Total retail sales in Taiwan increased by just 0.5% y-o-y in the first two months of 2020. Despite solid automobile sales, supported by the launch of new models, the impact of the COVID-19 outbreak on consumer spending gradually become more visible over the quarter.
Average high street rents in Taipei fell by 1.5% q-o-q in Q1 2020 amid a general lack of leasing demand. Retailers have adopted a conservative attitude towards expansion, with new openings by foreign retailers dropping by 76% y-o-y over the quarter.
Leasing activity will be weak for the next few quarters as retailers defer expansion plans. Only a few retailers, mainly those engaged in grocery retailing and the health and beauty care sectors, will add to their footprint in major and secondary shopping areas. More landlords are expected to provide rent holidays and temporary rent reductions to retain tenants.