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Taiwan Real Estate Report Q1 2011


Taiwan Real Estate Report Q1 2011

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Additional Information
Price $530.00
Meta Description No
Publisher Business Monitor International
Date of Report Aug 1, 2011
Quick Overview
The fortunes of Taiwan’s commercial real estate sector remain leveraged to those of the IT sector and tothe economy of mainland China. Unfortunately, the likely deceleration in China’s economy is coming at a
time when there is a glut of space in Taipei – especially in the retail and industrial sub-sectors.Over the course of 2009, there was a sharp fall in rental rates, and an even greater rise in yields. It appearsthat the protagonists in the real estate market have adjusted their expectations. Over the next five years,most of the investment returns will come from income, rather than from capital growth.
The good news is that most of the adjustment has taken place. When we interviewed them for the secondtime in July 2010, our in-country sources indicated that rents, yields (and, therefore, capital values) hadremained broadly stable since the end of 2009.
The massive Gate of Taipei project will add 2-3mn sq m of new, top quality, space to the office and retailsub-sectors. Our in-country sources are confident that it will cause overall rental rates (and, we wouldpresume, prices and capital values) to increase. However, it may cause the already fairly high vacancyrates to grow in older and less glamorous premises.
For the time being, we continue to expect that yields will generally track sideways in all three sub-sectors.Increases in rental rates will, in general, be met with corresponding rises in prices and capital values.
Table of Contents
Executive Summary ........................................................................................................................................ 5
SWOT Analysis ................................................................................................................................................ 6
Taiwan Real Estate/Construction SWOT .............................................................................................................................................................. 6
Taiwan Economic SWOT ...................................................................................................................................................................................... 7
Taiwan Business Environment SWOT ................................................................................................................................................................... 8
Regional Real Estate Overview ....................................................................................................................... 9
Table: Asia Pacific’s Office Markets At A Glance – Rents, 2009-2011 (US$ per square metre per month) .......................................................... 9
Table: Asia Pacific’s Retail Markets At A Glance – Rents, 2009-2011 (US$ per square metre per month) ......................................................... 11
Table: Asia Pacific’s Industrial Markets At A Glance – Rents, 2009-2011 (US$ per square metre per month)................................................... 13
Real Estate Market Overview ........................................................................................................................ 15
Taiwan Real Estate Markets – Rentals in m²/month, 2008 And 2009 (US$) ........................................................................................................ 16
Taiwan Real Estate Markets – Net Yield (%) ...................................................................................................................................................... 16
Taiwan Real Estate Markets – Terms of Contract/Lease .................................................................................................................................... 16
Taiwan Real Estate Markets – Available Space (m²) and Vacant Space (%) ....................................................................................................... 17
Industry Forecast Scenario ........................................................................................................................... 18
Real Estate Outlook ............................................................................................................................................................................................ 18
Taiwan Real Estate Markets – Rentals in m²/month (US$) ................................................................................................................................. 19
Taiwan Real Estate Markets – Forecast Net Yield, 2009-2015 (%) ..................................................................................................................... 20
Taiwan’s Construction Industry Outlook ............................................................................................................................................................ 20
Table: Construction And Infrastructure Industry Data, 2007-2017 ..................................................................................................................... 20
Macroeconomic Forecast ................................................................................................................................................................................... 23
Table: Taiwan – Economic Activity, 2007-2015 ................................................................................................................................................. 25
Business Environment ................................................................................................................................. 26
Real Estate/Construction Business Environment Ratings ................................................................................................................................... 26
Table: Asia Real Estate/Construction Business Environment Ratings ................................................................................................................. 26
Taiwan’s RECBER .............................................................................................................................................................................................. 27
Project Finance Ratings: Outlook For Asia Pacific ............................................................................................................................................ 28
Table: Design And Construction Rating ............................................................................................................................................................. 30
Table: Commissioning And Operating Rating .................................................................................................................................................... 31
Table: Overall Project Finance Rating ............................................................................................................................................................... 32
Taiwan’s Business Environment ......................................................................................................................................................................... 33
Table: BMI Business And Operational Risk Ratings ........................................................................................................................................... 33
Table: BMI Legal Framework Ratings ............................................................................................................................................................... 35
Table: Labour Force Quality .............................................................................................................................................................................. 38
Table: Annual FDI Inflows Into Asia, 2006-2008 ............................................................................................................................................... 41
Table: Top Export Destinations, 2001-2008 (US$mn) ........................................................................................................................................ 42
Table: BMI Trade Ratings .................................................................................................................................................................................. 43
Operational Risk ................................................................................................................................................................................................. 44
Company Profiles .......................................................................................................................................... 45
BES Engineering Corporation ............................................................................................................................................................................ 45
Cathay Real Estate Development Company ........................................................................................................................................................ 46
Farglory Land Development ............................................................................................................................................................................... 47
Huaku Development ............................................................................................................................................................................................ 48
Huang Hsiang Construction Corporation ........................................................................................................................................................... 49
BMI Methodology .......................................................................................................................................... 50
How We Generate Our Industry Forecasts ......................................................................................................................................................... 50
Construction Industry ......................................................................................................................................................................................... 51
Bank Lending ...................................................................................................................................................................................................... 52
Real Estate/Construction Business Environment Rating ..................................................................................................................................... 52
Table: Weighting Of Indicators .......................................................................................................................................................................... 53
Project Finance Ratings Indicators .................................................................................................................................................................... 55
Table: Design And Construction Phase .............................................................................................................................................................. 55
Table: Commissioning And Operating Phase – Commercial Construction ......................................................................................................... 56
Table: Commissioning And Operating Phase – Energy And Utilities .................................................................................................................. 57
Table: Commissioning And Operating Phase – Transport .................................................................................................................................. 58
Sources ............................................................................................................................................................................................................... 59




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