Domestic land developers and construction companies are adjusting business strategies to improve earnings and diversify risk as the macroeconomic environment turns increasingly unfriendly, a report by the Chinese-language Housing Monthly said yesterday.
Advancetek Enterprise Co (名軒開發), an affiliate of Lih Pao Construction Co (麗寶建設), will soon complete construction on a commercial property complex in Shanghai, China, the report said.
The complex, with five buildings on 13,700 ping (45,289m2) of land, is Lih Pao’s latest attempt to expand into the commercial property market in China after focusing on residential housing development in that country, Ni Tsu-jen (倪子仁), spokesman of the monthly publication, said by telephone.
Lih Pao aims to turn lower floors of the buildings into retail space and higher floors into office space to generate rental income, Ni said.
The developer won the plot in China’s prime business district for NT$6.84 billion (US$225.23 million) in March this year in a continued bid to strengthen its presence in the city, Ni said.
Cathay Real Estate Development Co (國泰建設), an affiliate of Cathay Financial Holdings Co (國泰金控), will extend its clout to northern Hsinchu County for the first time after recently acquiring a 1,472 ping plot of land near the high-speed railway station in Jhubei City (竹北), the report said.
The 47-year-old firm had been concentrating on property development projects in the nation’s urban downtown areas, playing an active part in boosting their prices, the report said, adding that the future project in Hsinchu was likely to set a new high for neighboring areas.
Other construction companies have sought to improve earnings by expanding into the hospitality industry, the report said.
King’s Town Construction Co (京城建設), the largest land developer in southern Taiwan, earlier made known its intention to spend NT$2.5 billion on building a hotel next to the National Museum of Marine Biology and Aquarium in Kenting (墾丁), Pingtung County. Construction on the 110-room vacation hotel is scheduled to start in 2013, Ni said.
Prince Housing and Development Corp (太子建設) and Kindom Construction Corp (冠德建設) have made similar expansion moves by investing in W Hotel in downtown Taipei and Global Malls (環球購物中心) in New Taipei City (新北市) respectively, Ni said.
Meanwhile, other developers consider it safer to hold onto cash amid the economic uncertainty, the report said.
That consideration led Kee Tai Properties (基泰建設) to sell its cemetery plot in Taipei’s Xinyi District (信義) for NT$3.13 billion and a real-estate property in Shilin District (士林) for NT$829 million earlier this year, Ni said.