Adding heat to the commercial property market, Ting Ho Development Co (頂禾開發), an affiliate of Ting Hsin International Group (頂新集團), yesterday won the auction of China Bills Finance Corp’s (中華票券) headquarters building with a record high offer, organizer DTZ said.
Ting Ho Development, whose parent group owns China’s biggest instant noodle brand, Masterkong, and Taiwan’s Wei Chuan Foods Corp (味全食品), beat eight rivals by offering NT$4.63 billion (US$152.21 million) for the 14-story building on Dunhua S Road in Taipei.
That meant a 72.7 percent premium over the floor price of NT$2.68 billion and translated into NT$1.72 million per ping (3.3m2) for a total of 2,696 ping in floor space sitting on a land plot of 329 ping, DTZ said.
The figure topped the NT$1.32 million per ping Cathay Life Insurance Co (國泰人壽) offered the previous week to secure a 62 percent stake in an adjacent building — the underlying asset for real-estate-backed securities issued by Shin Kong Life Insurance Co (新光人壽) in 2005.
“Full ownership renders the building an attractive buy,” DTZ general manager Billy Yen (顏炳立) said. “The new owner may apply for an urban regeneration permit and turn it into a luxury home project or other purposes as seen fit later.”
It is not the first time Ting Hsin has sought to expand its real-estate portfolio.
Last week, it lost the REAT auction to Cathay Life with an offer of NT$9.1 billion. In July 2009, it became the largest private shareholder in Taipei Financial Center Corp, which owns the Taipei 101 skyscraper. It has voiced interest in acquiring more shares in the world’s tallest occupied building.
The asset divestment is expected to generate profits valued at NT$3.43 billion for China Bills, judging by its purchase costs at NT$1.2 billion, Yen said.
Shares in China Bills closed up 0.2 percent to NT$9.92, weaker than TAIEX’s 0.8 percent rise, as investors remained cautious about financial shares amid Europe’s debt crisis.
Sherry Wu (吳瑤華), director of investment and markets at Jones Lang LaSalle, an international property consultancy, said the commercial market has seen -active transactions of late, driven by profit-taking and attempts by life insurers to digest excess liquidity.
“The sellers opted to realize profits, probably due to concerns that commercial property prices are approaching peaks,” Wu said. “The buyers, on the other hand, are mostly large-scale domestic insurers that have made known their intent to lower cash levels.”
Ruentex Development Co (潤泰創新), Taiwan’s major supermarket operator and property developer, is slated to sell two plots of land near Taipei Railway Station today to trim inventory and strengthen capital.
En Tie Commercial Bank (安泰銀行) plans to auction a stake in a building near Ta-an Forest Park next month to divest idle assets.
Wu expects commercial property transactions to exceed NT$120 billion this year after totaling NT$85.4 billion prior to the auction yesterday.
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