Taiwan's Industrial Real Estate's On A Roll

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“For both economic and political reasons, it’s getting harder and harder to operate in China,” says Jon Hodowany, JC Grand’s CEO and general manager. 

As many like JC Grand make their way back to manufacturing from Taiwan again, there are no points for guessing what that means for Taiwan's industrial real estate. 

What Pandemic?

Ever since the U.S.-China trade dispute began, industrial real estate appetite in Taiwan seems to be reaching insatiable levels. 

Per CBRE, the pandemic has hardly put a ding, let alone a dent, in the demand for industrial real estate. 

On the contrary, demand is surging amid a renaissance in Taiwanese manufacturing. Industrial property transactions rose 34.6% to a record NT$59.3 billion (USD2.1 billion) in the first half of 2021. 

Per Cushman and Wakefield, commercial property deals reached more than NT$105 billion in the first nine months of 2021, already surpassing the total for 2020. 

Land deals increased 15.8% to NT$77.5 billion, buoyed by demand for factories and office spaces.

Exports Shatter Records

Demand for Taiwan’s exports has been robust as orders have grown for 19 consecutive months. 

Per their Ministry of Economic Affairs, export orders for the first three quarters of 2021 hit a record USD481.6 billion, up 32.4% YoY and the steepest growth since 1988. 

Why Taiwan?

There are three core reasons.

• The impact of the U.S.-China trade dispute 
• The lack of enthusiasm in China for Taiwanese-owned facilities to keep operating there, and
• The inconsistent way that environmental standards are being applied

Is It All Good Going?

Not really. Taiwan’s finite resources are increasingly being stretched thin. 

To be sure, the government has been able to meet the needs of manufacturers for the short term, particularly those returning from China.

But serious questions remain about how Taiwan will address its core shortages of land, electricity, water, labour, professional talent, and Chinese fighter jets jaywalking with careless abandon all over their airspace.