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Taiwan's successful coronavirus response is likely to boost its retail, hotel segments
By Cheryl Arcibalcheryl.arcibal@scmp.com | April 28, 2020

Taiwan's successful response to the Covid-19 pandemic is likely to boost interest in its retail and hotel segments, as its property market is tipped to be one of the quickest to bounce back once the coronavirus recedes.

As of Thursday, April 16, its Covid-19 tally stood at 395 cases and six deaths, one of the lowest in the world despite its proximity to mainland China, where the disease was first detected. The decisive actions taken by Taipei to stem the spread of the virus have earned it accolades and recognition as one of the best responses worldwide.

"Taiwan's success in Covid-19 containment gives its retail and hotel businesses more chances of surviving the pandemic," said Erin Ting, research director at Savills Taiwan.

Foreign investors appear to agree with this assessment " Taiwan's hotel and retail segments have received US$114.3 million in investment so far this year, more than a fifth of the US$536.3 million in investment they recorded in the first half of last year, according to data from Real Capital Analytics.

The investment is banking on continued growth in the two segments. Taiwan's retail sector grew about 2.6 per cent to US$103.2 billion in 2019 from US$100.6 billion in 2018, based on data from Euromonitor International. The hotel sector grew to US$3 billion from US$2.9 billion in the same period.

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These segments were, however, not immune to the global slump brought on by the pandemic. The number of new openings by foreign retailers dropped 76 per cent year on year in the first quarter, according to property consultancy CBRE. Foreign visitors to Taiwan fell 62 per cent in February, with hotels across the island reporting that occupancy rates were below 20 per cent in recent months.



Hong Kong-based boutique investment firm Arch Capital has invested in Taiwan's retail segment. It acquired the Taimall Shopping Centre in Taoyuan for US$450 million in a joint venture with a Taiwan real estate investment trust.

"Retail in Taiwan has been stable and, in fact, quite resilient during this period because they have always relied on domestic demand versus demand derived from tourism," said Richard Yue, Arch Capital's chief executive. "Social distancing has had some impact on foot traffic, but the overall effect on revenue has been minor compared to what many other countries are experiencing."

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Savills' Ting said Taiwan's reputation as a safe destination will help it attract international visitors in the long-term.

"CBRE Research maintains a positive stance on the long-term prospects of the Taiwan hotel market," said Ping Lee, head of research at CBRE Taiwan. "Several international hotel groups keenly expanded their footprint in Taiwan before the outbreak, attracted by the robust growth in international visitor arrivals and domestic travel " a trend that is expected to continue once the pandemic is over."

International hotel companies such as Marriott International, InterContinental Hotels Group and Hyatt Hotels are currently developing new sites across Taiwan, according to CBRE.

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This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.


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