings commanding green premiums. Meanwhile, hybrid work continues to drive market demand for flexible terms and shared amenities.