Commercial real-estate deals remain resilient

Beth McCandry

LET’S WAIT:
Since it takes months to close commercial deals, it’s too early to say if the market has been hit by the virus outbreak, said James Ko of Sinyi Global

  • By Crystal Hsu / Staff Reporter

Commercial real estate transactions in Taiwan totaled NT $ 12.6 billion (US $ 456 million) last month, showing resilience despite a local COVID-19 outbreak as the country’s solid economy supported the transactions, an on Report published Friday by Sinyi Global Management Co (信義 全球 資產)).

It takes several months to prepare, evaluate and close commercial property deals, making them less prone to the local outbreak that has nearly paralyzed private consumption, said James Ko (柯宏安), general manager of Sinyi Global, in the report.

“The demonstrations in May reflect what was going on a few months ago, so it’s too early to conclude that the commercial property market is immune to the outbreak,” Ko said.

Taiwan’s exports rose to a record $ 37.4 billion last month, with shipments in all product categories growing rapidly thanks to strong inventory demand fueled by expectations of a global economic recovery.

As long as economic fundamentals stay healthy, he will maintain a positive outlook for commercial real estate transactions, Ko said.

The market would continue to benefit from Taiwanese companies moving some of their production lines home from China to avoid U.S.-China trade tensions, Ko said, adding that excessive liquidity and low interest rates provide additional incentives.

There were nine real estate transactions totaling NT $ 15 billion last month, another sign that the market has remained stable despite some companies and government agencies postponing real estate auctions, he said.

The outbreak has supported demand for online shopping, warehousing and logistics services, Ko said, adding that trends would be reflected in demand for commercial property.

The demand for office space could be halted in the short term as companies review their physical office needs as well as their office layout to meet social distancing requirements, Ko said.

A growing number of companies are of the opinion that it is better for employees to work in different locations to keep operations running smoothly in the event of a COVID-19 infection, he said.

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