Prime shop rents in Taipei may grow as much as 15 percent in the next two years on expansion by global retailers seeking to tap an increase in mainland Chinese tourists, according to Cushman & Wakefield Inc.
Monthly shop rents on Zhongxiao East Road, the city’s busiest shopping district, are currently about NT$20,000 ($665) per ping, a standard measure in Taiwan that is the equivalent of 36 square feet (3.3 square meters), after average annual growth of about 3.7 percent over the past decade, said Sigrid Zialcita, managing director for Asia-Pacific Research at New York-based broker Cushman & Wakefield.
The number of mainland tourists to Taiwan grew 23 percent to 2 million last year from 1.63 million in 2010, after the island in 2011 allowed individual travelers from the mainland for the first time in more than six decades. President Ma Ying-jeou, who took office in May 2008, has focused on improving cross-strait ties through economic links, abandoning his predecessor’s pro-independence stance.
Cushman & Wakefield, the world’s biggest closely held realtor by headcount, this month opened its first office in Taipei. It plans to increase the number of staff there fivefold to 100 from the current 20 in the next five years, Randall Hall, chief executive officer for Greater China, said in a June 21 interview in Hong Kong.
“The opening up of mainland tourists is a good enough reason for us” to be in Taiwan, Hall said. “What’s exciting about Taiwan is that its retail real estate offering is fairly limited. There are a lot of opportunities for growth.”
China and Taiwan have been ruled separately since Chiang Kai-shek’s Kuomintang, or Nationalists, fled to the island after being defeated by Mao Zedong’s Communists in 1949.
An increase in Chinese tourists over the past decade helped the Causeway Bay district in Hong Kong, a former British colony returned to Chinese rule in 1997, to overtake New York’s Fifth Avenue as the world’s most-expensive retail location, according to a Cushman & Wakefield report in November.
Cushman & Wakefield will also look into business opportunities generated by demand for industrial space in Taiwan spurred by Ma’s initiatives to lure businesses to expand with tax cuts and increased foreign-labor quotas, Hall said.