Thu, May 22, 2003 - Page 10 News List

Real estate prices, rent in Sogo area devastated


Commercial and residential rents in the area of Pacific Sogo Department Store (太平洋崇光百貨) in Chunghsiao East Road have dropped recently as SARS fears have scared off interest in the neighborhood, real estate analysts said yesterday.

"Commercial rents near Pacific Sogo Department Store's Chunghsiao East Road branch has dropped by 15 to 20 percent recently," said Wu Quei-shen (吳癸森), associate manager of real estate agency Pacific Rehouse (太平洋房屋). "Residential rents in the area also declined by 10 percent."

Retail property rentals in the Chunghsiao East Road area average 10,000 per ping, and residential rentals in the same neighborhood are 1,000 per ping, Wu said.

The dip was triggered by a slump in retail business after a cashier at Sogo's Chunghsiao East Road store fell ill with SARS in early May, scaring flocks of shoppers away, Wu said

After a three-day self-imposed disinfection shutdown, Sogo reopened to throngs of elated sales seekers. But neighborhood vendors nevertheless took advantage of the incident to reduce rents.

"After retailers suffered from the loss, they'd certainly negotiate with landlords to cut the rents to survive," Wu said.

Other districts or businesses that saw their names splashed in the media headlines over the SARS outbreak may also be affected.

Victor Chang (張欣民), an associate manager of Sinyi Real Estate Inc (信義房屋), pointed out that rents in Wanhua district also slightly fell after a SARS outbreak in Hoping Hospital and later the Hwa Chang Public Housing Complex in early May, putting over three hundred residents into home quarantine.

"People interested in Wanhua properties have tended to bargain on rental prices, arguing that SARS has contaminated the area," Chang said.

That left area property owners with little choice but to lower prices, Chang said.

In addition to Chunghsiao East Road and Wanhua district, Wendy Hsueh (薛惠珍), director of Research & Consultancy Department of DTZ Debenham Tie Leung International Property Advisers (戴德梁行), said rents may also fall in neighborhoods near Takashimaya Department Store (大葉高島屋) in Tienmu and the Taipei Armed Forces Sungshan Hospital on Chienkang Road.

If the outbreak drags on long-term, that may be only the tip of the iceberg.

"If SARS drags on for the next half year, there will be a significant dive in rents in these areas," Hsueh said.

Takashimaya shut down for four days last week after one staff member was listed as a suspected SARS carrier in mid May, while the hospital was recently made a designated SARS hospital. Takashimaya reopened for business yesterday with a fanfare of sales, but shopper traffic reportedly dropped 50 percent compared to normal.

Real estate and health concerns simply don't mix.

"Unexpected crises such as earthquakes and the SARS epidemic usually impact the real estate market negatively due to a rise in public insecurity," Hsueh said.

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