Shin Kong puts plot of land on sale

Shin Kong Life Insurance Co (新光人壽) is scheduled to hold a pre-sale briefing on Thursday as the nation’s third-largest life insurer will host a public auction of a 1,180-ping (3,901m²) plot in Taipei on July 25.

The insurer set a floor price for the residential parcel located on Jianguo South Road near Daan Forest Park at NT$4.2 billion (US$138.2 million), it said in a statement published in the Chinese-language Economic Daily News and Commercial Times yesterday.

This means the land would be sold at a floor price of NT$3.6 million per ping, which is 32 percent higher than the NT$2.74 million per ping the insurer paid to the government through open bidding in 2006.

On March 2, 2006, Shin Kong Life outbid other domestic land developers to acquire the residential parcel of state-owned land for NT$3.37 billion.

If the upcoming auction goes as planned, the tract of residential land — the site of a former army club owned by the Ministry of National Defense — could reap a handsome profit of at least NT$830 million for Shin Kong Life.

Shin Kong Life’s decision to sell the plot of land came after the company’s board decided on Friday it would dispose of a total of 2,490 ping of residential land close to the Daan MRT station on the Muzha Line — which it acquired from the government in 2006 for NT$6.38 billion — over investment consideration, the company said in a filing to the Taiwan Stock Exchange on Friday night.

The insurer said it would use the proceeds to purchase office buildings and factory complexes in Neihu district to increase return on investment. Participants in the upcoming auction need to prepare a deposit of NT$500 million, it said in the statement.

When Shin Kong Life purchased the plots of land from the government in 2006, it attracted significant market attention as the two plots were then coveted by land developers, as they face the biggest green space in the city.

At the time, the insurer said it would build luxury residential buildings on the land with a sale price of NT$1 million per ping and intended to complete the project by the end of this year.

But the company’s board on Friday decided to change the plan amid expectations of high return from commercial building investments in Neihu, while incurring mounting investment losses in the local equity market during the first half of this year.