Mercuries Life Insurance Co (三商美邦人壽保險) yesterday sold partial floors of an office building in Taipei’s prime Xinyi District (信義區), but failed to secure buyers for other spaces, as investors turned hesitant amid monetary tightening and economic uncertainty, auction organizer CBRE Taiwan (世邦魏理仕台灣) said.
Mercuries Data Systems (三商電腦), an affiliated information system integrator, won 14.28 percent of the total office spaces for sale, namely 400 ping (1,320m2) of office spaces and six parking spaces for NT$283 million (US$8.94 million), CBRE Taiwan said.
That translates into NT$730,000 per ping, giving the buyer a rental yield of more than 3 percent at NT$2,000 per ping per month, the consultancy said.
Mercuries Life has since August offered to sell eight floors in the 26-year-old building in seven bids for an overall asking price of NT$2.3 billion to ease a cash strain after incurring huge investment losses. It sold an entire office building in Neihu District (內湖) for NT$8.35 billion in July for similar reasons.
The latest auction came after the central bank last month raised interest rates for the third time this year, explaining why the other 6 bids fell through, CBRE Taiwan said.
The building near Taipei 101 has 22 floors aboveground and five basement floors.
Real demand for office spaces remains strong, especially in central business areas, CBRE Taiwan said, pointing out that rent for Grade-A offices last quarter gained 3 percent in Taipei, with Xinyi District posting a 4 percent advance.
Take-up rates dropped from 4,203 ping three months earlier to 2,806 ping, because demand for Grade-B offices declined, the consultancy said.
Negative economic twists would inevitably weigh on investment interest in the near term, but objects in popular locations would first come out of the woods, CBRE Taiwan said.
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