King Car Food Industrial Co (金車企業), the nation’s leading maker of ready-to-drink coffee, yesterday won the bid for an office building in downtown Taipei by offering a premium of nearly 50 percent, with a view to turning it into a store for high-end products.
King Car won the auction for the nine-story building on Jianguo S Road near Zhongxiao E Road for NT$712 million (US$24.61 million), 48.67 percent higher than the asking price of NT$478.99 million, according to organizer Mega International Commercial Bank (兆豐國際商銀), the banking unit of state-run Mega Financial Holdings Co (兆豐金控).
The auction drew seven bidders to compete for Mega Bank’s idle asset, which sits on a plot of land measuring 126.75 ping (419m2) with 813 ping of floor space.
“We intend to turn the building into a flagship store for Kavalan Whisky,” the company’s new alcoholic beverage, King Car spokesman Richard Ma (馬明皓) said by telephone.
The property purchase came in line with the company’s plan to tap further into the service industry and add higher-end alcoholic beverages to its product lines, which include canned coffee, green tea drinks and bottled water, Ma said.
King Car Food, a member of the King Car Group, which also includes King Car Logistics Co (金車物流), King Car Whisky Distillery (金車酒廠), King Car Education Foundation (金車教育) and Mr Brown Cafe (伯朗咖啡館), plans to increase its number of whisky stores from the current six to 30 nationwide this year, he said.
It also plans to open at least three more cafes in addition to the existing 47, he said.
“The purchase of the building is part of King Car’s move to innovate and transform [the company] rather than a speculative venture into property investment,” Ma said. “The prime location is expected to help boost sales.”
King Car has not drawn up a plan for the whole building, as the store might not take up all the floor space, Ma said.
Still, the bidding outcome bodes well for the commercial property market, real-estate analysts said.
“The winning bid translates into NT$1.41 million per ping for the ground and second floors and NT$940,000 per ping for the third floor and above, both of which are higher than prevailing market rates for B-class office space,” said Michael Wang (王維宏), an assistant manager at Sinyi Realty Co (信義房屋), the nation’s only listed real-estate brokerage.
The building will prove a savvy asset deployment on the part of King Car in light of its location and undivided ownership, Wang said.
Savills Taiwan Ltd (第一太平戴維斯), another real-estate service provider, said the building could generate a rental yield of 1.92 percent if King Car decides to lease part of it.