DTZ Research PROPERTY TIMES Office buildings converted into hotels Taipei Q2 2015 This quarter, grade A office rental remained stable in most projects, but new buildings nudged the citywide average rent up to NT$2,490 (US$83) per ping per month. The completion of Union Recreation Building raised the vacancy rate by 0.9 17 July 2015 percentage points to 9.8%. Due to strong demand from tourism, many old office buildings are being converted into hotels. Contents In the industrial sector, because of limited new supply and easy access by public Economic overview 2 transport, vacancy rate in the Xihu Section held steady at a low level. Tenants Office 3 requiring large areas or whole buildings for headquarters purposes had to search in Wende and Jiuzhong sections. Rental is expected to continue to rise in Xihu Retail 4 Section, but will remain flat in Wende and Jiuzhong. Industrial 5 The outflows of real estate investment by insurance companies and property tax Investment 6 reforms kept the market on edge. The investment volume in Q2, excluding land transactions, had a steep dip to the third lowest point since the financial crisis of 2008. The market slowdown is expected to have an impact on the already low transaction volume later this year. Figure 1 DTZ office index (2006 – 2016F) Author 250 Wendy Hsueh 200 Head of Taipei Research +886 2 8788 3288 150
[email protected] 100 Contacts 50 Andrew Ness 2015F 0 2016F 2005 2007 2008 2009 2010 2012 2013 2006 2011 2014 Head of Greater China Research +852 2507 0779
[email protected] Office Rent Index Office Price Index F=Forecast Fergus Hicks Source: DTZ Research Global Head of Forecasting +44 (0)20 3296 2307
[email protected] www.dtz.com Property Times 1 Taipei Q2 2015 Economic overview Table 1 Taiwan's GDP in Q1 2015 increased by 3.37% year-on-year (y- Economic indicators o-y) to NT$4,131.39 billion (US$130.8bn) (Table 1).