Due to attractive rent reductions and tax incentives, around 90 percent of the office space in the NT$61 billion second phase of the Nankang Software Park (
The first of the three buildings in the recent expansion is already fully booked up, with the other two at between 90 and 96 percent, if the second floor public area is excluded. Only around 19 percent of the second floor is occupied at present.
"In the second phase of development at the park we not only sold offices as we did in the first phase, we also leased them," Ministry of Economic Affairs' Industrial Bureau Unit chief Kuo Chung-hsiung (
"Now 87.6 percent of the second phase property is already leased," said Kuo, who oversees development at the publicly financed but privately run park in suburban Taipei.
Incentives like the "6688 program" -- which offers a 40-percent discount off rents in the first two years of occupancy and 20 percent in the following two-year period -- may have been a key factor in filling up the new office blocks.
Leasing dollars can also be transferred to buying dollars so that companies can own their properties after renting for 20 years, Kuo said.
To promote research and development in Taiwan as traditional manufacturing industries move to cheaper areas in Asia, the government offers attractive rates to domestic and overseas companies, the ministry's Industrial Development Bureau Director-General Chen Chao-yi (陳昭義) said yesterday.
Research start-ups enjoy tax-free status in their first years of operation, and can claim between 20 and 50 percent reductions in later years. Engineers doing their two-year compulsory military service in Taiwan can also be asked to work in research firms free of charge.
International names that have bought into the second phase of the park include Sony, Advanced Micro Devices (AMD), Philips and IBM.
Nankang's phase two development is being touted as a technology "cluster," drawing together companies working in the key areas of software and computer-chip circuit design, digital entertainment and biotechnology.
Each of the three new buildings has been designated a cluster for these areas, with software concentrated in the first phase and the new circuit-design building.
"This area of Taipei is not appropriate for mass production factories as the land is very expensive," Chen said. "We thought about which industry was best here, and we decided on software [in the first phase] as output is not through labor, but brain power."
The park is now the most productive in Taiwan per square meter. By the end of next year, the 8.2 hectares of phases one and two combined are expected to produce revenues of NT$195 billion, Chen said, with only 13,000 employees and 260 companies.
One new cluster aims to nurture Taiwan's infant biotechnology industry.
"Thirty-five biotechnology companies have already applied for office space in Building F of the second phase which has been set aside for biotechnology firms," Jerry Chen (
"That's 90-percent occupancy with only 10 percent of the space left unfilled. This is an excellent result," he said.
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