Taiwan commercial transaction volumes hit record highs in Q1

Total volumes surged 241% to USD1.5b during the quarter.

Overall market sentiment remained positive during the quarter, with the 2021 GDP growth forecast raised to 4.64%. According to Colliers, total transaction volumes for commercial property reached TWD44 billion (USD1.5 billion) in Q1, representing 241% YoY growth and the highest first quarter level on record. 

Office and industrial sectors remained the major market drivers on the back of expansion needs from manufacturers. The most important industrial hubs, Hsinchu and Taoyuan, enjoyed the growth momentum of key industries such as semiconductors and telecommunications. Shin Kong Life Insurance spent TWD5.64billion (USD195million) on Riant Plaza - a mixeduse complex in Hsinchu. 

Here’s more from Colliers:

En-bloc assets in the Taipei CBD remained the most desirable to investors, particularly those with redevelopment potential. Huang Hsiang Construction – a listed developer - reportedly acquired Sogo Department Store’s Dunnan branch building for TWD13billion (USD448million) through a share transfer, and Shin Kong Life Insurance purchased the China Development Financial Building for TWD9.3billion (USD320million) through public tender. Both buildings qualify for the urban renewal scheme for potential bonus floor area.

In March the government implemented a new round of property market cooling measures, including selective credit controls and higher real estate capital gains tax, directed mainly against residential property speculation. The tax revisions subject transactions with a holding period of less than five years to combined property taxes of 35 to 45 percent. The rate will fall to 20 percent after a property is held for longer than five years, meaning the impact of the change on mid- to long-term investors will be relatively limited. 

Given Taiwan’s solid fundamentals and robust economic outlook, commercial property market sentiment is expected to remain positive in the coming quarters. The office and industrial sectors remain the segments to watch.