Commercial real-estate sales more than halved in Q3

By Crystal Hsu  /  Staff reporter

Thu, Oct 03, 2013 - Page 13

Commercial property transactions sank by more than 50 percent year-on-year last quarter, weighed by lingering uncertainty about the global economy and US quantitative easing, international property agencies said yesterday.

However, the market may regain some vigor this quarter, when the government and large companies are slated to auction superfices rights and office buildings in prime locations, they said.

Commercial property deals totaled NT$21.5 billion (US$726.11 million) during the July-to-September period, down 61 percent from the same period last year, with major deals including Nan Shan Life Insurance Co (南山人壽) acquiring an office building in Greater Taichung from China Metal Products Group (勤美建設) and Transglobe Life Insurance Inc (全球人壽) winning a 50-year superfices right in Yilan County’s Jiaosi Township (礁溪).

Last quarter’s figure still represented a 35 percent pickup from the second quarter, Jones Lang LaSalle said yesterday.

Data compiled by CBRE Taiwan, the local unit of the leading US real-estate service provider, show a higher transaction volume of NT$24.2 billion last quarter, although that was half the level of last year.

“The weak sentiment we saw during the first half [of the year] extended into the third quarter,” Jones Lang LaSalle Taiwan managing director Tony Chao (趙正義) told a media briefing.

While the Financial Supervisory Commission last month removed its ban on property investments by domestic life insurers, the requirement that they must offer a yield of 2.875 percent still capped the number of transactions, given the soaring property prices in Taipei, Chao said.

The market may recover some vitality this quarter, with no major disruptions in sight, while borrowing costs remain ultra-low, CBRE and Jones Lang LaSalle said, adding that the planned sales of landmark buildings should arouse keen buying interest going forward.

CTBC Financial Holding Co (中信金控) and Elitegroup Computer Systems Co (精英電腦) have announced plans to sell their headquarters in Taipei’s Xinyi District (信義) and Neihu District (內湖) respectively.

Additionally, the government is due to auction a 70-year lease for developing a more than 4,000 ping (13,200m2) plot on Dunhua North Road in Taipei.

The plot has a floor price of NT$11.44 billion, which translates into NT$2.82 million per ping, government data showed.

“The competition for superfices rights should inject some badly needed vigor to the commercial property market and allow the government to revitalize idle assets with private funds,” CBRE Taiwan managing director Joseph Lin (林俊銘) said.

Property transactions may reach between NT$30 billion and NT$40 billion this quarter, lifting full-year deals to NT$100 billion, Chao said.