Taiwan property investment volume hits second highest total on record

Investments reached USD2.42b in the first half of the year.

Despite the global economic uncertainty and an upswing in domestic COVID-19 cases, a Colliers report reveals Taiwan recorded real estate investment transactions of TWD31.8 billion (USD1.06 billion) in Q2. 

This brings H1 transaction volumes to TWD72.6 billion (USD2.42 billion), the second-highest total on record.

Here’s more from Colliers:

Investments in the office sector (including industrial-office) remained strong in Q2, with deals totalling TWD21.1 billion (USD703 million), or 66% of the total transaction value. Occupier buyers remained active - a trend attributed to the continued strength of the hi-tech export sector.

And with the Taipei market continuing to experience limited supply, we saw an increasing number of transactions take place in secondary cities, such as Hsinchu and Taichung, which accounted for onethird of the total transaction volume in H1.

Forecast 

In mid-June, Taiwan’s central bank raised its benchmark interest rate by 12.5 basis points to 1.5% to mitigate the impact of rising inflation, a global phenomenon. Accordingly, the hurdle rate for insurance companies was raised to 2.47%. With Taipei office rental yields struggling to meet the hurdle rate, investors are expected to shift their focus to markets and asset types with better yields, such as secondary cities and industrial/logistics assets.