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Old Posted Aug 4, 2013, 2:20 PM
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Insurance giants clash in bid for Xinyi parcel

By Ted Chen, The China Post
July 25, 2013, 12:09 am TWN

TAIPEI, Taiwan -- A full cast of Taiwan's leading heavyweight insurance carriers are expected to mobilize in contesting the bid for a prized land parcel located in Xinyi District prior to the Aug. 5 deadline, following the relaxing of regulations by the Taipei City Government, rendering involvement in the deal by insurance companies possible.

Known as A25, the Xinyi District land parcel spans 5,452 ping, and lies in the premium commercial zone adjacent to Songyong Road and Songgao Road.

Reports indicate that the A25 plot is set to be auctioned at a base bid of NT$18 billion, with the rights to operations transferred through a build-operate-transfer (BOT) project financing format.

According to terms stipulated by the Taipei City Government, the winning bidder must build a parking structure available for public use, and is prohibited from initiating housing or residential developments on the A25 plot. City government's terms also relaxed restrictions imposed on insurances companies, who may now bid on the plot. However, terms stipulate that an accompanying parking structure must be established, with its management responsibilities transferred to a third party through contractual or rental agreements with the insurance company.

Market commentators stated that based on previous outcomes of similar properties, the winning bid for the A25 BOT deal is expected to exceed NT$20 billion, with total development costs nearing NT$30 billion to NT$40 billion. In addition, the winning bidder is subject to annual rental payment of 3 percent of registered land value.

Market commentators stated that the five companies Cathay Life Insurance (國泰人壽), Nan Shan Life (南山人壽), Fubon Life (富邦人壽), Shin Kong Life (新光人壽), and China Life (中壽) as likely participants of the A25 bid. The companies are reported to be flush with cash, commanding over NT$10 trillion combined.
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