Sat, Jan 27, 2007 - Page 12 News List

CBRE optimistic about real estate

By Jessie Ho  /  STAFF REPORTER

After a bumper year, the local real estate market is set to keep rising this year, buoyed by the anticipated opening of direct transportation links with China, a leading property agent said.

"We are optimistic about all four sectors [office, housing, retail and industrial markets] this year," Hong Van (雲惟鴻), managing director of CB Richard Ellis Ltd's (CBRE) Taiwan branch, told a press conference yesterday.

Low pricing, low interest rates and low incremental land-value tax were the main factors driving Taiwan's property market last year, Van said.

He added that the momentum would continue this year, as investors were likely to rush into the market before the prices shoot up as a result of the opening of direct transportation links with China, while the government could even allow Chinese investment in the property market.

Investment in commercial real estate jumped from NT$91 billion (US$2.8 billion) in 2005 to NT$130 billion last year, said Kristy Huang (黃郁琪), director of CBRE Taiwan's institutional investment properties division.

Foreign investors have been showing an interest in the local market and are inclined toward long-term investment, Huang said.

Top foreign investment

One of last year's most prominent investments was by CLSA Ltd, which bought Asia Plaza, a three-building complex in Taipei's Neihu district, at NT$7 billion, marking the highest foreign investment in the nation's real estate market, Huang said.

In the office market, the take-up of Grade A office space in Taipei City rose significantly last year, driven by strong demand, which increased in line with the recovering economy, said Adam Rosenfeld, associate director of CBRE Taiwan's office services division.

Taipei 101, for example, has leased out more than 70 percent of its office space, he said.

The high take-up, as well as the tightening supply, will drive up the rent this year, Rosenfeld said.

Last year, the average monthly rent of Grade A office space in Taipei City rose by 3.1 percent to NT$2,295 per ping (3.3m2), with space in the city's Xinyi District reaching the highest level of NT$2,401 per ping, he said.

The vacancy rate is expected to drop from 15 percent last year to 10 percent this year, Rosenfeld added.

As the storm of credit abuse is expected to abate, retailers such as department stores, hypermarkets and home furnishing retailers are expected to expand their stores this year, which would push up the market for retail leasing, said Fred Chang (張硯斌), senior manager of CBRE Taiwan's retail services division.

The number of large retail stores such as Carrefour Corp Taiwan and IKEA should increase slightly this year, and would keep rising if more Chinese tourists are allowed to visit the country, he said.

High-speed rail

Prices of residential properties close to terminals of the new high-speed rail system will boom, said Raymond Lin (林宗憲), senior manager at CBRE Taiwan's consulting department.

With a comparatively short distance from metropolitan Taipei and much lower property prices, high-quality residences in Taichung are in a good position to attract more people to settle in central Taiwan, Lin said.

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