Taiwan's second largest life insurer, Shingkong Insurance Co (新光人壽), plans to sell off three prominent commercial buildings in Taipei within two months, a company official told the Taipei Times yesterday. The company hopes to generate at least NT$14 billion to boost the insurer's capital reserves to as much as NT$19.6 billion.
First to be sold off is Shingkong's Tun-nan Building (敦南大樓) for a whopping NT$6 billion, with bidding by mail beginning this Friday, said Lee Tiao-yang (李調陽), manager of Shingkong's real estate department. Located on the angle-street intersection of Jen-ai Road and Tunhwa South Road, the complex is best known for the 24-hour Eslite Bookstore which occupies the second floor and lower level.
Citing confidentiality, Lee refused to reveal the identity and number of potential bidders, but did add that the successful party and closing price would be made public after the bidding process ends at 2 pm Friday.
With a 90 percent occupancy rate, Lee said that it is a highly profitable complex with a yearly rental income of NT$340 million. Most of the current leases end between this year and 2008, he `Lee is confident that the company's floor price for the 12-story building and 5 lower-level floors is reasonable.
"The location of the building is good and most tenants are very classy. Plus, our floor price is 10 percent less than what the professional appraisers have assessed," Lee said.
Sharing a similar view with Lee, a market insider, who requested anonymity, yesterday raised concerns that few investors could afford such a large chunk of change during tough economic times.
In response, Shingkong has come up with a payment plan, offering potential buyers a three-year loan for as much as NT$2 billion with an interest rate of 3 percent, Lee said.
That is, the new owner will first pay 10 percent of the final price at the end of the final bid and at least another 30 percent when all paperwork for the sale is done in about one month.
Also on the chopping block is the upscale foreign residence of many expatriates, the Jasper Villa (傑仕堡大樓), located on Tienmu's Chungchen Road. Set for auction on Sept. 9, potential buyers must be willing to part with a cool NT$5.4 billion for the 26-story building with three lower level floors.
Lee said that the villa is fully leased with a yearly rental income of NT$300 million while some future tenants are lined up for future vacancies.
Lee yesterday said that the government's implementation of a real estate securitization law should motivate some property investors to pay special interest to the sales.
Shingkong, however, is currently studying the possibility of selling its third building -- the Chungshan Building (中山大樓), located at the intersection of Chungshan North Road and Changchun Road -- floor by floor since the whole property is too expensive.
Lee said that the Chungshan Building should have a market value of nearly NT$3 billion. Since a number of small-time investors have expressed interest in buying some shares, he said that the company has not ruled out the possibility of auctioning the building off piece by piece, adding that a final decision would be reached no later than the end of September.
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