State-owned Land Bank of Taiwan (土地銀行), the nation’s largest property lender, has inked a syndicated loan agreement to finance a long-awaited urban renewal project on a public housing complex in Taipei.
Seventeen domestic lenders are taking part in the syndicated loan of NT$12.09 billion (US$393.23 million) to redevelop a dilapidated complex near the Zhongxiao Fuxing MRT Station.
“It took 22 years for the parties involved to make the renewal project possible,” Land Bank chairwoman Joanne Ling (凌忠嫄) told a news conference.
The renewal project could bring about a “win-win” solution for the government, developers and lenders to revitalize idle assets, enhance building safety and stimulate the economy, Ling said.
The project sits on a 1,545 ping (5,107m2) plot of land — the former site of 374 apartment units, with 175 of them occupied by military people who had only superficies rights.
Over the years, developers and builders had sought unsuccessfully to remove resistance to the project, with one owner shot to death in February 2009 during the integration process.
Storefronts in the vicinity cost about NT$13 million per ping, suggesting huge profits for the renewal project, local media reports said.
Sanyuan Group (三圓建設) and Lung Ling Development Co (龍麟建設), which won the contract to carry out the project, said they plan to build mixed-used buildings on the site that will have 31 stories above ground and seven basement floors.
The first to fourth floors would be turned into retail space for rent and the sixth to 31st floors would be reserved for residential use, the companies said.
The project could generate total sales of between NT$30 billion and NT$40 billion, they said.
Deputy Minister of the Interior Hua Ching-chun (花敬群) and Deputy Minister of Finance Su Jain-rong (蘇建榮) joined the financing ceremony to demonstrate the government’s support for urban renewal.
The ministry, which owns 37.36 percent of the land, would get 1,400 ping of floor space after the construction is completed, Su said.
“The project sets a good example of how the government can guide private money to enable public construction without spending a dime,” Su said.
The syndicated loan allows Land Bank and its peers to lower their idle funds and generate interest rates of between 2.3 percent and 2.5 percent for five years, Ling said.
As of the end of last year, Land Bank had approved 111 urban renewal financing deals with total loans standing at NT$100 billion, Ling said, adding that it is reviewing 54 other cases, which could increase the overall figure by NT$56.8 billion.
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