Companies from various sectors are acquiring hotels drained of cash due to the COVID-19 pandemic to convert them into office spaces, apartments and workers’ dorms, property broker CBRE Taiwan said yesterday.
Several hotels have exited the market over the past two-and-a-half years, succumbing to business slowdowns as a result of COVID-19 border controls and social distancing restrictions, CBRE Taiwan said.
The Ministry of the Interior has offered tax relief and renovation subsidies to help some distressed hotels transform into temporary social housing, while others have sought to sell properties to generate cash flow, it said.
Photo: Hsu Yi-ping, Taipei Times
“It is wise to buy idle hotels and turn them into apartments for rent, as leasing demand has picked up in the past few years,” CBRE Taiwan said.
Lossmaking hotel properties provide ideal investment targets for companies in need of office and dorm space, as their floor plans often require fewer renovations, compared with fresh construction projects amid soaring land, building material and labor prices, it said.
The calculation led a beauty salon group to buy Royal Seasons Hotel (皇家季節酒店) in Taichung for NT$588 million (US$19.78 million) and a medical facility to purchase Chateau de Chine (翰品酒店) in Taoyuan for NT$1.18 billion, it said.
CBRE Taiwan advised local technology firms to consider the approach, as companies expand capacity in central and southern Taiwan, fueling a need for living spaces for workers.
Dorm complexes need to be no more than 15 to 20 minutes away from public transportation to shorten commute time for employees, the broker said, adding that transportation convenience would make hiring easier.
Taiwan Semiconductor Manufacturing Co (台積電), the world’s largest contract chipmaker, has built a dorm near the high-speed railway station in Tainan to accommodate foreign engineers working at its Tainan plants, it said.
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