Mercuries Life Insurance Co (三商美邦人壽保險) has bought an office building in Taipei that may generate a return of 3 percent on investment per year.
On Tuesday, the insurer purchased the office building in Neihu District (內湖) from Elitegroup Computer Systems Co (精英電腦) for NT$6.68 billion (US$225.37 million), property broker Jones Lang LaSalle Taiwan (仲量聯行) said.
With 20 stories above ground and four basement floors, the building has a total floor space of 11,600 ping (38,280m2) and sits on a 1,595.97 ping plot of land.
THREE PERCENT RETURN
“The deal will give the insurer a 3 percent return,” meeting the minimum 2.875 percent yield requirement for life insurers set by the Financial Supervisory Commission, Jones Lang LaSalle managing director Tony Chao (趙正義) said yesterday.
The broker canceled an auction for the building in October after its previous asking price of NT$7 billion failed to attract any bidders.
Elitegroup, an affiliate of century-old home appliance brand Tatung (大同), will lease the building for the next 10 years to use as its headquarters, Chao said.
The deal is one of the few property investments by domestic life insurers this year after the commission imposed a purchase ban for most of the year to help cool the commercial property market.
About 10 prospective buyers at home and abroad had made inquiries about the building, which has a book value of NT$3.08 billion, Chao said.
Separately, Farglory Group (遠雄企業集團) has teamed up with Japan’s Mitsui Fudosan Co to develop a retail complex in Linkou District (林口), New Taipei City (新北市), which is slated to start operations in the second half of 2015.
Under the joint venture, the Japanese partner is to supply 70 percent of the capital and Farglory Land Development Co (遠雄建設) will contribute the remaining 30 percent to turn a 6.73 hectare plot of land into a retail complex, Farglory said in a statement yesterday.
Plans for the complex include 200 retail stores with outlets, restaurants, theaters and supermarkets, the statement said.