Commercial property transactions last quarter surged 88.9 percent year-on-year to NT$52.2 billion (US$1.68 billion), uplifted by the liquidation sales of buildings owned by a real-estate investment trust (REIT) fund, global commercial property broker Cushman & Wakefield Taiwan said yesterday.
The Shin Kong No. 1 REIT (新光一號) fund sold its six buildings in Taipei for NT$30.7 billion that accounted for 60 percent of the trading volume during the April-to-June quarter, the company said.
All six buildings generate regular rent incomes and therefore attracted institutional investment buyers, Cushman & Wakefield Taiwan said, adding that the market would put up a lackluster performance in the absence of the REIT deals.
Photo: Hsu Yi-ping, Taipei Times
The buildings saw their value grow threefold from NT$11.3 billion upon the fund’s launch in 2005, therefore encourage domestic REIT funds, which are not as popular as peers elsewhere, analysts said.
It is not clear at this juncture how much the beneficiaries would receive following the liquidation.
Industrial properties intended for self-occupancy made up the bulk of commercial property sales, Cushman & Wakefield said.
In the first half of this year, commercial property transactions held virtually steady from a year earlier.
At the same time, land deals amounted to NT$20 billion, higher than NT$16.3 billion in the preceding quarter, but the first-half sum of NT$36.3 billion marked the lowest since 2016, when the government introduced combined property tax to cool the market, the consultancy said.
The muted showing reflected conservative approach on the part of developers and builders in response to interest rate hikes, credit controls and unfavorable measures to ban presale house contract transfers, it said.
Developers and builders have some land stock on hand and would rather stay on the sidelines until the nation’s economic and political uncertainty settles, said Billy Yen (顏炳立), managing director at Cushman & Wakefield Taiwan.
Looking forward, the market is likely to see further transaction declines with stable prices, Yen said, adding that downside risks loom larger than upside surprises in the foreseeable future.
Taiwan is to elect new legislators and a president, and candidates tend to pledge measures to make house prices more affordable, he said.
Housing transactions this year would fall 240,000 to 250,000, suggesting little improvement in the second half, Yen said.
Still, developers and builders display keen interest in urban renewal and MRT joint development projects, as they do not require land plots and are not subjected to credit controls, Cushman & Wakefield Taiwan said.
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