Offer made for Holiday Inn Asiaworld Taipei

The real estate market looks set to remain buoyant after a bidder offered to buy the Holiday Inn Asiaworld Taipei for NT$7.04 billion (US$224.6 million) real estate agents said yesterday.

The deal would be the biggest real estate investment project in two years.

The Holiday Inn Asiaworld Taipei, formally called Asiaworld Plaza Hotel, is situated at the intersection of Dunhua N Road and Nanjing E Road, in Taipei's bustling commercial area.

The five-star hotel occupies an area of 3,252 ping (10,730m2), which means each ping will be sold at NT$2.16 million, 2.12 times of its current value.

The price is not far behind the sky-high offer of NT$2.74 million per ping made by Shin Kong Life Insurance Co (新光人壽) in early March to acquire two residential parcels of state-owned land in downtown Taipei, according to a press release issued yesterday by Sinyi Real Estate Inc (信義房屋), the nation's largest housing agent.

"The Holiday Inn Asiaworld Taipei case is a bullish indicator for Taiwan's real estate sector. Its transaction value is second only to Cathay Life Insurance's (國泰人壽) NT$8.2 billion bid in 2004 to obtain the A3 land in Taipei's Xinyi District," said Kenny Ho (何偉宏), manager of Sinyi Real Estate.

Tony Chao (趙正義), managing director of Jones Lang LaSalle Taiwan, agreed, saying that the deal reflects developers' positive view of the housing market.

"Basically the buyer has its eye on the market's potential as the occupancy rate of hotels nationwide has gone up over the past year and the government is mulling allowing more Chinese tourists to visit Taiwan," he said in a telephone interview.

The Holiday Inn Asiaworld Taipei, owned by the cash-strapped Asiaworld Group (亞世集團), has been placed on public auctions by Taipei District Court three times since last June. The auctions all failed because the floor price was viewed as too high.

The floor price was set at NT$11 billion for the first auction but was slashed to NT$8.79 billion for the second and then NT$7.04 billion for the third auction.

The 24-year old hotel occupies 17 stories -- three below ground -- and has 751 rooms.

Before the deal was closed, there was widespread speculation that Wang Yung-ching (王永慶), chairman and founder of the Formosa Plastics Group (台塑集團), was likely to take over the hotel, considering his close friendship with owner Cheng Chou-min (鄭周敏).

Things changed overnight, however, when Fuhwa Bank (復華銀行) said that it had been commissioned to apply to the Taipei District Court to buy the hotel for NT$7.04 billion.

Fuhwa declined to identify the buyer because of a confidentiality agreement, said Lue Chung-ping (呂忠萍), the bank's senior vice president.

But the Chinese-language United Daily News reported yesterday that the interested buyer is Chen Te-fu (陳得福), chairman of the direct selling firm Sunrider (仙妮蕾德).