Sun, Aug 23, 2009 - Page 11 News List

Fubon Life spends NT$4.3bn for Chiayi commercial building

By Kevin Chen  /  STAFF REPORTER

Fubon Life Insurance Co (富邦人壽) announced on Friday it had paid NT$4.3 billion (US$131 million) for a commercial building in Chiayi City as part of its effort to expand its real estate investment portfolio, after the company acquired 14 floors of the 18-story AsiaWorld building for NT$10 billion on Thursday last week.

In a filing with the Taiwan Stock Exchange, parent Fubon Financial Holding Co (富邦金控) said its insurance unit bought the building from Janfusun Ltd (劍湖山世界公司), which operates Janfusun Fancyworld amusement park as well as Nice Prince Hotel (耐斯王子大飯店) in Chiayi City and Janfusun Prince Hotel (劍湖山王子大飯店) Yunlin County.

The land area of the building, comprising both Nice Prince Hotel and Nice Plaza department store (耐斯松屋), is 12,198m2, while the floor space is 96,576.76 m2, the filing showed.

FURTHER INVESTMENT

On the same day, the life insurer said its board also authorized chairman Richard Tsai (蔡明興) to negotiate terms and proceed with a planned real estate purchase with a maximum investment of NT$20 billion in the Greater Taipei area within a year, according to a separate exchange filing.

Fubon has invested about NT$26.9 billion in the domestic real estate market so far this year, based on the company’s previous filings.

The sum of NT$4.3 billion compares with appraisals made by real estate agency Savills Taiwan (第一太平戴維斯台灣) of NT$4.09 billion and G-Beam Real Estate Appraisers Firm (巨秉不動產估價師) of NT$4.05 billion, the filing showed.

LEASE

Janfusun said in a statement on Friday that it would lease the building for use over the next 10 years. As the company will pay annual rental fees of around NT$200 million, its 10-year lease is likely to generate 4.7 percent of the annual rental yield rate for Fubon Financial.

Janfusun said it would book a loss of NT$390 million from the sale of the building, the statement said. However, the company said the sum of NT$4.3 billion would enable it to pay back bank loans while having enough ammunition to target other tourism-­related investment.

Shares of Fubon Financial fell 1.64 percent to close at NT$30 on Friday, before the property purchase was disclosed.

The stock has risen 25.52 percent since the beginning of the year, compared with a gain of 44.95 percent on the benchmark TAIEX over the same period of time.

Janfusun, meanwhile, fell 4.5 percent to NT$10.6 on the GRETAI Securities Market. The stock has increased 35.72 percent so far this year, compared with a gain of 68.87 percent on the over-the-counter index.

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