Radar | Taiwan | 6 September 2023

2023 H1 Review on Taiwan’s

industrial properties
Insights & recommendations
70% transaction compared
a year ago
The demand for international trade has
been suppressed by many factors.
T w ’ xpo h v ow d dow , d
the YOY growth has been negative for 10
consecutive months. The economic
indicators and manufacturing PMI also
showed conservative, indicating that
manufacturers are still conservative in
short-term expansion. We expect the
transaction of industrial properties to be
flat this year.
YOY growth down to 10%
The sales volume of warehousing and
logistics industry, e-commerce and
online sales had a great jump in 2020-
2021. As the globe unblocked in 2022,
the margin is gradually disappearing
and the YOY growth went down from
20% to 10%.
Rising demand for
new-style warehouse
The trend of ESG and green building
drive users to pay more attention on
building safety and sustainability. The
importance of public safety with
warehouses is rising , and the building
design will emphasize on disaster and
risk inspection, zone split, building
safety and smart applications, and
more.
After the US-China trade war began in 2018, the global
manufacturing supply chain have restructured. Coupled
with the help of the “Three Major Plans for Investing in
Taiwan”, the demand for Taiwan's industrial properties
have increased.
Since 2019, the transaction amount of industrial properties in Taiwan
has exceeded NTD100 billion every year, and has become the most
popular asset of commercial real estate for the past four consecutive
years. In 2022, the slowdown of global economic growth suppressed
the factory expansion, the market transaction shrank.
From 2018 to H1 2023, the transaction amount of industrial
properties accumulated NTD651.2 billion. By district, the northern
Taiwan, the most important manufacturing hub, has the most active
transactions; the 5-year total transaction amount in Taoyuan City,
Taipei City, and New Taipei City all exceeded NTD100 billion. Hsinchu
County and Tainan City were above NTD45 billion, Kaohsiung City and
Taichung City ranged from NTD35 to NTD40 billion.
• The solid demand made industrial clusters more mature in
northern, central and southern Taiwan, and pushed the land price
to increase.
• The land price in major industrial areas north of Hsinchu have
increased by about 10-50%; south of Hsinchu have increased by
about 40-90%.
In addition to the manufacturers’ expansion, the demand
for industrial properties is also supported by
warehousing and logistics.
Owner-occupiers and investors continued to find opportunities,
especially with location adjacent to national highways and express
ways, or industrial clusters. Also, the safety incidents of warehouses
in recent years pushed the government to announce stricter
regulations on the building safety.
• The demand for warehousing space is changed. Newly-built
warehouses will become the mainstream.
• With the rise of new-style warehouses, users will concern more
about building safety and equipment upgrades. Doing so will
need a larger space, with the single floor area of above 5,000 ping.
• Considering the space for vehicles and unloading cargo, the land
size of 8,000-10,000 ping is preferred, which is also in line with the
scale of the regional logistics center in Taiwan.
2
Tense relationship between US and China, restructure of global
supply chain, Taiwanese manufacturing reshoring pushed the
demand for industrial properties
With the U.S.-China trade war starting in 2018, the Due to Covid, the increasing demand for remote-work
governmental- d “Three Major Plans for Investing in equipment drove demand for computer and
Taiwan” 2019, d h ob p d of Cov d 2020, h communication equipment, entertainment & consumer
manufacturing supply chain has been restructured products, and data processing equipment, thus, Taiwan's
significantly in the past few years. Thus, manufacturers electronics-related equipment exports and the annual
dd ’ p m d Ch h p od o b output value of the manufacturing industry both hit a new
Taiwan government's "Three Major Plans for Investing in high in 2021.
Taiwan“ o dm f ho ,b
P v v m dm f ’ xp o p h d
Taiwan new opportunities for industrial development.
the demand for industrial properties in Taiwan. Starting
from 2019, the island-wide transaction value exceeded
NTD100 billion every year.

Investment amount from “Three Major Plans for Output value of the manufacturing industry
Investing in Taiwan” (2019~2023) (2018~2022)
Manufacturing output value Annual growth rate
Approved NTD trillion
Approved # # of
investment 20 26.3% 30%
of company employment
amount(NTD billion) 25%
2019 302 842.4 69,374 15 20%
15%
2020 475 331.4 28,781
10 10%
-3.7%
2021 367 453.9 30,805 6.5% 6.9% 5%
2022 157 226.0 12,809 5 -5.8% 0%
-5%
2023 YTD 76 963.3 4,412
- -10%
Total 1,377 28,170 146,181 2018 2019 2020 2021 2022
Source: Invest in Taiwan ; Colliers Source: Department of Statistics, Ministry f Economic Affairs, R.O.C.

In 2021, with the record high GDP growth of 6.5%, In 2022, due to the interest rate hikes in the globe, the
manufacturing output value YOY of 26.3%, and export o om y, m f ’ o v v o ook,
amount YOY of 29.3%, the transaction value of industrial and the boom of factory expansion has passed, the demand
properties was NTD163.4 billion (USD52.4 billion). had declined slightly compared to 2021. In 2023, the trend
remained the same. The transaction amount of industrial
properties in the first half of the year was only NTD33.6
billion (USD1.08 billion), which is 72% compared to a year
Transaction of Taiwan’s industrial properties ago.
in the past five years (2018~2023 H1)
NTD billion Industrial land Industrial assets Taiwan's GDP growth YOY on exports
180 35%
29.3%
160 30%
140 25%
120
20%
100
15%
80
6.5% 10%
60
40 5%
20 0%
- -5%
2018 2019 2020 2021 2022 2023 H1
Source: Colliers

3
 Demand for industrial properties and
transaction boom in northern Taiwan

The transactions in the three

metropolitan areas-Taipei, New Taipei,
and Taoyuan, all exceeded NTD100
billion, over 60% of Taiwan’s total

In the past five years, tense relationship between the

Transaction of industrial properties in Taiwan U.S. and China, the restructuring of the global supply
by district (2018~H1 2023) chain, the Taiwanese manufacturer reshoring, the
factory expansion, and the rise of e-commerce were
New Taipei City five major pillars to support the demand for
industrial properties in Taiwan. From 2018 to H1
Taoyuan 2023, the cumulative transaction value reached
City NTD651.2 billion (USD20.9 billion).

Hsinchu area
Taoyuan City has the geographical advantages of
both sea and air ports. Being the manufacturing hub
of northern Taiwan, Taoyuan has the largest supply
of industrial parks of 34 places with different
characteristics. With so, Taoyuan has the highest
manufacturing output value, also being the first
Taichung City
choice for the manufacturing, technological
machinery and logistics and warehousing industries.
In the "Three Major Plans for Investing in Taiwan", the
approved investment amount in Taoyuan City
o fo 30% of T w ’ o Th o
transaction value industrial properties in the past five
years reached NTD158.7 billion (USD5.09 billion),
accounting for 24% of the Taiwan. We can see the city
with the strongest demand for industrial properties.
Tainan City
City NTD billion
Taoyuan City 158.7
Kaohsiung City
Taipei City 148.8
New Taipei City 112.7
Tainan City 50.4
Hsinchu City 45.8
Kaosiung City 38.3
Taichung City 35.6
Others 60.9
NTD billion
Total 651.2
0 – 20 20 – 40 40 – 60 60 – 80
80 – 100 – 120 – 140 –
100 120 140 160 Source: Colliers

4
Regional Trading Hotspots
and Industry Trends
The second hot spot is Taipei City of NTD148.8 billion
(USD4.8 billion). Three major industrial clusters of Neihu
Science and Technology Park, Nangang Economic and Trade
Park and Beitou Shilin Science and Technology Park, Taipei
City have attracted companies of purchasing industrial-office
buildings as owner-occupied headquarters.
New Taipei City ranked the 3rd with a transaction amount of
NTD112.7 billion (USD3.6 billion). Land, factories and
industrial-office buildings in Xindian, Tucheng, Zhonghe,
Taishan, Sanchong, Xinzhuang, Wugu, and Xizhi districts are
popular.
Others, such as Tainan City and Hsinchu area, have obviously
benefited from the expansion of technology industry in the
past three years, and the total transaction value also ranked
the fourth and fifth, respectively.
The southward movement of the semiconductor industry in
Tainan City accelerated the relevant supply chain. In 2021,
TSMC purchased four properties in Tainan City with NTD10
billion; the stable demand in Hsinchu area also have pushed
up the transactions.
The transaction amount and unit price have been rising in
recent years. Colliers identified some major industrial parks in
the northern, central and southern Taiwan. Taoyuan City has
the strongest demand for industrial properties. Hsinchu area,
Taichung City, Tainan City, and Kaohsiung City are driven by
the migration of manufacturers. The appreciation of land
value increased by more than 20% so far from 2019.
Especially in Tainan City and Kaohsiung City, with a lower
price base, the price appreciation has even more than
doubled.

Land value in Taiwan’s major industrial parks

Land value (NTD10,000/ping)

City Name of park Appreciation
2019 2023

New Taipei industrial park 90~100 95~110 10%

New Taipei City Tucheng industrial park 50~55 55~60 9%
Linkou industrial park II 35~40 45~50 25%
Hwaya tech park 50~55 55~60 9%
Guishan industrial park 25~28 30~35 25%
Taoyuan City Zhongli industrial park 25~27 36~39 44%
Dayuan industrial park I 14~16 20~23 44%
Dayuan industrial park II 16~18 25~27 50%
Hsinchu area Hukou industrial park 17~20 26~28 40%

Taichung City Taichung industrial park 25~28 37~40 43%

Yungkang industrial park 14~16 18~22 38%

Tainan City Anping industrial park 14~17 22~25 47%
Madou industrial park 7~9 14~17 89%
Dafa industrial park 14~16 22~25 56%
Kaohsiung City
Benjhou industrial park 6~8 16~18 125%
Source: Colliers

5
Demand for warehouses is stable

Benefits from Covid has been disappeared; Worldwide e-commerce sales (2016-2026)
the growth of the logistics industry and
Sales revenue Annual growth rate
online shopping is slowing down
USD trillion
The Covid spread globally and accelerated the change of 10 35%
p op ’ f y , h vo m of w ho d 26.8% 30%
logistics industry, e-commerce and online sales had a great 8
j mp Th ov of T w ‘ w ho d 22.7% 25%
logistics industry and the number of warehousing in 6 20%
operation both showed leapfrog growth during 2020-2021, 4 15%
but significantly slowed down in 2022 . 10%
2 9.7%
The growth trend of online shopping is the same. The global 5%
e-commerce sales reached USD4.2 trillion in 2020, a 0 0%
substantial increase of 26.8% over the previous year, and 17 18 19 20 21 22 23F 24F 25F 26F
another 22.7% increase in 2021, compared with 9.7% in
2022. Source: Statistic

Sales revenue of retail online shopping Sales revenue of listed e-commerce

(2017-2022) companies in Taiwan(2017-2022)
NTD billion Sales revenue Annual growth rate NTD billion Sales revenue Annual growth rate

600 30.0% 180 30%

160 25.4%
26.7% 21.8%
25%
500 25.0%
22.1% 140 21.1%
20%
400 20.0% 120 19.3%

100 15%
14.1%
300 15.0%
10.3% 10.9% 80 10%
9.6%
200 10.0% 60
5%
40
100 5.0% -1.4%
0%
20
106

105

127

155

170
228

252

287

364

444

493

85

- 0.0% - -5%
2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022
Source: Colliers

Sales volume of warehouse and logistics industry in Taiwan (2016~2022)

NTD billion Logistics related industry Warehouse and delivery & express industry # of warehouse in operation
1,000 1,100

1,000
500
900

- 800
2016 2017 2018 2019 2020 2021 2022
Source: Public finance statistics database, Ministry of Finance, R.O.C.

T w ’ o vo m d -commerce volume also increased by more than 20% in the past two years. However, as
global countries gradually eased restriction on the Covid in 2022, the growth rate slow down significantly to around 10%.

6
Northern Taiwan is the first priority, newly-constructed
warehouses will become the mainstream in the market
The upgrade of equipment and space boosts the
demand for warehouses
Driven by the popularity of e-commerce, the Covid, and the
restructure of supply chain, the demand for warehouses
and logistics in Taiwan increased significantly. Retailers,
distributors, logistics service providers and manufacturers
still maintain the strategy of land banking and continue to
find opportunities. The stable demand also attract
institutional investors with the advantages of long-term
leases and stable tenant demand. Thus, this is also one of
the stable commercial real estate investment targets.
In addition to the above-mentioned factors, we believe that
the surge in warehouse demand in the past two years
om f om h ’ y fo p d o p link the north and the south. By districts, Taoyuan City is the
After a warehouse fire accident in Taoyuan City in 2022
impacting the public safety, the government paid more
attention to the safety inspection and public safety of
warehouses. For example, the design of fire compartments
and auto-sprinkler equipment are required if the ceiling
Different logistic clusters characteristics in
Taiwan
North:
New Taipei City,
Keelung City, and
Taoyuan City
Central:
Taichung City,
Changhwa City
South: Tainan City,
Kaohsiung City
Source: Colliers
height more than 10 M. Therefore , users are eager to
upgrade the space. Those old factories or farmland factories
that converted into warehouses in the past are unable to
satisfy the demand. In addition, old warehouses cannot be
qualified as green-certified buildings. Under the trend of
ESG concept and sustainability, old-style warehouses will
also be gradually eliminated by the market, and newly-
constructed with modern equipment and higher safety
requirement will become the mainstream in the market.
Mature warehouse clusters in the north, central
and south districts in Taiwan
The location and accessibility of warehouse is the first
consideration. National highway No.1 and No.3 can quickly
first choice because of its excellent geographical advantages.
Taichung City and Tainan City, have the industrial cluster
effect, to place electronics-related inventories in the
warehouses, with location around the highways and areas
adjacent to science parks are also favored.
• Northern Taiwan is the largest retail market and
logistic cluster. It has the most active transaction. Since
2019, the transaction amount accumulated to NTD30.4
billion.
• Taking advantage of geographic location and cluster
effect, Taoyuan is the hub of retail & shopping
warehouses.
• Neighborhoods around the airport, such as in Dayuan,
Luzhu, and Guanyin districts, are priorities for e-
commerce operators. The highest rent can achieve
NTD900/ping/month.
• Districts along National highway No.1, such as Zhongli,
Pingzhen, and Yangmei, are preferred by 3PL. The
current rent is NTD700~800/ping/month.
• A mid-stop from south to the north. Since 2019, the
transaction totaled NTD4.8 billion. Owner-occupiers
being the main buyers.
• Major clusters are Wuqi, Dadu, and Wuri districts in
Taichung City and Changhwa City.
• Most supply is cold chain storage with rent around
NTD850~950/ping/month.
• The southward movement of the semiconductor
industry brough in the employment and residents,
giving an opportunity for 3PL development. Since 2019,
the transaction totaled NTD4.5 billion.
• Warehouse demand comes from daily consumption,
retail products, and electronic component.
• The current rent is NTD650~700/ping/month.
7
For further information, please contact:
Andrew Liu
Managing Director | Taiwan
+886 2 8722 8600
andrew.liu@colliers.com

Jason Hung
Senior Director | Capital Market & Investment Services | Taiwan
+886 2 8722 8658
jason.hung@colliers.com

Edison Chou
Senior Manager | Capital Market & Investment Services | Taiwan
+886 2 8722 8653
edison.chou@colliers.com

Eilleen Liang
Senior Director | Research | Taiwan
+886 2 8722 8601
eilleen.liang@colliers.com

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