Taiwan Real Estate Report 2016

Publisher Name :
Date: 05-Oct-2016
No. of pages: 53

BMI View: The brief Taiwan recession - ending in Q216 and resulting in a trade volumes slump for the

export-orientated nation - sent shockwaves through the economy, affecting foreign direct investment flows

and seeing domestic demand dwindle. As a result, the commercial real estate industry has been rather

dormant over the course of 2016, with only eight transactions recorded in the last six months. A return to

growth for Taiwan will bode well for the commercial real estate in the long term; however, prices are

expected to fall over the remainder of 2016 and pose risks to the industry in the short term.

The recent slowdown in Chinese economic growth has had a significant influence on Taiwan's exportdriven

economy, considering that China is Taiwan's largest export market, accounting for approximately

40% of total exports. A decline in demand from China saw Taiwanese exports encounter a 17-month slump,

which resulted in the Asian Tiger economy dipping into recession. As a result, Taiwan was sluggish over

H116, with lower global demand and potential fed rate hikes further dragging down on economic activity. A

recent return to growth in Q216 indicates the economy has emerged from recession, and will improve

sentiment over the long term; although pressures from insufficient domestic investment and lethargic export

growth will weigh on short-term growth potential, and drag on the commercial real estate industry.

Taipei is Taiwan's capital and maintains central investment focus for commercial real estate in the country.

We attribute this to the robust economy here, where tourism is growing rapidly, consumers are spending

more and companies continue to seek space for establishment. There is a robust retail market in Taiwan, and

consistent demand from new companies maintains a healthy office sub-sector. Industrial establishments are

usually located in close proximity to the city and an efficient infrastructure system allows for easy access to

key areas of Taipei.

Concerning the commercial real estate sub-sectors, the uncertain economic condition has had implications

for the Office and Retail commercial real estate sub-sectors, where subdued domestic demand and reduced

foreign investor sentiment have brought about a drought in market activity. However, Taipei's reputation for

business is renowned across the globe, with growing tourism and a transition into a tertiary-based economy

aiding future prospects for commercial real estate growth and demand. Rentals are high in Taiwan and some

companies have moved into secondary locations to reduce costs, which we anticipate will restrict further

rental growth. Although, as the economy continues with a tentative recovery, we expect to see demand rise

again; offering opportunities as there is currently a lack of supply.

Taiwan Real Estate Report 2016

Table of Contents

BMI Industry View 7
SWOT 9
Political 11
Economic 12
Operational Risk 13
Industry Forecast 15
Office Real Estate Forecast 15
Table: Taiwan Office Rental Rates 18
Table: Taipei's Office Yields, 2011-2020 (%) 18
Retail Real Estate Forecast 19
Table: Taiwan Retail Rental Rates 22
Table: Taipei's Retail Yields, 2011-2020 (%) 22
Industrial Real Estate Forecast 23
Table: Taiwan Industrial Rental Rates 26
Table: Taipei's Industrial Yields, 2011-2020 (%) 26
Residential/NonResidential Building - Outlook And Overview 27
Table: Residential and Non-Residential Building Industry Data (Taiwan 2015-2025) 27
Table: Top Construction And Social Infrastructure Projects 32
Macroeconomic Forecasts 33
Economic Analysis 33
Industry Risk/Reward Index 38
Table: Asia Pacific Real Estate Risk/Reward Index 38
Rewards 38
Risks 39
Market Overview 40
Competitive Landscape 42
Demographic Forecast 44
Table: Population Headline Indicators (Taiwan 1990-2025) 45
Table: Key Population Ratios (Taiwan 1990-2025) 45
Table: Urban/Rural Population & Life Expectancy (Taiwan 1990-2025) 46
Table: Population By Age Group (Taiwan 1990-2025) 46
Table: Population By Age Group % (Taiwan 1990-2025) 47
Methodology 49
Industry Forecast Methodology 49
Sources 50
Risk/Reward Index Methodology 51
Table: Real Estate Risk/Reward Index Indicators 52
Table: Weighting Of Indicators 53

List of Tables

Table: Taiwan Office Rental Rates
Table: Taipei's Office Yields, 2011-2020 (%)
Table: Taiwan Retail Rental Rates
Table: Taipei's Retail Yields, 2011-2020 (%)
Table: Taiwan Industrial Rental Rates
Table: Taipei's Industrial Yields, 2011-2020 (%)
Table: Residential and Non-Residential Building Industry Data (Taiwan 2015-2025)
Table: Top Construction And Social Infrastructure Projects
Table: Asia Pacific Real Estate Risk/Reward Index
Table: Population Headline Indicators (Taiwan 1990-2025)
Table: Key Population Ratios (Taiwan 1990-2025)
Table: Urban/Rural Population & Life Expectancy (Taiwan 1990-2025)
Table: Population By Age Group (Taiwan 1990-2025)
Table: Population By Age Group % (Taiwan 1990-2025)
Table: Real Estate Risk/Reward Index Indicators
Table: Weighting Of Indicators
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