Commercial property transactions would continue to grow this year after a strong showing last year, the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) said.
“Although the pace of GDP growth will slow to some extent this year, demand for office space in Taiwan is expected to remain in place to push transactions of commercial property higher,” TIER researcher Fang Chun-te (方俊德) said.
Transactions of offices, shops and factories last year reached NT$80.9 billion (US$2.63 billion), up 48.17 percent from NT$54.6 billion a year earlier, data released by commercial real-estate advisory firm Colliers International showed.
It was the first time in three years that commercial property transactions breached NT$80 billion, but the pace of growth might be less significant this year, it said.
Soaring commercial property transactions last year largely reflected strong demand for office space, particularly in Taipei, Fang said.
Only one commercial property transaction topped NT$10 billion last year — Formosa Plastics Group’s (台塑集團) NT$18.7 billion purchase of three office buildings in Taipei’s Neihu District (內湖) as its new headquarters, Collier data showed.
Sunny Bank (陽信銀行) purchased an office space in a listing of a presale property project on Zhongshan N Road for NT$7.65 billion, the data showed.
“As office space was in demand in Taipei, rents in the capital increased in 2018 and growth is expected to continue in 2019,” Fang said.
A total of 61,479 ping (203,237m2) of floor space was rented in the city at an average price of NT$1,868 per ping per month, the highest level in 10 years, Collier data showed.
Average rent for premium office space in Taiwan was about 39 percent higher than the overall average, the company said.
Due to a limited supply of new office space in Taipei over the next three years, average rent could top NT$1,900 per ping to set a new record, it said.
The manufacturing sector was the largest buyer of commercial property nationwide last year.
Manufacturers spent a total of NT$34.6 billion on property purchases, up 105 percent from a year earlier, accounting for 42.77 percent of total transactions, Collier said.
The financial sector was another major purchaser of commercial property, spending about NT$19.7 billion last year, up 85 percent from a year earlier and making up 24.35 percent of the total transactions, it said.
Sales value of land transactions reached NT$182.2 billion, the highest level in five years, as construction firms, financial and insurance companies, as well as manufacturers increased their land purchases, the company said.
Another factor driving the demand for land could be foreign direct investment, which has been increasing since 2016, fueled by relatively low costs — such as wages, land and utility — as well as the nation’s large pool of high-tech talent and robust technology supply chain, it said.
However, commercial property transactions this year are unlikely to increase as much as they did last year, due to slowing economic growth, Fang said.
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