Taiwan Life Insurance Co (台灣人壽) won the auction for Chinfon Commercial Bank’s (慶豐銀行) former headquarters building for a record NT$2.56 billion (US$80.3 million), 75.34 percent higher than the floor price of NT$1.46 billion, auction organizer and real estate service provider Savills Taiwan (第一太平戴維斯) said yesterday.
The 10-story building, sitting on a land plot of 307 ping (1,015m²) on Nanyang Street near Taipei Railway Station, drew 12 bidders, Savills Taiwan said, declining to specify the companies. Taishin Financial Holding Co (台新金控) was one of the bidders as it made known its intent to join the bid in a stock exchange filing on Monday.
The bidding price translates into a new record real estate price of NT$8.339 million per ping, compared with NT$5.29 million per ping for a property transaction nearby in May, the organizer said.
The auction result further solidified demand for commercial properties despite the central bank’s effort to cool down soaring property prices in the capital city.
“Property prices in prime areas may rise further given limited supply and solid demand,” Savills Taiwan general manager Gordon Kao (高銘頂) said.
Kao said the trend may become more evident after Taiwan’s trade pact with China — the Economic Cooperation Framework Agreement (ECFA) signed in late June — starts to impact the market.
Taiwan Life plans to turn the building, which has a floor space of 2,417 ping, into a shopping complex with a food court and restaurants, the Taipei-based insurer said in a statement yesterday.
“There is no need to worry about a lack of customers given the daily throngs of students and working people in the area,” a company official said, asking not to be named.
The insurer expects to collect at least NT$7 million in rental income per month from the building, or a 3.2 percent return on the investment.
Including the latest investment, the company’s real estate investments total NT$15.33 billion, accounting for 6.01 percent of its NT$254.7 billion in working capital.
Taiwan Life said it planned to pump at least NT$10 billion more into real estate investment.
Debt-ridden Chinfon Commercial Bank will put another batch of properties up for sale next week, including its stake in the Taipei Financial Center (台北金融中心) which owns the Taipei 101 building.
Chinfon was taken over by the government’s Central Deposit Insurance Corp in September 2008 on instruction from the Financial Supervisory Commission.
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