Commercial property transactions totaled NT$9.1 billion (US$292.9 million) in the second quarter, falling 69 percent from a year earlier and 24 percent from the first quarter, as a new property tax weighed on the market, brokers said yesterday.
“The property market apparently has yet to hit bottom, although the new property tax has settled,” said Gordon Kao (高銘頂), general manager at Savills Taiwan Ltd, the local branch of a British property consultancy.
Kao voiced concern that the local commercial property market could further deteriorate with the impending imposition of new income taxes on property gains starting next year.
The new integrated house and land sales tax requires foreign property investors to pay income taxes of between 35 and 45 percent on gains from property transactions, depending on the length of holding period, much higher than that in Japan, Hong Kong, the UK and Australia, Kao said.
The heavy tax burden could make commercial properties in Taiwan less attractive and the local market could become increasingly marginalized, Kao said, adding that soaring property prices have already squeezed rental yields.
As a result, self-occupancy purchases drove transactions during the April-to-June period, with factory office and buildings accounting for 85 percent of total transactions, Savills Taiwan said.
Advanced Semiconductor Engineering Inc (ASE, 日月光半導體), the world’s largest chip testing and packaging service provider, acquired a new factory from an affiliated developer for NT$2.47 billion (US$79.5 million), making it the largest property deal last quarter.
Domestic life insurers, the major players for commercial properties, stayed on the sidelines, constrained by the minimum yield requirement of 2.875 percent, Savills Taiwan said.
The only exception was China Life Insurance Co’s (中國人壽) purchase of factory space in Taipei’s Nangang District (南港) for NT$460 million, the broker said.
China Life’s peers, such as Shin Kong Life Insurance Co (新光人壽) and Nan Shan Life Insurance Co (南山人壽), opted to buy undeveloped plots of land that are to be turned into office space.
Buying interest for office space remained low last quarter, as companies chose to lease rather than own, given high prices and risks that they could take a downturn going forward, said CB Richard Ellis Ltd (CBRE) Taiwan, the local office of a US property consultancy.
Commercial property transactions could retreat below the NT$60 billion level this year, the lowest since the global financial crisis in 2008, CBRE Taiwan managing director Joseph Lin (林俊銘) said.
On the other hand, property fund outflows might accelerate in the second half after hitting NT$42.7 billion in the first half, Lin said.
WASHINGTON’S INCENTIVES: The CHIPS Act set aside US$39 billion in direct grants to persuade the world’s top semiconductor companies to make chips on US soil The US plans to award more than US$6 billion to Samsung Electronics Co, helping the chipmaker expand beyond a project in Texas it has already announced, people familiar with the matter said. The money from the 2022 CHIPS and Science Act would be one of several major awards that the US Department of Commerce is expected to announce in the coming weeks, including a grant of more than US$5 billion to Samsung’s rival, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), people familiar with the plans said. The people spoke on condition of anonymity in advance of the official announcements. The federal funding for
HIGH DEMAND: The firm has strong capabilities of providing key components including liquid cooling technology needed for AI servers, chairman Young Liu said Hon Hai Precision Industry Co (鴻海精密) yesterday revised its revenue outlook for this year to “significant” growth from a “neutral” view forecast five months ago, due to strong demand for artificial intelligence (AI) servers from cloud service providers. Hon Hai, a major assembler of iPhones that is also known as Foxconn, expects AI server revenues to soar more than 40 percent annually this year, chairman Young Liu (劉揚偉) told investors. The robust growth would uplift revenue contribution from AI servers to 40 percent of the company’s overall server revenue this year, from 30 percent last year, Liu said. In the three-year period
LONG HAUL: Largan Energy Materials’ TNO-based lithium-ion batteries are expected to charge in five minutes and last about 20 years, far surpassing conventional technology Largan Precision Co (大立光) has formed a joint venture with the Industrial Technology Research Institute (ITRI, 工研院) to produce fast-charging, long-life lithium-ion batteries for electric vehicles, mobile electronics and electric storage units, the camera lens supplier for Apple Inc’s iPhones said yesterday. Largan Energy Materials Co (萬溢能源材料), established in January, is developing high-energy, fast-charging, long-life lithium-ion batteries using titanium niobium oxide (TNO) anodes, it said. TNO-based batteries can be fully charged in five minutes and have a lifespan of 20 years, a major advantage over the two to four hours of charging time needed for conventional graphite-anode-based batteries, Largan said in a
Taiwan is one of the first countries to benefit from the artificial intelligence (AI) boom, but because that is largely down to a single company it also represents a risk, former Google Taiwan managing director Chien Lee-feng (簡立峰) said at an AI forum in Taipei yesterday. Speaking at the forum on how generative AI can generate possibilities for all walks of life, Chien said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) — currently among the world’s 10 most-valuable companies due to continued optimism about AI — ensures Taiwan is one of the economies to benefit most from AI. “This is because AI is