Commercial real-estate sales booming in Q2: Savills

Taiwan's commercial real estate market experienced a significant surge in the second quarter of 2024, with transaction volumes for the first half of the year already matching the total for all of 2023. Driven primarily by the semiconductor and artificial intelligence sectors, factory acquisitions accounted for approximately 80 percent of all major deals during the period. This momentum underscores Taiwan's strengthening position as a global technology manufacturing hub and indicates a strategic shift toward industrial property expansion in central and southern regions.

According to data from Savills Taiwan Ltd, large-scale commercial real estate transactions exceeding NT$300 million reached NT$56.1 billion in the second quarter, bringing the first-half total to NT$159.1 billion. This rapid growth was fueled by technology firms expanding production capacity to meet global AI demand, with factory transactions alone reaching NT$130.3 billion in the first six months—nearly double the volume recorded for the entirety of the previous year. Savills Taiwan managing director Ricky Huang noted that fading geopolitical concerns in the Middle East have helped restore business confidence, leading to a concentrated appetite for industrial properties among owner-occupiers in the chip industry, who accounted for more than 90 percent of factory purchases.

ASE Technology Holding Co emerged as the dominant buyer in the second quarter, spearheading the four largest transactions with a total investment of NT$29 billion. Its subsidiary, Advanced Semiconductor Engineering Inc, completed a landmark NT$14.85 billion acquisition of an Innolux Corp facility in the Southern Taiwan Science Park. Furthermore, Siliconware Precision Industries Co (SPIL) secured multiple assets from HannsTouch Holdings Co and Hannstar Display Corp in Tainan and Hsinchu Science Park for a combined NT$13.6 billion. These massive acquisitions highlight a trend where major semiconductor players are securing existing facilities to rapidly scale operations, particularly in science parks where land and factory supply are increasingly sought after.

While industrial properties dominated the market, the office and industrial office sectors ranked as the second and third most active segments, totaling NT$5.75 billion and NT$3.87 billion respectively. Notable transactions included Nan Shan Life Insurance Co’s NT$3.55 billion purchase of pre-sale office space in Kaohsiung—the city's largest office deal on record—and ASRock Inc’s NT$3.53 billion acquisition of an industrial complex near Taipei’s Beitou-Shilin Technology Park. Despite the high volume of owner-occupier activity, Savills research manager Erin Ting observed that pure investment demand remains tempered by tighter financing conditions and a strong equity market, which continues to divert capital away from traditional real estate assets.