Taiwan was ranked the world’s 15th most active nation in commercial property transactions last year, rising three notches from a year earlier, as the investment needs of domestic life insurance companies pushed the trading volume to a record high, Jones Lang LaSalle (仲量聯行) said yesterday.
The international real-estate consultancy said it expected the boom to extend into this year as life insurance firms are eager for more properties with rental incomes in popular locations.
“The rise in ranking indicates investor confidence in commercial property remains strong, although the European debt crisis is dampening the global economy,” Jones Lang LaSalle Taipei managing director Tony Chao (趙正義) said.
Commercial property transactions totaled NT$120 billion (US$4.06 billion), the highest since Taiwan allowed foreign investors to own stake in the local market in 2002, the company said in a report.
The figure is likely to stay above the NT$100 billion level this year on sustained asset allocation demand, Chao said.
On Monday, land developer Huang Hsiang Construction Co (皇翔建設) outbid Fubon Life Insurance Co (富邦人壽) for a 50-year leasehold to develop a plot of land near Taipei City’s Shilin Night Market.
The next day, financially troubled home appliances maker Taiwan Kolin Co (歌林) auctioned off three properties with generous premiums.
Global commercial property trading jumped 28 percent to US$410.6 billion last year compared with 2010, the Jones Lang LaSalle report showed.
Cross-border transactions accounted for 31 percent, up 4 percent from the year-ago level, the report found.
The US topped the country ranking last year, followed by the UK, Germany and France, the report said, adding that London topped the city rankings, trailed by New York, Paris, Tokyo and Singapore.
Foreign investors’ penchant for Tokyo property prompted Japanese construction firm Bans Group to hold a three-day roadshow in Taiwan to pitch for new apartment units in the Japanese municipality.
Residential properties may generate at least 5 percent returns, higher than the 2 percent for Taipei’s properties, Bans Group said.
Housing prices in Tokyo are bottoming out, while Taipei home prices are expected to fall after a series of unfavorable government policies chilled transactions, the Japanese firm said.
Rents in Tokyo have moved in the opposite direction from house prices in recent years because of scarce supply for single-member households and inflows of foreign workers, Bans Group said.
Single-member households are estimated at 2.5 million in Tokyo, accounting for 40 percent of the metropolitan’s overall households, it said.
The figures lend support for ownership of small apartments as a fixed-income investment tool, Bans Group said.