Wei Chuan Foods Corp (味全), operated by Ting Hsin International Group (頂新集團), yesterday acquired a 15,828.31 ping (52,325m²) plot of land in Sanchong City (三重), Taipei County, for NT$10.168 billion (US$315.6 million), the highest single bid in the nation’s history of government-held property auctions, the company and domestic realtors said yesterday.
The closing price represented a premium of 37.4 percent over its floor price of NT$7.4 billion.
The land was previously owned by Shin Yen Textile Co (新燕紡織).
Wei Chuan said in a statement that it planned to either develop the land itself or in cooperation with strategic partners, after considering its financial viability and investment risks.
“The deal represents a thumbing of the nose at the central bank,” which has sought to curb skyrocketing property prices in the Greater Taipei area by raising interest rates last month, Evertrust Rehouse Co (永慶房屋) said in a press statement.
The deal also posted a record-high unit price for the satellite city’s industrial land at NT$642,400 per ping, far higher than the average unit price of about NT$200,000 per ping in the area, H&B Realty (住商不動產) said in a press statement.
Wei Chuan was the only bidder at the auction after several interested buyers, such as Kindom Construction Corp (冠德建設), Huaku Development Co (華固建設) and Highwealth Construction Corp (興富發建設), failed to show up.
That was perhaps why Wei Chuan misjudged the competition and placed such a high bid, Chiu Tai-hsuan (邱太煊) of Taiwan Realty (台灣房屋) said in a press statement.
However, it also demonstrated Wei Chuan’s confidence in the land’s urban renewal potential, with its plan to build residential housing, he said.
Chiu estimated that Wei Chuan would still enjoy a lucrative return of more than NT$9 billion from the plot of land if its planned residential project, with total floor space of between 51,000 pings and 59,000 pings, could be sold for NT$400,000 per ping at a construction cost of less than NT$1.4 billion.
Proceeds from the land sale will be used to repay Shin Yen’s creditors, including Chang Hwa Commercial Bank (彰化銀行) and Wei Chuan, both of which are entitled to recover their previous loans of NT$5.22 billion and NT$1.34 billion respectively to the textile company, according to its auctioneer, Taiwan Financial Asset Service Corp (台灣金服).
Shares of Wei Chuan fell 3.3 percent to NT$38.40 in Taipei trading yesterday. The news of the land purchase came before the stock market closed for the day.
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