Several hotels changed hands this quarter and more are expected to pull out of the market as an imbalance between supply and demand increases.
Well Glory Development Co (志嘉建設) has decided to auction off a forthcoming commercial property near Chiang Kai-shek Memorial Hall in Taipei after previously seeking to turn it into a mixed-use building with a hotel and a postpartum care center, property consultancy Colliers International Taiwan (高力國際) said.
Well Glory set the minimum price at NT$1.28 billion (US$42.36 million) for the building that has 2,000 ping (6,612m2) of floor space on a state-owned plot of land for which the developer won a 50-year lease in 2013, the broker said.
The superfice cost Well Glory NT$960 million, a then-record high in the area.
The price translates into NT$600,000 per ping, compared with NT$1.2 million for objects with permanent ownership in the vicinity, the bidding organizer said.
Prospective buyers could view it as a lease that costs NT$1,700 per ping per month, much lower than the market rate of NT$2,400 per ping for new commercial space in the neighborhood, the broker said.
Well Glory also entertained the possibility of building luxury apartments on the plot, but sluggish property sales prompted it to drop the plan.
The auction is slated for Oct. 18.
Lealea Hotels and Resorts Co (力麗觀光) on Monday sold a property, Lealea Garden Hotel in Sun Moon Lake (力麗哲園月潭館), to an affiliate for NT$325 million to raise cash for a new five-star facility in Nantou County, the firm said in a filing with the Taiwan Stock Exchange.
“The industry’s current correction allows Lealea to expand at lower costs as it is seeking to double its size in three years,” company chairman Tsai Chung-i (蔡宗易) said earlier.
The local hotel chain owns 12 properties, including the new Westin Yilan Resort (宜蘭力麗威斯汀度假酒店), a build-operate-transfer project with the local government.
Earlier this quarter, Singaporean private equity firm AIP sold a 42 percent stake in Howard Serviced Suites (福華旅邸) on Taipei’s Changchun Road to Precious Jade Construction (璞真建設) for NT$2.7 billion, Savills Taiwan Ltd (第一太平戴維斯) said.
The two are to apply for an urban renewal license for the old hotel, the broker said.
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