With orders packed in hand, the technology industry bought old factories at "overpriced" prices. The asking price was the transaction price.

Yang DaDa, director of Cushman & Wakefield Real Estate Appraisers, said that the technology industry is actively buying factories to supplement order production capacity. (Photo by reporter Xu Yiping)

[Reporter Xu Yiping/Taipei Report] AI technology orders are full until next year, and major technology companies are buying factories at "overpriced" (beyond the market price), and even in order to expand production line demand, there is a situation where "the asking price is the transaction price."

Yang DaDa, director of Cushman & Wakefield Real Estate Appraisers, said that in the past, the unit price of land that the technology industry could accept for buying land to build factories was about 300,000 to 400,000 yuan. However, in two transactions such as ASE's purchase of Guaiguai's Zhongli factory and Xinxing's purchase of Bridgestone's Hukou factory, the unit price of each square meter of land was 500,000 yuan if the value of the building was not taken into account.

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The transaction unit price of more than 500,000 yuan per square meter actually breaks away from the past concept of the cost of production bases in the technology industry. This is mainly because orders are full, and the priority is to deal with urgent orders. As long as there is a factory available and meets most needs, people basically spend money to buy it without even "negotiating".

However, he believes that although this situation will continue for a few years, these large technology companies have actually been building factories on government-owned land. Once the government provides relatively cheap land, or even market conditions, the situation of large technology companies buying old factories at overpriced prices may basically end.

Commercial real estate transaction volume in Q1 and Q3 both exceeded 100 billion

Li Yixuan, associate director of Cushman & Wakefield's Valuation and Consulting Services Department, said that the cumulative transaction value of commercial real estate in the first three quarters of this year reached 265.4 billion yuan, of which the single-quarter transaction value in the first and third quarters both exceeded 100 billion yuan. This is a record that has not been seen in the past.

In particular, seven of the top ten commercial real estate transactions were for self-use. In fact, there are many large technology companies buying factories, and the current transaction volume of large technology companies buying factories is very likely to exceed the amount of land purchased by developers in a single quarter.

Looking ahead to the market outlook, self-use demand from the technology industry will remain the main support for the commercial real estate market. If large U.S. cloud service providers continue to invest in AI infrastructure and drive the growth of supply chain orders in Taiwan, the demand for companies to expand production and purchase factories is expected to continue.

As for the investment market, tenant conditions and rental income stability will remain important considerations for the life insurance industry when evaluating real estate investments.

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