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Taiwan Real Estate Report Q1 2011
Business Monitor International, Jan 2010, Pages: 59
Taiwan Real Estate Report provides industry professionals and strategists, corporate analysts, real estate associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Taiwan's Real Estate industry.
The fortunes of Taiwan’s commercial real estate sector remain leveraged to those of the IT sector and tothe economy of mainland China. Unfortunately, the likely deceleration in China’s economy is coming at a
time when there is a glut of space in Taipei – especially in the retail and industrial sub-sectors.Over the course of 2009, there was a sharp fall in rental rates, and an even greater rise in yields. It appearsthat the protagonists in the real estate market have adjusted their expectations. Over the next five years,most of the investment returns will come from income, rather than from capital growth.
The good news is that most of the adjustment has taken place. When we interviewed them for the secondtime in July 2010, our in-country sources indicated that rents, yields (and, therefore, capital values) hadremained broadly stable since the end of 2009.
The massive Gate of Taipei project will add 2-3mn sq m of new, top quality, space to the office and retailsub-sectors. Our in-country sources are confident that it will cause overall rental rates (and, we wouldpresume, prices and capital values) to increase. However, it may cause the already fairly high vacancyrates to grow in older and less glamorous premises.
For the time being, we continue to expect that yields will generally track sideways in all three sub-sectors.Increases in rental rates will, in general, be met with corresponding rises in prices and capital values.
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