The first auction of commercial properties in the greater Taipei and Taoyuan area yesterday yielded a less-than-satisfactory outcome, liquidating NT$73.4 million out of deals with a minimum asking price of NT$350 million in total.
Only eight deals were closed among the 22 units up for auction, priced between NT$2.51 million and NT$100 million, with a 36 percent closing rate, according to the auction's organizer, DTZ Debenham Tie Leung International Property Advisers (
"The asking prices of those non-performing collateral set by banks are too high to attract buyers," DTZ general manager Billy Yen (
Among the eight deals that were closed, three were closed at their asking price, which were NT$12 million, NT$16.8 million and NT$6 million.
Those prices were between 27 percent and 41 percent lower than the market price.
One reason for the small number of sales was that the quality of some of the non-performing collateral was unattractive, Yen said.
But he expressed satisfaction with the auction, saying it was good enough for a trial run.
"Bidders were very zealous in putting down their bids, which heated up the auction," he said.
A total of 32 bidders showed up yesterday.
Another real estate broker was bullish about the commercial property market, saying that rentals have hit their lowest point.
"Rentals of office buildings [in Taipei] have bottomed out and begun to gain momentum to re-bound," Cynthia Chu (
She said that monthly rentals of premium office buildings in Taipei's five major commercial districts averaged NT$2,100 per ping.
"The rental fluctuation has stabilized and may gradually rise by the year's end," Chu said, adding that rentals are unlikely to drop any more.
Store rentals in Taipei's six major shopping districts are also on the rise depending on the locations.
"Rentals of stores located at Chunghsiao East Road Section 4 have soared to NT$14,000 per ping per month," Chu said.
Factory and office complexes are also popular in the greater Taipei area than elsewhere since prices fell from NT$1,700 in 1999 to the current NT$1,200 per ping, Chu said.
"Several foreign and local logistics enterprises are looking for plots that can house ware-houses up to 30,000 ping in size," she said.
Given the fact the demand is picking up and the prices remain low, there's little room for bargaining between buyers and sellers, Chu said, adding that many businesses, which leased their offices, may consider buying properties due to the low interest rates.
Chu expects the property market in the next few months may benefit sellers more than buyers.
The commercial property market is expected to benefit from the new Real Estate-backed Securitization Law (
Yen also said that the property market should recover soon since many asset management companies are getting ready to release deals by the year's end.
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