Thu, Aug 30, 2007 - Page 12 News List

Chunghwa Telecom to set up property subsidiary venture

By Lisa Wang  /  STAFF REPORTER

Chunghwa Telecom Co (中華電信), the nation's largest telecoms operator, yesterday said it plans to spend NT$5 billion (US$151 million) on setting up a property development and management subsidiary to revitalize 410 hectares of idle properties in light of a slowing telecoms industry.

The board rubber-stamped the proposal on Tuesday night, taking their cue from Asian peer NTT DoCoMo Ltd.

The Japanese telecoms operator is ranked the No. 4 property developer in Japan.

Shares of Chunghwa Telecom rallied 2.92 percent to NT$56.40 yesterday, defying the TAIEX's 0.97 percent loss.

"The company is looking to recruit talent to run the land development and property management business so as to maximize its asset value," Chunghwa Telecom said in a statement.

The cost of the investment would amount to NT$5 billion, the Chinese-language Economic Daily News said, quoting a company official.

Chunghwa Telecom said it is willing to working with other property developers.

Approximately one-tenth of the plots Chunghwa owns are located in downtown districts or sightseeing areas, the company said.

Chunghwa Telecom said the new subsidiary would boost turnover on the company's immovable assets and enhance its real estate operational efficiency.

In January, the company signed an agreement with local property developer Ruentex Development Co (潤泰創新國際) to build a housing complex on a 2,332 ping (7709m2) piece of land it owns in Taipei's Wanhua District.

Chunghwa Telecom would make NT$2 billion from the deal.

The project is the third of its kind for Chunghwa Telecom, after the company signed contracts with local hotel operator Leader Hotel Consultant Co (立德旅館) and construction firm Kindom Construction Co (冠德建設) to build a hotel in Kenting and an apartment building in the suburbs of Taipei in the third quarter of last year.

Chunghwa Telecom generated NT$270 million revenue by developing its under-utilized real estate in 2005.

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