Prime Taipei office rentals to fall 5-10 pct: DTZ

TAIPEI Jan 7 (Reuters) - Prime office rentals in Taiwan's capital Taipei could fall 5-10 percent this year and the value of real estate across the island will likely shrink further due to a sluggish economy, property services company DTZ DTZ.L said on Wednesday.

Listed companies that purchased land in Taipei after the third quarter of 2008 could also suffer a loss of about 20 percent in the value of the real estate after Taiwan adopted new accounting rules on Jan. 1.

"Things are looking very cloudy for the real estate sector right now, and the industry will have to decide whether or not they want to push prices down further," said Billy Yen, general manager of DTZ's Taiwan unit.

Office rentals in prime Taipei areas fell 2.26 percent in the fourth quarter from the previous three months, logging the first decline since late 2004, as the global financial crisis sapped demand for high-end real estate.

An expected increase in the supply of office space and weakened demand could push rents down even further this year, Yen said.

"We've already seen rents in the Taipei 101 building fall by 10 percent in the last quarter," said Jessica Lu, senior manager for corporate services at DTZ.

Taipei 101 is one of the island's most iconic modern skyscrapers, and at one time took the accolade of being the world's tallest building.

DTZ figures showed the value of foreign investors' real estate investments fell to T$19.9 billion ($600 million) last year from T$44.5 billion in 2007, and the company was "even more conservative" on the sector's outlook for this year. (Reporting by Roger Tung; Writing by Kelvin Soh, Editing by Jacqueline Wong)