Far Glory Life Insurance Co (遠雄人壽), an insurance subsidiary under Far Glory Group (遠雄企業團), has acquired a 1,418 ping (4,679m²) plot of land in Taipei’s upscale Xinyi District for NT$12.9 billion (US$420 million) where it plans to construct an office building, a company executive said yesterday.
The deal’s land price — at nearly NT$7 million per ping — set a new record in the city’s real estate market.
But Far Glory said yesterday that it believed the price is reasonable, considering the planned building’s total floor area of 15,054 pings, or NT$850,000 per ping.
“We think it’s a good deal because there’s no way you can buy a grade-A office building in this district for as low as NT$850,000 per ping,” said Tsai Chung-i (蔡宗易), assistant vice president of Far Glory Group, over the telephone.
He said the commercial property market in Taipei is still not expensive compared with South Korea and Hong Kong, where office buildings average NT$3.6 million and NT$5 million per ping respectively.
The company plans to construct a 32-floor building for its financial arm within three years, opposite its headquarters across the street.
If part of the building is released for rentals, Far Glory expects a minimum return of 5 percent, given the district averages a monthly rent of NT$3,500 per ping for office rentals, said a company press statement released on Tuesday.
Billy Yen (顏炳立), general manager of real-estate consultant DTZ (戴德梁行), said yesterday that the deal was a bargain since rental return of the district’s office buildings averages 4 percent.
A local media report said foreign investors were also interested in the deal. But they failed to offer more than NT$8.6 billion for the plot of land alone, far lower than Far Glory’s offer of nearly NT$9.9 billion.
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