Taiwan property to gain from China ties-Jones Lang

Closer ties between Taiwan and mainland China after a Taiwan leadership change will boost investment in and demand for offices, shopping malls and hotels on the island, U.S. real estate consultancy Jones Lang LaSalle Inc said on Wednesday.

Office rentals in Taipei, Taiwan's capital, may jump 20 percent this year and 15 percent in 2009, China head of research Kenny Ho told reporters in Shanghai.

An expected surge in tourist arrivals from the mainland will also boost demand for retail space and hotels, he said.

"The growth of Taiwan's commercial property market has been suppressed and undercapitalised because of the past severe restrictions on economic exchanges by the Taiwan government," Ho said.

"With the leadership change, we foresee opportunities for mainland China investment in Taiwan's property market."

Taiwan President-elect Ma Ying-jeou of the China-friendly Nationalist Party , who will take office on May 20 to succeed Chen Shui-bian of the Democratic Progressive Party, favours better business ties with the mainland, including more direct air flights, more tourism from the mainland and normalised trade ties.

"Once capital from mainland China is able to be invested in the office market, we anticipate a steep rise in capital values," said Tony Chao, managing director of Jones Lang Taiwan.

Low financing costs, limited new supplies in coming years and Taiwan's strategic location at the centre of East Asia may all translate into increased demand for commercial properties in Taiwan, Jones Lang said.