Mercuries Life Insurance Co (三商美邦人壽) on Monday said that it had bought several floors and parking spaces at a commercial property in Taipei’s Ximending (西門町) area in Wanhua District (萬華).
The company said it had spent NT$3.95 billion (US$130.6 million) to purchase the shopping mall space of the Taipei TiT Tower Square, near the intersection of Xining S Road and Wuchang Street, from Grand industrial Limited Company of Baofeng (寶豐隆興業).
International real-estate firm Jones Lang LaSalle said the deal was the biggest commercial property transaction so far this year.
The sum compares with appraisals made by Euro-Asia Real Estate Appraisers Firm (歐亞不動產估價師) of NT$4.04 billion and China Real Estate Appraiser Firm (中華不動產估價師) of NT$3.96 billion, Mercuries Life said in a stock exchange filing.
The three-year-old TiT Tower Square is a 27-floor complex that includes residential, office and retail space. Featuring a sailboat-like shape, the mixed-use commercial property has become one of the most eye-catching buildings in the Ximending commercial area, which is a well-known tourism attraction in Taipei and represents sizable business opportunities.
In the filing, Mercuries Life said it had acquired the basement floor and had ownership rights of the complex’s shopping space from the first floor to the fifth floor, along with 21 parking lots.
With a total building area of 2,394.73 ping (7,916.45m2), the deal translates into NT$1.65 million per ping.
Under current regulations, insurance companies are only allowed to buy commercial buildings that can generate immediate income with a gross capitalization rate of 2.875 percent or higher.
“As sellers remain reluctant to sell in the current commercial property market, there is almost no good investment in Taipei that meets the Financial Supervisory Commission’s minimum yield requirement,” Jones Lang LaSalle Taiwan national director Sherry Wu (吳瑤華) said in a statement.
The real-estate consultancy said it believes the deal would allow Mercuries Life to meet the commission’s 2.875 percent threshold.
"It indicates that investors still chase good real-estate targets if they are in good locations and can generate reasonable rental yields," Wu said.
The latest deal came after Mercuries Life spent NT$820 million acquiring an office building in Greater Kaohsiung's Lingya District (苓雅) in January and purchased Elitegroup Computer Systems Co's (精英電腦) headquarters building in Taipei's Neihu District (內湖) for NT$6.68 billion.