New retail area planned for Taipei

A 11-floor department store is planned to stand next to the MRT Chunghsiao-Fuhsing Station by 2006, forming a new commercial district with the nearby Pacific Sogo Department Store (太平洋崇光百貨) to compete head-to-head with the now fashionable Hsinyi District.

Far Eastern Group (遠東集團), owner of the money-maker Pacific Sogo, has held talks with Hung Kuo Group (宏國集團) to lease the approximately 18,000 ping of land across the street from Pacific Sogo on Chunghsiao East Rd to operate a new department store, a company official said yesterday.

But Alex Ro (羅仕清), a vice president at the Pacific Sogo, appeared low-key when approached by the Taipei Times yesterday.

He refused to disclose the financial terms of the construction project, only saying that the contract will be signed soon.

Chinese-language newspapers estimated the development will cost NT$7 billion, including NT$2 billion for a 30-year lease and another NT$5 billion for building the facility.

The new retail district is aimed at attracting some of 210,000 MRT passengers who use the Chunghsiao-Fuhsing Station each day -- a figure given by Taipei City's Department of Transportation.

The deal would help Pacific Sogo pose a challenge the Hsinyi District, which encompasses a cluster of shopping malls led by Shin Kong Mitsukoshi Department Store (新光三越).

Shin Kong Mitsukoshi's spokeswoman Shauna Lee (李香萩) appears unfazed by the threat of new competition.

Saying that there is no comparison between the styles of the two districts, Lee stressed that "Hsinyi district is just taking off and has plenty of potential."

She said many luxury brands, such as Louis Vuitton and Chanel, also view Hsinyi district as an important battlefield in their fight to expand their market share.

With one of the largest movie theaters in the city -- the Warner Village Cinema (華納威秀) -- next to Shin Kong Mitsukoshi, Lee said the Hsinyi District is unlikely to be outdone in terms of entertainment variety by the Pacific Sogo-led area.

An industry insider agreed, saying that businesses in Hsinyi district would not be damaged when the new shopping mall opens in two years.

Mavis Chu (朱秀芬), a real estate expert at the Taiwan branch of CB Richard Ellis Ltd, said the latest project is aimed at connecting with Pacific Sogo to enlarge the retail market in the area.

"Each department store targets a unique customer base and no one store can completely replace its competitors," she said. "It is not likely to pose a direct threat to Hsinyi District."

Citing the Breeze Center (微風廣場) as an example, Chu said even though the center is just meters away from MRT Chunghsiao-Fuhsing Station, its neighborhood has its own style.

"Whether strong brands are introduced is the key to determining the success of shopping malls," Chu said.