The price of this market report covers 4 quarterly reports on this sector. This quarterly report will be downloadable instantly as a PDF document, with the 3 remaining reports delivered at regular intervals throughout the year.

Taiwan is particularly susceptible to a global economic slowdown through external demand dynamics. Our outlook on Taiwans main trading partners – China, the US and Japan – is already subdued in the short term and the countrys own economic data continues to paint an increasingly pessimistic outlook. After slipping into a technical recession in Q411, we believe that Taiwans economy is set to face further weakness, especially in the first half of 2012. Stemming primarily from a deterioration in the high-tech sector, we expect exports and investment weakness to be the main drags on growth. This, in turn, has the potential to depress the performance in both the industrial and office sub-sectors of the commercial real estate markets, and any longer-term slowdown would adversely affect private consumption and thus the outlook for the retail sector.

Nevertheless, our latest data collection show that an economic slowdown has not yet had a tangible effect on the real estate market, with only prime retail rents noting any form of year-on-year (y-o-y) contraction. In the short term, we anticipate a steady growth in rental rates across the market, and we will be watching the H112 data carefully for any further signs of a slowdown in the market.

Key Opportunities

- Stronger economic ties between Taiwan and mainland China are boosting the Taiwan commercial property market

- Political stability derived from the re-election of incumbent president Ma Ying-jeou and the victory of the Kuomintang (KMT) in the legislative elections provides opportunities in the business environment: for example, Germanys Volkswagen (VW) is reportedly reconsidering its abandoned plans to produce cars in Taiwan

Key Risks

- Another global economic slowdown, especially affecting China, the US and Japan, would weigh heavily on Taiwans export-heavy economy

- In spite of the low yield base, a marginal contraction was noted over 2011, which combined with the contraction in prime rental space for retail could signal a slowing of the market

Click for Report details:Taiwan Real Estate Report Q2 2012