Taiwan commercial deals seen surging

PUBLISHED : Thursday, 03 October, 2013, 12:00am
UPDATED : Thursday, 03 October, 2013, 5:13pm

Commercial property and land deals in Taiwan will probably surge in the fourth quarter after the government lifted some restrictions on insurers' property investment, according to the world's two biggest commercial realtors.

Investments in offices and shops on the island would rise to as much as NT$40 billion (HK$10.5 billion) in the next three months, said Tony Chao, Taipei-based managing director at Jones Lang LaSalle. That compared with NT$24.2 billion in deals in the third quarter, CBRE said.

The Financial Supervisory Commission in August lifted some restrictions including the ban on buying commercial real estate by insurers with financial irregularities. It kept some of the measures implemented in November last year to control office prices, including asking insurers to avoid investing in properties with an annual yield below 2.875 per cent.

"You have 10 months of pent-up demand," said Joseph Lin, Taiwan-based managing director for CBRE. "We're expecting a lot of money to be spent in the fourth quarter."

The value of transactions, including land changing hands, would rise to more than NT$80 billion this quarter, CBRE said. For the full year, investors would probably buy about NT$250 billion, compared with NT$300 billion last year, the US-based property firm said.

Before the ban last year, Taiwan's insurance companies accounted for about 40 per cent of commercial real estate transactions, Lin said.

Cathay Life Insurance and Shin Kong Life Insurance are among insurers that had their ban on property investment lifted this year. The government also said it would allow insurers to invest in overseas property markets this year.