The share price of Chong Hong Construction Co (長虹建設) rose 2.33 percent to NT$66 yesterday, bucking the TAIEX’s 0.19 percent fall, after the company sold an office building to Fubon Life Insurance Co (富邦人壽) with a generous premium a day earlier.
On Wednesday, Fubon Life inked a pact with Chong Kong to buy a commercial property in Neihu Science Park for NT$7.09 billion (US$236.7 million), according to the firms’ filings to the Taiwan Stock Exchange.
With 10,743 ping (35,452m2) in floor space, the building is in the final stage of construction and might be completed in October.
Fubon Life plans to lease the office space to generate a rental yield of more than 2 percent a year, said Victor Kung (龔天行), president of Fubon Financial Holding Co (富邦金控), Fubon Life’s parent company.
The deal translated into NT$660,000 per ping, a record high for an office building in Neihu, IBTS Investment Consulting Co (台灣工銀投顧) said in a report.
IBTS Investment put the net gain from the sale at NT$2.45 billion for Chong Hong Construction, a sum that is equal to the developer’s capital size.
The deal rendered a planned auction for the building unnecessary. Chong Hong previously asked DTZ to sell the building through an open auction in August and set the floor price at NT$8 billion.
IBTS Investment yesterday said it maintained a “buy” rating for Chong Hong stock, with a target price of NT$84.