The commercial property market may see an increase in trading volume after the Financial Supervisory Commission (FSC) on Thursday lifted the property investment bans on domestic life insurers, real-estate analysts said yesterday.
The return of life insurance companies may invigorate the property market for the rest of the year, as transactions chilled significantly in the first half due to their absence, analysts said.
More than NT$40 billion (US$1.33 billion) worth of commercial properties, notably the CTBC Financial Holding Co’s (中信金控) headquarters building in Taipei’s Xinyi District (信義) and superfices rights for two state-owned land plots, will be put on the market later this year.
“Following auctions of major properties recently falling through, the removal of the property investment ban on life insurers would inject much-needed capital into the market,” said Joseph Lin (林俊銘), managing director of CB Richard Ellis Ltd’s (CBRE) local unit, adding that the easing would help life insurers better utilize idle funds.
On Thursday, the commission said it had given its consent to plans by Nan Shan Life Insurance Co (南山人壽), Taiwan Life Insurance Co (台灣人壽) and Transglobe Life Insurance Inc (全球人壽) to resume property investments.
The commission plans to extend the approval to Fubon Life Insurance Co (富邦人壽), Shin Kong Life Insurance Co (新光人壽) and CTBC Life Insurance Co (中信人壽) later this week, the commission.
Cathay Life Insurance Co (國泰人壽) and Hontai Life Insurance Co (宏泰人壽) may enjoy the same treatment once they file applications, the commission said.
In November, the FSC banned life insurers from property investments after steeply raising investment requirements earlier to rein in commercial property price hikes.
The commission said life insurers must meet the 2.875 percent yield threshold to acquire real estate properties unless they are intended for self-occupancy.
Savills Taiwan Ltd (第一太平戴維斯) general manager Gordon Kao (高銘頂) said insurers must comply with the requirement to avoid similar bans. He suggested the government provides stronger incentives in a bid to guide insurance funds to public construction projects.
The eight insurers can raise property stakes by an extra NT$100 billion, but can find few investment options.