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CMP to auction off key Ximending building

The Central Motion Picture Co (CMP, 中央電影公司) plans to auction off its New World Building (新世界大樓) near the Ximen MRT station at a floor price of NT$2 billion (US$61.5 million) this month, a real estate consultancy firm said yesterday.

The nine-story building, sitting on a 435.9 ping (1,438m²) plot of land, has a total floor space of 2,872 ping, auction organizer DTZ Debenham Tie Leung International Property Advisers (戴德梁行) said.

DTZ general manager Billy Yen (顏炳立) said the property, if sold at the floor price, could generate rental income of NT$120 million a year, though the current yield may drop to 4.24 percent if traded at NT$2.5 billion.

“That is a pretty good buy for companies with ample funds on hand,” Yen told a media briefing. “The central bank has been lowering interest rates, rendering investment in real estate more feasible and desirable.”

The auction will take place on Nov. 26, Yen said.

Tuggy Tsai (蔡佩雯), a DTZ project specialist, said the 40-year-old building houses an Eslite Book Store, a movie complex with two 300-seat theaters and dozens of clothing retailers and offices.

“There is great business potential considering its location, in the hub of Ximenting (西門町) where young people like to hang out,” Tsai said.

Yen said both residential and commercial property markets have turned bearish since the second quarter and the pessimistic sentiment was unlikely to reverse amid the global recession.

But he said now was a good time for investors, particularly domestic life insurers, to enter the market because they have a lot of idle funds.

“It is a buyer’s market now,” Yen said. “Holding on to cash may appear unwise if the central bank keeps cutting interest rates.”

The central bank has lowered key interest rates four times in the last six weeks in a bid to stimulate economic growth.

Pundits expected the central bank to continue its loose monetary policy until the end of this year.
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