General Electric Co's property arm, which has more than US$62 billion in assets worldwide, plans to invest US$300 million in Taiwan in the next two years as the company diversifies its Asian portfolio.
Taiwan's property market has become attractive relative to Tokyo, where rising office prices have reduced return on investment, said Tomoyuki Yoshida, head of Japan real estate operations for GE Real Estate Corp. The nation's low borrowing costs are also a plus.
"Japan is too stable," Yoshida said in an interview with Bloomberg news. "Hong Kong's market is a little too hot. Taiwan is one of the best countries to enter in Asia. You can enjoy arbitrage."
Grade A office space in Tokyo's central business districts offers a return on investment of 3.1 percent, while similar buildings in Taipei yield as much as 5.9 percent, according to a report by Jones Lang LaSalle Inc.
GE Real Estate's Japan office, which also oversees investment in Macau and Hong Kong, bought its first property in Taiwan on Nov. 30. It paid NT$684 million (US$21 million) for a 12-story office building in Taipei from Hocheng Group Corp, a bathroom and kitchen equipment manufacture.
GE Real Estate will initially focus on office and retail properties, Yoshida said, with posssible condominium development.
The value of office buildings in Taipei gained 20 percent in the past year as acquisitions by investors drove up prices, according to DTZ Debenham Tie Leung, a property consulting company.
Grade A office sites are buildings no older than 25 years with total leasable floor area of more than 10,000m2 and more than 800m2 per floor, according to Jones Lang LaSalle.
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