(TAIPEI) Prime office rentals in Taiwan's capital Taipei could fall 5-10 per cent this year and the value of real estate across the island will likely shrink further due to a sluggish economy, property services company DTZ said yesterday.
Cloudy outlook: The value of real estate across Taiwan is expected to shrink further due to a sluggish economyListed companies that purchased land in Taipei after the third quarter of 2008 could also suffer a loss of about 20 per cent in the value of the real estate after Taiwan adopted new accounting rules on Jan 1.
'Things are looking very cloudy for the real estate sector right now, and the industry will have to decide whether or not they want to push prices down further,' said Billy Yen, general manager of DTZ's Taiwan unit. Office rentals in prime Taipei areas fell 2.26 per cent in the fourth quarter from the previous three months, logging the first decline since late 2004, as the global financial crisis sapped demand for high-end real estate.
An expected increase in the supply of office space and weakened demand could push rents down even further this year, Mr Yen said.
DTZ figures showed that the value of foreign investors' real estate investments fell to NT$19.9 billion (S$889.5 million) last year from NT$44.5 billion in 2007, and the company was 'even more conservative' on the sector's outlook for this year. -- Reuters
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