Sunrise selling property to pay off debt

Debt-ridden Sunrise Department Store (中興百貨) is expected to sell its retail property in Taipei for NT$1.7 billion (US$55.3 million) to NT$2 billion by the end of next month, real estate agency Savills Taiwan said yesterday.

"Savills Taiwan is in talks with five investors from Hong Kong, which have offered lower than NT$2 billion [for the property]," Cynthia Chu (朱幸兒), senior director and general manager of Savills Taiwan, said by telephone.

Aside from foreign investors, Chu said three local businesses also checked out Sunrise's retail site yesterday. Two are department store operators, and the third an investor who plans to divide the outlet into small shops and rent them out individually.

"As Sunrise's proposed price of NT$2 billion is close to its market value of between NT$1.7 billion and NT$2 billion, Savills Taiwan is confident it could close the deal by the end of next month," Chu said.

Sunrise is located on the intersection of Fuxing N Road and Changan E Road. The sale will only cover part of the building owned by Sunrise, totaling 2,630 pings (8,679m2), Chu said, as the other property owners found the price Sunrise proposed too low.

Other retail outlets that have been sold over the past year include D'Mark Department Store's (德安百貨) Taichung outlet to ING Antai Life Insurance Co (ING安泰人壽) for NT$4.6 billion, D'Mark's Neihu branch to Yuanta Group (元大集團) for NT$3 billion and Asiaworld Shopping Mall's (環亞購物廣場) first and second floors to China Medal Products Group (勤美集團) for NT$2.2 billion, according to Savills Taiwan tallies.

Sunrise owes a total of NT$220 million to its suppliers, with outstanding loans totaling NT$630 million.

The department store also owes some NT$50 million to its staff of 100, Miki Yu (游明親), Sunrise's spokeswoman, said by telephone yesterday.

"Sunrise still has debts totaling NT$900 million," Yu said.

Bao Pei-lin (鮑佩鈴) replaced Jeff Tsai (蔡振世) as president in early January, after the retailer encountered serious financial problems last year.

Formerly known as Sesame Department Store (芝麻百貨), Sunrise was founded in 1985 by Chung Shing Textile Co (中興紡織). Sunrise was known for its designer boutiques and innovative decorations, but floundered as competition from new and bigger deparment stores intensified.