Taiwanese developers aggressively seeking development sites amidst lockdowns

They acquired a total of NT$50.4b (approx. US$1.8b) worth of land in Q2.

Transaction volumes in the commercial property sector increased by 42% YoY to NT$24.7 billion in Q2/ 2021 and rose by 92% YoY to NT$74.3 billion in 1H/2021 which can be attributed to an active market in the first five months of the year, according to Savills. 

“As the implementation of a capital gains tax is approaching, investors are taking a wait-and-see attitude and so over 80% of deals concluded by owner occupiers this quarter. The technology industry continued to dominate the market accounting for 63% of the total.”

Here’s more from Savills:

In contrast to the cautious attitude of commercial property investors, developers are aggressively seeking development sites, acquiring a total of NT$50.4 billion worth of land in Q2, up 75% YoY. Despite the negative impact of the soft lockdown and the upcoming capital gains tax which will bring challenges to the residential market, developers seem very optimistic about the future. 

Highwealth Construction Crop and Cathy Real Estate Development, two leading construction companies, acquired land valued at over NT$23 billion and NT$6 billion in 1H/2021 respectively, above levels the firms posted in 2020. Land price growth has remained strong with Taichung, New Taipei City and Kaohsiung marked to be the most popular areas for developers. 

The momentum in the commercial property market might slow in the next quarter if the soft lockdown continues making site inspection and negotiation difficult. However, we have not yet seen a signifi cant risk of price correction, excepting retail shops, given the low interest rate environment and demand from technology end-users.