Taiwan Commercial Real Estate Hits Record High on Tech Demand, Land Market Cools

Taiwan's commercial real estate market has surged to a record NT$152.8 billion in the first half of 2024, fueled by robust demand from the technology sector. This figure surpasses the total annual transaction volume for the past 17 years since 2007, highlighting a significant shift in the market.

The industrial and technology sectors are now the primary drivers, with factories and warehouses alone accounting for NT$125.2 billion, or 82% of all commercial property deals. Tech companies, including Micron, ASE Group, Taimideh, and King Yuan Electronics, were the biggest buyers, investing NT$121.6 billion, approximately 80% of the total commercial transactions. This surge reflects their urgent need for self-use facilities and expansion plans.

The prime locations for these transactions were concentrated along the tech industry corridor in Taoyuan, Hsinchu, and Miaoli, which saw NT$87.9 billion in deals, nearly 60% of the national total. Tainan followed with NT$32.9 billion, and Taipei with NT$17.2 billion.

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Commercial property buyers have clearly shifted from traditional commercial assets to industrial and technology industry demand-oriented ones.

In stark contrast, the land market experienced a downturn, with second-quarter transactions totaling only NT$17.1 billion. This slowdown is attributed to a lack of self-use buyers and a general cautiousness among developers amid an uncertain economic climate. Developers remained the largest buyers of land, investing NT$28 billion, followed by manufacturing corporations for self-use purposes, totaling NT$26.7 billion.

Looking ahead, Colliers International anticipates continued strength in industrial property demand, driven by the southward expansion of the tech industry and supply chain restructuring. While interest rate and property control policies remain stable, the market's momentum will largely depend on self-use buyers, as institutional investors like insurance companies are expected to maintain cautious investment strategies.

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The market momentum will mainly rely on self-use buyers, and as the technology industry expands from north to south, driving supply chain restructuring and spatial demand transfer, industrial real estate buying is expected to remain strong.