Following a strong first quarter of 2021, total retail sales in Taiwan grew by a modest 2.3% y-o-y in Q2 2021. The slowdown in sales growth was attributed to a spike in local COVID-19 infections, which saw the pandemic alert level raised to level 3 from mid-May.
Average high street rents in Taipei fell by 1.8% q-o-q in Q2 2021, the largest quarterly decline since Q4 2020. The ongoing drop in rents is mainly due to increased vacancy in major shopping districts arising from a more cautious stance adopted by retailers.
The deterioration in the job market will likely affect local consumers’ willingness to spend in the coming months. Store closures will likely increase in Q3 2021, pushing vacancy rates higher. Selected local retailers may take up space in prime locations to capitalise on reduced rents.