Shining Building Business Co (鄉林建設) plans to roll out five new construction projects targeted at first-time buyers this year, as the Taichung-based developer remains conservative until after the presidential power transition.
“We will adopt a conservative strategy this year until we have gained better knowledge of the incoming administration’s policy,” chairman Lai Cheng-yi (賴正鎰) told a media briefing.
New construction projects could grow 5 percent to NT$820 billion (US$24.33 billion) this year from last year, as some peers are likely to launch new home projects now that the presidential election is over, said Lai, who is also the chairman of the General Chamber of Commerce (商業總會).
Shining is to focus on developing small, affordable apartments with one to three bedrooms in New Taipei City’s Banciao (板橋), Sinjhuang (新莊), Tamsui (淡水) and Sanchong (三重) districts, where housing transactions were relatively active last year, Lai said.
As self-occupancy demand is expected to underpin the market, Lai said that it would be better to shy away from building large expensive housing units.
New apartments average NT$400,000 per ping (3.3m2) in those areas except Banciao at NT$500,000 per ping, Shining assistant manager Fang Wei-ming (方偉民) said.
Shining also plans to roll out a long-standing urban renewal project in Taipei’s Wanhua District (萬華) in the fourth quarter after settling pricing and cost details, Lai said.
Expectations of price corrections could squeeze profitability for the renewal project and the developer prefers to practice patience.
New houses in Wanhua used to start at about NT$700,000 per ping, but could drop to NT$600,000 per ping, Lai said.
“The company has to cut costs to stay profitable, if it cannot secure favorable building terms,” Lai said, adding that developers usually derive 30 to 40 percent of profits from renewal projects.
Shining is willing to lower profit by 5 to 10 percent to facilitate transactions, but would not make greater concessions given the limited supply of land and sufficient liquidity, Lai said.
In addition, Shining plans to develop service apartment projects and office buildings in China this year costing NT$12.2 billion, Lai said.
Its Chinese clientele includes Fan Bingbing (范冰冰), an actress and television producer.
Fan bought a two-story villa measuring 1,049m2 in Qingdao, Shandong Province, Lai said, refusing to reveal further transaction details.
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