Commercial Real Estate, Taiwan s Opportunities Ahead / / /John. / /Allan

Transcription

1 Commercial Real Estate, Taiwan s Opportunities Ahead / / /John / /Allan Taiwan s property market has seen a large boom-up in the past few decades, and has become the No.1 choice for commercial investors. Its turnover and value-added efficiency have both become the silhouette of the island s economic scramble in the last century. These years, when Taiwan s markets are getting even more mature, its risk is also rising. Just like other developed nations in Asia, a more reasonable measure must be taken to ensure the healthy improvement of the economy. The economic advancement rate in Taiwan has steadily grown at 4~5%. International batch materials are still at very high prices, domestic inflation is also on the rise, there are pros and cons of the whole economic system. The Central Bank of Taiwan has executed a minor adjustment to the bank rates while the stock market is wakening up. Speculation investment is heating up as well. Although there are factors that are affected by both domestic and abroad, unbalanced development is setting an even higher risk to the market. It s estimated that this year (2008), Taiwan s economy will gradually run into a more steady development pace, which will be mainly indicated by stronger foreign investment and a more demanding domestic market, the supply and

2 demand curve will become clearer. The situation of Taiwan s Commercial Real Estate Speaking in Cash on Cash Return rate, it is 6~12% in the US, but according to data announced recently, its commercial property market, including class-a office buildings, its CoCR rate is 3~5%. Residential buildings are also 3~5%, shopping malls is a bit higher at 5~8%, same as restaurants. In the long term, commercial properties have a healthier and steady turnover, but never a speculated investment which will make someone a big fortune. The Risk of Taiwan s Property Market In general, the risk of commercial real estate is indicated as operational risk, which means the risk is decided by economic activities, the economic environment and other outside factors, it is also a problem that most financial investors should face. On the other hand, financial risks are indicated as capital shortage because of increased loan interests in the short run. Other risks also include flow risk (property products with a low flow rate), management risk (profitable property projects are devalued because of weak management skills), interest rate risk (since bank loans are normally long term, rise of interest rate will eventually become unaffordable), and political risk (investment on property is hard to avoid risks caused by factors such as tax-rises and political policy changes) ~5%

3 Business Property Cash on Cash Return 6~12% A 3~5% 3~5% 5~8%

4 Huff s Model

5 % / / % / / M A

6 ~4.0% REITs REITs REITs Emerging Trend in Real Estate Asia Pacific 2007 and 2008 Survey

7 90% 40~60 / 55~80 / /

8 Shop till You Drop Taipei is the capital of Taiwan and is worth a visit. A cherished part of the city is the popular Yangmingshan National Park. Other cities that are well visited are Taichung and the city full of industries that is called Kaohsiung. The streets of the Taiwan are clean and tidy and you are assured of spending a great time there. The locations that attract picture snapping tourists are the Central Cross- Island Highway, the Sun Moon Lake, the Jade Mountain, Hsitou's bamboo forest, the Kenting National Park. The attractions of this island are the historic temples, the wonderful beaches, coral reefs, the villages that are popular fishing destinations and many others. One activity that can t be missed and the sole reason for many travelers is the shopping. From mega-malls to street stalls, those who enjoy shopping can indulge themselves with the many wonders that Taipei has to offer. There are a large number of shopping centers located in Taipei alone. Some of these are huge mega-malls that would take more than a day to explore. Clothes, cosmetics, shoes, electrical products, toys, stationery goods, gadgets, trinkets, hats, cats and bats, you re sure to find it in a Taiwan mall. The rich and fancy can pick up the more expensive brands. The alternative option is even more vibrant, with entrepreneurs opening shops and stalls throughout the city, creating one of the largest selections of clothing in Asia for the day-to-day

9 shopper. Taiwan is a shopping haven that caters to people of different ages and tastes. Most tourists often leave without feeling disappointed. They also have a little extra weight in their suit case. To find woman s cloths or cloths stores in Taiwan, here is our advice. Pick up a map of Taipei. Throw a dart at it. Go where the dart lands. Have a happy shopping trip. Where to Shop in Taiwan The exquisite locales and a colorful heritage of Taiwan draw in millions of tourists every year. Scenic beauty however, is definitely not the only attraction of the island, and the tourists here delight in the unique shopping experience that Taiwan presents. Taiwan is in fact, a shopper's paradise and every city in the island has numerous shopping malls and alleys that sell a variety of national and international products. Taipei is especially famous for the host of options it presents to its shoppers. Taiwan has a number of world class malls that share numerous brands catering to every taste and need. Be it fashion, or daily needs, the shopping centers of Taiwan are an ideal destinations for buying or gazing through windows. Shopping in Taiwan has a different experience in the street side stores that fringe the alleys of the island. These stores are ever crowded with buyers bargaining for the best deal. The night markets of Taiwan are yet another exciting place to be in. Shopping in these markets are indeed fun, as the glaring neon signs and the delicious smells wafting from the wayside cafes create a different ambience altogether. Sogo Shopping Center Taiwan The Sogo Shopping Centre is ranked as one of Taiwan's major department stores if popularity and business are taken into account. The store in Taipei offers a wide range of options to its buyers who can take their pick from an array of local and international brands. It s a popular destination among the locals and tourists who come here for an exquisite shopping experience. The place is even more frequented due to its convenient location near the Fu Shing MRT Station. The Sogo Shopping Centre is a towering building with eighteen floors above the ground, a basement food court, and a three storey basement parking place. The building poses as a famous landmark of Taipei. Even the front court with

10 its outdoor seating arrangement, has become a popular place for hanging out. Sogo has a host of stores equipped with a collection that can satisfy any fashion freak. There are a number of restaurants and cafes in the basement to serve a variety of traditional and international dishes. Even office workers frequent the mall's food court for its food and wide variety of beer. Another major attraction in Sogo is its Entrance Plaza Clock, which draws crowds of watchers every hour as it chimes to the dancing dolls. Sogo has a smaller store a few blocks down the road. The main store has a special bus service which leaves every 10 minutes to take shoppers to the second store. Living Mall The structure incorporated a special spherical design spanning over 135,000 square-meters of shopping space, with over 15,000 square-meters of lawn surrounding the building. The fourth floor is a Broadway-themed music caf0, Elite books on the tenth floor, and Xland on the 12th floor all operate until 2am. Situated at the boundary of Hsin-yi District and Sung-shan District of Taipei City, Core Pacific City is built at the core of the urban center, surrounded by Keelung Road, Civil Boulevard, McArthur Highway and Chungshan Expressway to connect all points in the neighboring cities and counties. As such, it constitutes a convenient road network to provide easy access. It is12 stories high and has 7 underground levels that create an urban centric vertical Living Mall. Miramar Entertainment Park The Miramar Entertainment Park is a new-age shopping and entertainment complex built with the idea of offering enough consumption and entertainment options to keep visitors occupied for a full-day stay. The most striking feature of this park, which was opened only at the end of 2004, is a 95-meter-high, 70-meter-in-diameter Ferris wheel that lights up at night to add a strong touch of romance to the Taipei skyline. New York New York Shopping Center Designed with a futuristic theme in mind, this shopping center aims to provide the ultimate leisure palace while offering customers a one-stop for all their fashion needs. Many American brands set-up-shop in the New York, which attracts many locals for shopping or just to enjoy the mall experience. The New York New York Shopping Mall is easy to find, it has a 35ft Statue of Liberty at the entrance doors.

11 AsiaWorld Shopping Centre The Asiaworld Shopping Center is a shopper's paradise. Its range of products on offer range from electronics, fashion, silverware, jewellery... everything one can hope for. The decor is luxurious, grand, chic and embodies every quality of a first class shopping center. It s a must-see! This department store occupies eight floors of a vast building. All the main designer names are here, however, the men's clothing department is minimal. It is the other stores and restaurants within the AsiaWorld complex that make it a real stand-out. The lower basement of AsiaWorld contains a sensational food hall, catering to all tastes at a reasonable price. There is also a dry cleaner, fresh bread bakery, and on the top floor, a men's all-night sauna house.