While investors possess a healthy appetite for office properties, most buyers retain a cautious view towards pricing owing to the COVID-19 pandemic. Office capital values in Taipei were stable in Q2 2020, leaving prime office yields unchanged at 2.63%.
Office net absorption in Taipei fell from 6,136 ping in Q1 2020 to just 1,277 ping in Q2 2020, the lowest level since Q4 2017. The decline was attributed to a slowdown in Grade A office leasing activity.
Office leasing demand in Taipei is expected to be driven by the technology and life sciences industries over the next few quarters. Relocation activity will be limited, partly due to the tight supply of lettable space. Most occupiers will opt for lease renewals before shifting to new long-term real estate strategies once the global spread of COVID-19 has been contained.