Fubon Life Insurance Co (富邦人壽) yesterday won the superficies right to a plot of land in Taipei’s prime Xinyi District (信義) that will be turned into an integrated commercial property to generate rental yields, the company said in a statement.
The insurer won the bid for the 5,451 ping (18,020m2) plot near the intersection of Songgao Road and Songyong Road with its offer of NT$17.29 billion (US$577 million), very close to the floor price of NT$$17.28 billion, data showed.
Three previous auctions for the plot of land failed to attract any bidders. Yesterday’s auction came through after the Taipei City Government lowered its asking price, while raising the capital requirements for interested firms. Fubon Life was the sole contender in the auction.
“The investment may generate rental yields of at least 4 percent after the project is completed given its central location,” Fubon Life said.
Despite the parlous premium, the offer was the third-highest on record for auctions of superficies rights, next only to an adjacent exhibition hall and the Taipei 101 building, said Michael Wang (王維宏), an account manager at Global Asset Management Co (全球資產).
Tightened yield requirements have slowed property investments by local insurers, which accounted for a majority of transactions in previous years, Wang said.
The deal could create 7,500 job opportunities and generate a rental yield of NT$227.4 million a year for the city government, Wang said.
The superficies right will last 50 years and is the third property investment by Fubon Life in the district where land supply is scarce.
The auction’s success was a boost of confidence in the property market in the light of unfavorable government policies that have depressed the commercial real-estate market, Evertrust Rehouse Co (永慶房屋) assistant manager Jeffrey Huang (黃增福) said.
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