Hey-Song to auction off Taipei residential plot

LAND FEVER::The bidding coordinator expects to see interest from major developers and life insurance firms because of the scarcity of land in good locations in Taipei

By Crystal Hsu  /  Staff reporter

Wed, Aug 01, 2012 - Page 14

Shares in beverage supplier Hey-Song Corp (黑松) rose 2.93 percent yesterday, stronger than the TAIEX’s 1.56 percent gain, in the wake of the company announcing plans on Monday to auction a plot of land in downtown Taipei that may generate hefty profits.

The 1,345 ping (4,446m2) residential plot on Civic Boulevard next to the Breeze Center (微風廣場) has a floor price of NT$5.79 billion (US$192.87 million), or NT$4.3 million per ping, coordinator DTZ said.

The land could boost Hey-Song earnings by NT$9.04 per share, if sold at the asking charge, company data showed, allowing it greater financial muscle to develop a residential complex in suburban areas of New Taipei City (新北市).

Shares in Hey-Song have jumped 52.38 percent this year, outpacing the main index’s 2.81 percent increase, fueled by the divestment plan of the land plot, which was formerly leased to Breeze Center as parking lots.

The company pushed through the planned sale at last month’s general shareholders’ meeting over the protest of Breeze Center, which owns a considerable stake in Hey-Song and proposed developing the plot into commercial property.

DTZ general manager Billy Yen (顏炳立) expects there to be sharp competition among major domestic developers and life insurance companies as well as foreign funds for the auction, given the scarcity of land in good locations.

“There is always demand for land in popular locations despite the sluggish housing market,” Yen said. “Properties with permanent ownership should be more attractive than just leaseholds.”

Sinyi Realty Inc (信義房屋) researcher Tseng Chin-der (曾敬德) said the plot is priced high, but may find buyers given the current low interest rates and liquidity excess.

“Prospective buyers could turn the plot into luxury housing projects priced at NT$2 million per ping or more to cover acquisition costs,” Tseng said.

The bidding is set for September or early October, DTZ said.