Commercial property transactions last quarter totaled NT$12.9 billion (US$425.63 million), declining 60 percent from the same period last year, as buyers turned conservative amid the COVID-19 pandemic, the latest data released by property brokers showed.
Industrial properties accounted for 80 percent of transactions, followed by offices at NT$1.34 billion, Colliers International Taiwan (高力國際) said in a quarterly survey yesterday.
However, Cushman & Wakefield Taiwan (戴德梁行) data showed that overall deals totaled NT$9.51 billion, representing a 61 percent retreat.
“The market might see a panic sell-off if the outbreak persists beyond this quarter,” Cushman & Wakefield Taiwan general manager Billy Yen (顏炳立) told an online news briefing last week.
Yen compared the COVID-19 pandemic to a black swan that has not only sickened people worldwide, but also snapped an expected recovery for the local property market.
Sellers are struggling to stay afloat, while buyers are waiting for price corrections, Yen said, adding that both sides prefer to stay on the sidelines to see how the global health crisis pans out.
Pent-up demand could evolve into a protracted recession if the disease drives up business closures and pushes a large number of people out of work, he said.
Colliers Taiwan said the outbreak has prompted companies in the region to slow expansion plans, with the effects most evident at retail stores, hotels and restaurants.
Travel restrictions and “social distancing” recommendations make operating those establishments difficult, Colliers said.
Taiwan Taoyuan International Airport last month saw an average of between 2,000 and 3,000 passengers per day, a 90 percent decline from a year earlier, government data showed.
In February, restaurant sales shrank 30 percent year-on-year, while revenues at department stores tumbled 36 percent, defying cutthroat discounts to attract customers, Colliers said.
Land deals appeared unaffected by the virus, given record first-quarter volume of NT$84.2 billion.
The superficies right to regenerate the former site of the Taipei World Trade Center Exhibition Hall 3 in the prime Xinyi District (信義) made a substantial contribution of NT$31.28 billion.
Sharp competition for the lot from domestic life insurance companies reflected keen interest in regular rental income from properties in central business districts, Colliers said.
It would take several years for Nan Shan Life Insurance Co (南山人壽), which bought the rights, to develop the complex, which is next to Taipei 101.
A positive long-term profitability outlook also accounted for active land trading in Taipei’s second-tier Beitou (北投) and Nangang (南港) districts, as well as in Taichung, Colliers Taiwan said.
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