Shin Kong Life Insurance Co (新光人壽) yesterday sold the remaining stake in an office building which houses the Eslite Bookstore (誠品書店) on Dunhua South Road in Taipei, its first commercial property deal this year.
Former Cathay Financial Holding Co (國泰金控) vice chairman Tsai Chen-yu (蔡鎮宇) purchased 37 percent of the building — three floors above ground, including the storefront and three basement floors — for NT$8.8 billion (US$296.28 million), slightly higher than the asking price of NT$8.62 billion, Shin Kong Life said.
In September last year, Cathay Financial secured 63 percent of the shares in the building it helped construct 16 years ago.
The deal is the first involving life insurers since the Financial Supervisory Commission (FSC) tightened the sector’s property investment requirements in November last year and later introduced a temporary purchase ban to curb commercial property price hikes.
The property sale will generate NT$7.6 billion for the insurer, the main subsidiary of Shin Kong Financial Holding Co (新光金控), group spokesman Sunny Hsu (徐舜鋆) said.
“The move fell in line with the company’s attempt to revitalize its assets and boost shareholders’ interests,” Hsu said by telephone.
Shin Kong Financial plans to book its profits at the end of this quarter, Hsu said, since the life insurer is not listed on the local bourse.
Tsai Chen-yu, the younger brother of Cathay Financial chairman Tsai Hong-tu (蔡宏圖), has in recent years shifted his focus to real estate investments and has bought several properties in prime districts of the capital.
Evertrust Rehouse Co (永慶房屋), the nation’s largest real-estate agency by number of outlets, said the auction results brought timely relief to the commercial property market that may regain vigor from next month as the FSC is reportedly about to lift the purchase ban.
The purchase ban and tighter investment requirements do not apply to non-life insurance companies.
The building also houses other companies, including Shin Kong Commercial Bank (新光銀行).