Taiwan Insights by Michael Tseng
In this article, Michael Tseng, CEO of REPro Knight Frank in Taiwan, shares his perspectives on the outlook for 2023 and offers advice on how to capitalise on opportunities.
2 minutes to read
Taiwan’s inflation and interest rate hikes have been relatively moderate compared to other markets, and with the gradual recovery from the pandemic consumption has also rebounded. Domestic demand, particularly in the tourism and retail sectors, has exceeded expectations.
Here are some bright sparks we anticipate in 2023, that investors and developers in the capital market should be aware of.
New trends in the office sector
There has been a trend of incorporating energy-efficient features into new office buildings due to the growing importance of ESG for office occupiers. These buildings, which often have green certifications, are in high demand due to a shortage of supply, making them very popular.
Industrial, warehouse and logistics
The demand for industrial real estate investment and self-use will continue to grow due to the high rate of return on these properties, and the recovery of consumer demand post-pandemic. Additionally, the "China Plus One" strategy, particularly in the healthcare and life sciences fields, is also driving demand for industrial real estate.
Diversification of land development
There are several factors that are likely to contribute to uncertainty in the housing market, including rising construction costs, changes in the interest rate cycle, and new policies aimed at stabilising housing prices. As a result, developers in the residential sector are expected to adopt various strategies to diversify risks, such as increasing the proportion of investment in the industrial and commercial sector, and cooperating with landlords, brand developers and public departments.
Trends for 2023
The hospitality, retail, and industrial sectors will be attractive investment opportunities this year. Meanwhile, the government is actively promoting urban renewal policies. It is recommended that investors align their decisions with these policies in order to create mutually beneficial outcomes.
Private wealth investors, who have a competitive advantage due to their large capital, are expected to continue to be active in the real estate capital market in 2023 despite the pressure of rising interest rates.
