Boston, MA -- (SBWire) -- 03/21/2013 --BMI's Q213 Taiwan Real Estate report examines the commercial office, retail, industrial and construction segments throughout the state within the context of the country's vulnerable export-led economy. After a multi-year lull in activity, 2013 looks set to bring with it an increase in market dynamism.
With a focus on the principal city of Taipei, the report covers the rental market performance in terms of rates and yields over the past 18 months and examines how best to maximise returns in the commercial real estate market, while minimising investment risk and exploring the impact of growing Chinese interest in a relatively stagnant market. After fleeting optimism in 2012, we believe that Taiwan's economy is set to face further struggles, stemming primarily from deterioration in the high-tech segment of the market. Weak exports and a struggling construction sector are set to be the main drags on real estate growth. This, in turn, has the potential to depress performance in both the industrial and office sub-sectors of the real estate market, and any longer-term slowdown would adversely affect private consumption and thus the outlook for the retail sector.
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Our latest data collection covering full-year 2012 shows that the economic slowdown continues to have a tangible effect on the real estate market. Nevertheless, we believe that the construction industry will experience a re-invigoration starting in 2013, with an expected surge in contracted projects.
Key Points
- The renewed demand for housing and the increase in trade activity has given us cause to believe that construction activity in Taiwan could see a short-term recovery, despite our expectations of a deep economic slowdown in China, Taiwan's main trading partner, in 2013. We estimate that 2012 saw flat construction growth (compared to a previous forecast of 1.2%) and forecast it to recover modestly to 4.9% in 2013. Over the long term, we are growing increasingly concerned about Taiwan's demographic profile and the lack of progress with achieving greater economic integration with China. Both factors could create a dour investment climate for construction, and we have revised down our long-term forecasts to reflect this outlook.
- While we expect the recent rebound in Taiwan's economic activity to continue through Q412, we are less sanguine on the country's growth prospects going into 2013. Trade and investment activity are likely to remain subdued, as we hold a downcast take on most of the island's major source markets. Additionally, we highlight that unless the government stems an ongoing deterioration in the business environment, Taiwan will continue to be plagued by a dearth of foreign direct investment, which would in turn impede its structural growth prospects.
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New Market Research Report: Taiwan Real Estate Report Q2 2013
Fast Market Research recommends "Taiwan Real Estate Report Q2 2013" from Business Monitor International, now available