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Taipei slashes Xinyi's A25 plot royalty by 20 percent

TAIPEI, Taiwan -- The Department of Finance (DOF, 北市財政局) and the Taipei City Government yesterday announced that the A25 plot, the sole remaining virgin land parcel residing in the coveted Xinyi District (信義區) will have its land-use royalty slashed by 20 percent following three previous failed auctions that concluded without resolution.

The announcement, published in a bulletin yesterday, stated that the royalty will be slashed by 20 percent from the previous NT$21.6 billion to NT$17.28 billion, in hopes of attracting bids from prospective developers.

The sprawling 5,425 ping A25 plot is the sole remaining undeveloped land parcel devoid of infrastructure such as utilities and plumbing.

The DOF stated that if the next auction for the A25 plot is met with a tepid response and fails to conclude resolved, auctions will be temporarily suspended for the future. Reports indicate that participants balked at the exorbitant starting prices asked by the DOF during previous auctions.

In addition, the DOF stated that A25's next auction is scheduled to take place at around the end of June, clearing the winning developer to begin seeking contracts with partners in July or August at the latest.

Meanwhile the A25 plot is currently serving as a parking lot, surrounded by high profile shopping and accommodation attractions including the Eslite (誠品), and Shin Kong Mitsukoshi (新光三越).

The A25 plot was put on auction last August, in the form of a build-operate-transfer (BOT) contract with royalty priced at NT$18 billion over 70 years, which concluded without resolution. The plot was put on auction again this year in March, offering a 50-year BOT contract priced at a raised price of NT$24 billion, which drew little interest from prospective bidders. The latest auction took place at the end of April, with royalty priced at NT$21.6 billion, also concluding without resolution.

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