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Shin Kong offers NT$3.93 bil. for properties

The Central Deposit Insurance Corp. (CDIC) yesterday auctioned off the first-floor space of Asia Plaza as well as five nearby blocks of land to Shin Kong Life, which paid NT$3.929 billion for all of them.

"We're satisfied," said CDIC officials upon hearing the final outcome, which was around a 60-percent premium above the base price of NT$2.47 billion.

Asia Plaza, formerly Daya Department Store, is right across from the Taipei Railway Station. The building's first-floor space has a total area of 860 pings (a ping is 3.3 square meters).

The property itself was offered for NT$2.45 billion, or about NT$2.85 million a ping. It has about 260 pings of public utility space, including for elevators, escalators and machine rooms.

Yesterday, Shin Kong paid NT$3.909 billion for the first-floor space, translating into a unit price of NT$4.54 million.

According to sources familiar with the sale, Shin Kong was one of five bidders, who might also have included the Lung Yen Group and Kuo Tai-chiang, chairman of Cheng Uei and brother of Terry Gou, chairman of Hon Hai.

According to experts, Shin Kong's purchase translates into an investment yield of about 2.4 percent, based on a potential rent of NT$5 million a month (NT$60 million a year).

The 2.4-percent yield is above the 2.125-percent minimum threshold that is required of insurers seeking to invest in real estate.

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