A group of Chinese businesses from Fujian Province yesterday signed a NT$1.32 billion (US$13.1 million) deal with Taichung-based property developer Shining Group (鄉林集團) to purchase 12 luxury residential units and one commercial unit in central Taiwan, marking the nation’s first real estate investment by Chinese businessmen after the March 22 presidential election.
Including the Desire Star (China) Tea Industry Co (星願中國茶葉公司) and Greattown Estate (名城企業集團), the 10 Chinese investors will acquire the pre-sold property units, each exceeding 202 ping (666m2), for more than NT$88 million apiece, a Shining official said yesterday.
The investment came after a delegation of nine Chinese business tycoons visited several places in Taiwan last month to gain first-hand information about the local property market.
During their trip, they were hounded by the local press and photographers wherever they went, but finally completed no firm deals.
“We have no doubt that these Chinese investors can really place their money in Taiwan’s real estate market because they are businesses registered in either Hong Kong or Singapore, which enables them to circumvent current cross-strait legal restrictions,” said Fred Ying (應致德), vice president of Taichung-based construction firm Shining Group (鄉林集團), in a telephone interview.
Desire Star (China) Tea Industry booked the pre-sold commercial unit as the company plans to establish a flagship store to distribute its tea in Taiwan, Ying said.
Shining is still in discussions with its customers about the details of the purchase, but the deal signaled a bullish atmosphere in the nation’s property market, Ying said.
“The growth of Taiwan’s property market has been suppressed for so long because of the tense cross-strait relationship in the past,” Ying said. “We expect more transactions will come after the new administration takes office on May 20, as Chinese investors are likely to invest in Taiwan’s office buildings, shopping malls, recreational parks and hotels in a bid to diversify their assets.”
The expected capital inflows from Chinese businessmen have recently invited warnings from local scholars that the nation’s property was already overpriced by some 30 percent and a property bubble was emerging in the Taipei market.
Such inflows are also likely to further worsen the housing affordability problem in Taiwan at a time when most middle-income families have experienced slow growth in annual disposable incomes in the past few years, they said.
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