Ruentex Development Co (潤泰創新), Taiwan’s major supermarket operator and property developer, plans to sell two plots of land in downtown Taipei later this month to eliminate some inventory and better utilize its capital, auction organizer Savills Taiwan Co (第一太平戴維斯) said yesterday.
The bidding, scheduled for Sept. 29, will add heat to the property market this month, which will see the auctions of real-estate asset trusts (REAT) issued by Cathay Life Insurance Co (國泰人壽) and Shin Kong Life Insurance Co (新光人壽), among other planned transactions.
One plot, measuring 140.06 ping (463.01m2) on Yanping S Road near the Taipei Railway Station, has a floor price of NT$490.21 million (US$16.82 million), or NT$3.5 million per ping, Savills Taiwan said.
The other plot, located near the Ximen MRT Station on Changsha Street, measures 35.09 ping and has an asking price of NT$124.57 million, or NT$3.55 million per ping, the auction organizer said.
“We are optimistic the objects will draw strong interest from medium-sized construction companies and hoteliers after Ruentex Development made pricing concessions of more than 12 percent this time,” Savills Taiwan senior manager Chiu Yi-ping (邱奕平) said by telephone.
Ruentex Development last year unsuccessfully tried to sell the two plots of land at NT$4 million per ping, but the ongoing financial market turbulence would not weigh on the auction given the low entry requirements and high floor area ratio, Chiu said.
The larger plot could be turned into a luxury housing project within a year-and-a-half since it has already secured a building permit, he said, while the smaller plot is ideal for a boutique hotel or retail floor space like buildings nearby to capitalize on the influx of Chinese tourists.
Ruentex Development, which generates 78 percent of its total revenue from general merchandise retailing, prefers larger development projects and would like to make a profit on the plots it purchased a few years ago, Chiu said. He declined to comment on Ruentex Development’s potential gains.
The company is a member of Ruentex Group (潤泰集團), the major shareholder of Ruen Chen Investment Holding Co (潤成投資) which recently acquired Nan Shan Life Insurance Co (南山人壽) from American International Group Inc.
Ruentex is just one of several financial institutions aiming to cash in on their real-estate investments in Taipei this month.
Cathay Life plans to auction a securitized building on the intersection of Dunhua S Road and Keelung Road tomorrow, while Shin Kong Life is scheduled to sell a REAT property on Dunhua S Road on Friday next week. The former has a floor price of NT$6.34 billion and the latter NT$5.7 billion, representing premiums of at least 65.53 percent and 85 percent from securitized costs at NT$3.83 billion and NT$3.08 billion respectively, according to auction data.
In addition, China Bills Finance Corp (中華票券) has asked international property consultancy firm DTZ to auction its headquarters building on Sept. 28.
The building sits on a 329-ping plot of land with an asking price of NT$2.68 billion, DTZ said.
Major domestic life insurers, including Cathay and Shin Kong, have voiced plans to take part in the biddings to better utilize idle funds.
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