Shin Kong Life Insurance (新光人壽) yesterday bought an office building in the Neihu Technology Park (內湖科技園區), reinforcing the insurer’s status as one of the largest landlords in the Taipei science park, with a total of 10 office buildings in its investment portfolio.
Shin Kong Life, the nation’s third-largest life insurer, signed a contract with Hung Poo Real Estate Development Co (宏普建設) to buy the 11-floor building for NT$1.05 billion (US$32 million), according to a stock exchange filing submitted by parent company Shin Kong Financial Holding Co (新光金控).
The sum compares with appraisals made by REPro International Inc (瑞普國際物業公司) of NT$970 million and Top Real Estate Appraisal Firm (尚上不動產) of NT$935 million, Shin Kong Financial said in the filing.
The life insurer said in a statement yesterday that the quality of Hung Poo buildings have long been recognized by the industry and that the newly acquired building, just completed in May, is attractive because of a good location — just 300m from Xihu (西湖) station on the MRT Neihu Line.
Including the Hung Poo building, Taipei-based Shin Kong Life will have invested NT$18.6 billion in office buildings in Neihu District since 2000, the company said.
“Neihu Technology Park has become a mature business area. Shin Kong Life remains positive on the district’s outlook considering the opening of Neihu MRT and its closeness to Songshan Airport,” the statement said.
The company expected to rake in an annual fixed rental income of NT$750 million from its investments, the statement added.
Looking ahead, Shin Kong Life said it would continue searching for good investment targets in Taipei City, especially in Neihu, Xinyi (信義) and Nangang (南港) districts.
The company announced in October last year that it planned to invest up to NT$20 billion in quality real estate in Taiwan.
Shin Kong Financial last month successfully raised NT$13.12 billion in new capital via the issuance of global depositary receipts, which some analysts said would help strengthen the life insurance subsidiary’s capitalization.
But the nation’s low interest rate environment will continue to put pressure on Shin Kong Life’s earnings performance and could potentially offset benefits from the new capital increase, Fitch Ratings said on July 29.
Shares of Shin Kong Financial dropped 0.42 percent to NT$11.9 yesterday. The stock has risen 33.71 percent so far this year, compared with 50.48 percent on the benchmark TAIEX over the same period.
In a separate filing, Hung Poo said it would book a profit of NT$454 million, or NT$1.57 in earnings per share, from this deal. Shares of Hung Poo rose 3.87 percent to NT$41.65.
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