New Business research report from Business Monitor International is now available from Fast Market Research

Boston, MA -- (SBWire) -- 12/21/2012 --BMI's Q113 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 the first few months of 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 the first six months of 2012 show that the economic slowdown is at last having a tangible effect on the real estate market, with five out of six key indicators registering a year-on-year contraction, according to our in-country sources. Nevertheless, we believe that the construction industry will experience a re-invigoration starting in 2013, with an expected surge in contracted projects.

Key Points

- Despite the contrasting picture painted by Taiwan's Q212 real GDP growth numbers, we believe the economy is set for further weakness in H212. We expect a contraction in exports and investments to be the main impediment to Taiwan's growth prospects for the year. Consequently, we have revised our real GDP growth estimates from 2.2% to 1.6% for 2012, which remains below government and consensus estimates of 2.1% and 2.4% respectively. Following expectations of a pickup in 2013, we are forecasting real GDP growth of 4.2%.
- The lack of construction activity in the second quarter of 2012 has prompted us to revise down our full-year forecasts for the sector to 1.2% (previously 2.7%). Although we had expected construction activity in Taiwan to remain relatively lacklustre in 2012, a deep economic slowdown in China - Taiwan's main trading partner - is creating an increasingly dour investment climate for construction.

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