Taiwan commercial property transaction volumes reach USD1.25b in Q1

This is the second highest Q1 volume on record.

Taiwan’s total property transaction volume hit TWD36.3 billion (USD1.25 billion) in Q1 2022, driven by large commercial property deals. This is the second highest Q1 transaction volume on record.

According to Colliers’ data, office (including industrial office) assets contributed 63% of the Q1 transaction value. Insurance companies and manufacturers were the most active buyers, contributing 61% and 32% of the total transaction value, respectively. 

Here’s more from Colliers:

With Taipei’s en-bloc office assets being tightly held, institutional investors broadened their search to secondary cities - such as Taichung City and Hsinchu City - with solid industry fundamentals and better rental yields. 

For instance, China Life Insurance spent TWD12 billion (USD416 million) on an office building in Taichung’s CBD while Transglobe Life Insurance purchased Ambassador Hotel Hsinchu for TWD5.8 billion (USD200 million).

Looking ahead, we expect investors to increase the proportion of income-producing properties in their portfolios to hedge against inflation. Office and industrial properties will remain the most sought-after sectors thanks to historically low vacancy rates and robust exports, respectively. 

In March, the central bank increased the interest rate for the first time in over a decade. The hurdle yield for insurance companies has been raised from 2.095% to 2.345% accordingly. Therefore, investors may be keen to invest in secondary cities that offer higher rental yields, or alternative asset classes, such as industrial offices, logistic centres and data centres.