TAIPEI, Taiwan -- Most major real estate deals in the first quarter were for industrial purposes — an unusually high proportion, realty advisory giants Jones Lang LaSalle Incorporated (JLL) and Cushman & Wakefield reported at separate press events Thursday.
▲圖／英文中國郵報
According to JLL Managing Director Tony Chao (趙正義), industry-related real estate deals made up 56 percent of total transactions in an industry where commercial real estate transactions have traditionally dominated over 50 percent of investments.
Cushman & Wakefield reported a similar trend, citing a sharp year-on-year rise in demand for industrial real estate and self-use factory space.
Industry-related transactions rebounded this past quarter, growing 81 percent, Cushman & Wakefield researchers said.
Both firms noted that two of the 10 largest real estate transactions of the past quarter were industrial sales: one a 6,117-ping (217,667-square-meter) factory in Hsinchu County's Hukou Township purchased by Darwin Precisions Corp. for NT$915 million and the other a 2,699-ping (96,041-square-meter) factory in Taichung City's Xitun District sold to Excel Cell Electronic Co., Ltd. for NT$677 million.
Chao noted that the demand for industrial real estate for owner occupation as opposed to as an investment was "very apparent this past quarter," in both the Taiwanese and global markets.
Land Transactions
As CBRE Ltd., another one of the big five commercial real estate companies, reported Wednesday, land transactions made up most of the overall transaction values for first-quarter sales of NT$33.6 billion.
Cushman & Wakefield found that land transactions totaled NT$24.2 billion, signaling a break from 2016's three consecutive quarters, in each of which transactions failed to hit the NT$20 billion mark.
Analysts at the firm said they were expecting overall land transactions for 2017 to return to the NT$110 billion mark, given the year-on-year first quarter increase and the government's suspension of policies that some say deter potential transactions.
JLL looked in particular at large-scale land transactions, which they found made up NT$18.4 billion of all land transactions. Of
these large-scale transactions, 65 percent (or roughly NT$12 billion) were for developers interested
in building both residential and commercial buildings, Chao said.
Hotels and Commercial Spaces
Although 2016's occupancy rate for high-end chain hotels saw a 3.4 percentage point decline from 2015, leaving it at 72.3 percent, most hotels were able to raise their occupancy rates after slightly lowering their prices by 1.1 percent to an average of NT$4,761, Chao said.
Well-known high-end hotels such as Le Meridien Taipei, W Taipei, Cosmos Hotel Taipei and Caesar Park Taipei all had occupancy rates of 80 percent or above, which in hotel terms meant that they were fully booked during the high season.
These figures, Chao said, showed that even with the decrease in Chinese tourists, the increase of 10 percent to 15 percent in Japanese, South Korean, American and European tourists was enabling hotel industry growth to continue.
On the subject of other commercial spaces, such as retail and department stores, Cushman & Wakefield found two types of businesses that were actively expanding into the Taiwanese market.
These, he said, were international sports retail brands, notably Nike's Jordan, which recently opened up the first Taiwan-based basketball experience store in Ximending, and restaurants including New York's Sarabeth's, TimHoWan, and T.G.I. Friday's which have all opened up at department stores.
Overall 2017 Trend
Chao reiterated throughout his report that Taiwan's real estate market was one that offered similar returns but virtually the lowest risk compared to other markets worldwide.
Accordingly, Chao said, there could be foreign investments in Taiwan's real estate industry in the upcoming second and third quarters, which would be a welcomed change from the zero foreign investment during the first quarter that CBRE reported Tuesday.
On the topic of residential real estate, of which high prices have long been a major concern, Chao said prices will fall, which will lead to increased buying later this year.
JLL researchers found that the residential real estate prices are likely to drop another 5 percent to 10 percent before rebounding, whereas at the moment, Cushman & Wakefield said the market would not bottom out in the near future.
Deputy General-Manager Richard J.T. Liu (劉天仁) of Chinatrust Real Estate Co. previously stated at the end of last year that an optimistic forecast for the market was that it would bottom out in the latter half of the year and rebound in 2018.
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