‘Failed’ Taipei mall on sale for NT$38bn

LONG-TERM THINKING::A manager at Cushman & Wakefield suggested that buyers could wait until 2031 and tear down the Living Mall in favor of an urban redevelopment project

By Crystal Hsu  /  Staff reporter

Fri, Aug 17, 2018 - Page 12

Core Pacific City Co (京華城) has set a floor price of NT$38 billion (US$1.23 billion) for its gigantic central Taipei retail complex, also branded “Living Mall,” targeting buyers at home and abroad, auctioneers said yesterday.

It is the largest private property available for sale in recent decades as most high-profile transactions, including Taipei 101, Regent Taipei (台北晶華酒店), Taipei Nan Shan Plaza (台北南山廣場) and Taipei Garden Hotel (台北花園大酒店) are on leasehold contracts for 50 to 70 years, Cushman & Wakefield Inc told a tender briefing.

“It is not the best timing to sell properties these days, so I recommended a price concession and the owner accepted it,” Cushman & Wakefield Taiwan general manager Billy Yen (顏炳立) said, adding that the property could sell at a much higher price in a boom market.

Core Pacific Group (威京集團), which owns the mall and interests in the civil engineering, construction, petrochemical, financial and entertainment sectors, has decided to dispose of the Living Mall, calling it “a failure,” Yen said.

The mall sits on a 4,986 ping (16,483m2) land plot in the city’s Songshan District (松山) with floor space of 62,000 ping on 12 floors above ground and eight below.

The developer took out a syndicated loan of NT$12 billion two decades ago to finance construction of the L-shaped complex and the debt is due to mature next year, sources said on condition of anonymity.

Prospective buyers could acquire the property as a whole for NT$38 billion or in four lots for a total of NT$51.7 billion, with the former option preferred and carrying incentives, the property consultancy said.

Land use for the complex is limited to the development of international tourist hotels, office space and department stores, meaning that buyers who wish to develop the property into luxury residential property would have to file rezoning requests.

That would generate rental incomes of 3.6 percent based on average rent prices of NT$2,500 per ping in Taipei, Yen said, adding that the figure is NT$5,000 in the adjacent Xinyi District (信義).

Winning bidders could also wait and file for urban redevelopment in 2031, while gaining bonus floor space in the meantime, Yen said, adding that the Living Mall would be an ideal investment for domestic life insurance companies that want to increase their real-estate stakes and trim idle cash.

Foreign investors in Singapore, Hong Kong and China have expressed strong interest, and the consultancy has set the auction for Dec. 12 to accommodate their fund relocation needs, he said.

Foreign investors would face capital gains taxes of 35 percent to 45 percent if they resell the property within two years of purchase.