After sales of two commercial buildings in Taipei last week yielded better-than-expected premiums, all eyes are now on another land auction in Taipei’s Xinyi District on April 16, which real estate consultancy firm DTZ (戴德梁行) said would likely realize a 15.6 percent premium.
“There is too much money competing for too few investment opportunities,” DTZ general manager Billy Yen (顏炳立) said yesterday, adding that growth momentum for office buildings and commercial properties with fixed rental incomes in good locations remained strong.
He estimated that the 911 ping (3,012m²) plot of land — plot D3 located close to Taipei 101 — could fetch NT$2.3 million (US$68,500) per ping, higher than its floor price of NT$1.83 billion, or about NT$2 million per ping.
Although sales of large-scale commercial properties totaled only NT$9.7 billion in the first quarter of this year — much lower than the quarterly average of NT$23.7 billion last year — Yen forecast that the commercial market would grow another NT$20 billion this quarter to total NT$30 billion in the first half of the year.
Most potential buyers would be cash-affluent domestic insurance companies rather than overseas buyers, who have mostly left Taiwan, he said.
Several commercial buildings in Taipei’s Neihu District (內湖) may also be put up for sale, although they may not be as attractive as top-tier properties in downtown Taipei, said Charlie Yang (楊長達), director of real estate appraisal for DTZ.
Yen said that was the main reason why Neihu’s vacant properties, totaling 110,000 ping in floor space, failed to be snapped up as owners refused to lower their floor prices.
He wasn’t upbeat about the residential property market, which he said had not hit bottom.
Investors should put their money into the rallying stock market rather than into the residential property market, which is still on a downward slope, he said.