IOI Properties Group buying 37% stake in Taipei 101 owner for RM2.74b

The Taipei 101 building is seen before Earth Hour in Taipei March 31, 2012. Earth Hour, when everyone around the world is asked to turn off lights for an hour from 8.30 p.m. local time, is meant as a show of support for tougher action to confront climate change. REUTERS

KUALA LUMPUR: IOI Properties Group Bhd (IOIPG) has sprung a surprise with the proposed purchase of a 37.17% stake in Taipei Financial Center Corp, which owns Taipei 101, for RM2.74bil.

It said on Friday it had into conditional share sale agreements to acquire 546.46 million shares of NT$10 each representing 37.17% interest in Taipei Financial Center Corporation, which owns the Taipei 101 building.

“The total cash consideration for the proposed acquisitions is approximately NT$25.14bil (RM2.74bil),” it said.

IOIPG said the purchase consideration Taipei 101 -- one of the world’s tallest buildings and a landmark skyscraper -- will be funded through bank borrowings and/or internally generated funds.

“IOIPG is optimistic on the prospects of the proposed acquisitions as it offers an investment opportunity in a well-located and well-tenanted landmark building in the central business district of Taipei. Taipei 101 is connected to the MRT Xinyi Line with an occupancy rate of 96%. Taipei 101’s notable tenants include Google Taiwan, Taiwan Stock Exchange Corporation, KPMG and BNP Paribas. 

“The proposed acquisitions also offer an opportune time to acquire a prized iconic building with stable rental income and potential rental accretion. Furthermore, there is potential capital appreciation due to the strategic location of the property,” it said.

IOIPG said the net book value of the property (Taipei 101) based on the latest audited financial statements of TFCC for the financial year ended Dec 31, 2013 was NT$39.6bil. No valuation was carried out on the property. The property is currently charged to Taipei Fubon Bank,” it said.

It said Taipei 101 is one of the world’s tallest buildings and a landmark skyscraper located at the centre of the central business district of Xinyi District in Taipei, Taiwan. 

It added the property mainly consists of a shopping mall and office tower offering top quality office space to tenants such as Taiwan Stock Exchange, multinational financial institutions, major accounting firms and mainland Chinese enterprises. 

Taipei 101 comprises 101 floors above ground and five floors underground with its main building occupying on 30,277 square metres of land. 

IOIPG said the shopping mall and office tower opened on Nov 14, 2003 and Dec 31, 2004 respectively. 

The property’s gross floor areas of office space and retail are approximately 2.32 million square feet (sq ft) and 0.84 million sq ft respectively. 

Its net lettable areas for retail and office space are approximately 0.41 million sq ft and 1.95 million sq ft respectively. The shopping mall is fully tenanted and the occupancy rate for office is approximately 96%. 

The lease on the property is for a duration of 70 years. Upon expiry of the lease period, the lease will be renewed for another period of up to 20 years (further renewal is permissible). 

The current average rental per month for retail and office space are approximately NT$420 per sq ft and NT$77 per sq ft respectively. 

Under the corporate exercise, it is purchasing 55 million ordinary shares of NT$10 each representing 100% interest in Ting Gu Development Co Ltd from Golden Shine International Holding Ltd for a consideration of NT$3.61bil. 

Ting Gu holds 78.45 million ordinary shares of NT$10 each representing 5.34% interest in TFCC;

IOIPG is also purchasing of 4.41 million ordinary shares of NT$10 each representing 0.3% interest in TFCC from Ting An Ltd for a consideration of NT$200mil;

IOIPG also purchased 385.976mil ordinary shares of NT$10 each representing 26.25% interest in TFCC held by Ting Ji Development Co Ltd for a consideration of NT$17.76bil; and

IOIPG is purchasing 77.624mil ordinary shares of NT$10 each representing 5.28% interest in TFCC held by Ting Li Development Enterprises Co Ltd  for a consideration of NT$3.57bil.