The auction later this week for part of Taipei Financial Center (台北金融中心) in downtown Taipei is expected to affirm solid demand for commercial properties as some major life insurers have shown interest in the properties.
This is a stark contrast to decreased transactions for the nation’s residential real estate market after the central bank tightened credit measures in June in an attempt to stop the property market from overheating. Transactions of residential properties in Taipei slid 20 percent last month from a year earlier.
The Central Deposit Insurance Corp (中央存保) is scheduled to auction about 1,905 ping (6,300m²) of office space on different floors of the building owned by Chinfon Commercial Bank (慶豐銀行) on Wednesday, one week after selling the debt-ridden lender’s former Taipei headquarters building for a record NT$2.56 billion (US$80.3 million), 75.34 percent higher than the floor price.
Major domestic life insurers, including Cathay Life Insurance Co (國泰人壽), Fubon Life Insurance Co (富邦人壽), Shin Kong Life Insurance Co (新光人壽) and Taiwan Life Insurance Co (台灣人壽) have expressed interest in the building located at the intersection of Nanjing E Road and Dunhua N Road near Taipei Songshan Airport, local media reported.
The Central Deposit Insurance set the floor price at NT$1.24 billion, or 10 percent off the property’s appraised value.
Jessica Hsu (徐佳馨), a researcher at H&B Realty (住商不動產), the nation’s largest real-estate broker by outlets, said the Grade-A office stake may draw a new high price given its prime location and relatively low public facilities ratio.
“The winning bidder will have no difficulty leasing out the stake that may yield 3 percent earnings in monthly rental income,” Hsu said.
She added the building was an ideal site for a headquarters for Taiwanese or Chinese companies wanting to take advantage of reduced bilateral tariffs following the signing of the Economic Cooperation Framework Agreement (ECFA) in June.
Last week, both Fubon Life and Taiwan Life expressed an interest in increasing their real estate investment but said scarce supply had curtailed their attempts.
Taiwan Realty Co (台灣房屋) head researcher Chiu Tai-hsuan (邱太煊) said the stake was undervalued and the auction may show its real worth at about NT$1.73 billion as closer trade ties and increasing air traffic across the Strait have boosted real estate prices near the airport.
Meanwhile, the residential property market continues to slide.
The number of residential units transferred in Taipei City totaled 5,085 last month, down 23.2 percent from the same period last year, according to the municipality’s statistics.
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