Sat, Feb 25, 2006 - Page 10 News List

High-end service apartments the latest hot trend

By Jackie Lin  /  STAFF REPORTER

Against the backdrop of low interest rates and frequent turnover in Taiwan-based foreign corporate executives, developing "service apartments" has become the latest hot investment target for real estate developers.

Taiwan Life Insurance Co (台灣人壽), the nation's eighth-largest life insurer, unveiled its first service apartment project in the upscale Tianmu district of Taipei yesterday, following in the footsteps of Shin Kong Life Insurance Co (新光人壽) and Shining Group (鄉林集團).

"We're eyeing long-term stable rental returns, and there is great potential for the value of this real estate project to appreciate," said Steve Lin (林欽淼), president and chief executive officer of Taiwan Life, during a media tour of the "Starry 9" project yesterday.

The building, which includes just nine units, is expected to rake in more than NT$20 million (US$615,000) in rental income per year, guaranteeing at least a five-percent return per year on a total investment of NT$400 million, Lin said.

That five-percent return compares favorably to 20-year government bonds, which offer less than 2 percent.

The insurer is optimistic about its profitability considering the robust demand from foreign executives taking jobs here and corporate rental needs for businesses operating both in Taiwan and China, Lin said.

The Taichung-based Shining Group (鄉林集團) is also betting big on the market by develop Taichung's first service apartment project.

The 400-unit project, named Shining Chateau, has secured a more than 20 percent transaction rate since last month. It is expected to be completed by the end of the year, allowing buyers to start renting them out next year, said Fred Ying (應致德), Shining Group's vice president.

The upscale resort The Lalu (涵碧樓), located on Sun Moon Lake and also operated by Shining Group, will take charge of the hotel-style management of the apartment building.

"This would be a good investment target for buyers" as prices might continue to climb, partly fueled by the establishment of the science park in central Taiwan, which will create 10,000 jobs this year and up to 60,000 in the next five years, Ying said.

Shining Group is mulling a second service apartment project in Taichung, followed by similar projects in Beijing, Shanghai, Japan and India as part of its expansion plans, he added.

Shin Kong Life Insurance Co (新光人壽), one of the nation's first service apartment developers, currently owns two such projects -- Shinkong Jasper Villa Tianmu and Jasper Villa Xinyi -- in Taipei.

"Our strategy is to continue increasing our stake in the real estate market," said Victor Hsu (許澎), spokesman for Shin Kong Life.

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