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Taiwan insurer buys prime property in London

Publication Date : 21-08-2014

 

Cathay Life Insurance yesterday announced that it had purchased a prime property in London, marking the first acquisition by a Taiwanese life insurance carrier since the Financial Supervision Commission's (FSC) approval of overseas real estate investments for the sector.

Reports indicate that Cathay Life Insurance purchased the Woolgate Exchange, a commercial office and retail high-rise building from a partnership comprised of Canada's Ivanhoe Cambridge and Texas-based TPG Capital for 311 million pounds, or about NT$15.8 billion (US$527 million).

According to the company, the newly acquired London property is currently at 100 per cent rental capacity, and expected to yield rental returns exceeding 5 per cent, and that its purchase conforms fully with profitability requirements for overseas real estate investments stipulated by the FSC.

The Woolgate Exchange spans across nine floors and 9,869 ping (a ping is approximately 3.306 square meters), with Cathay Life estimated to have spent about NT$1.6 million per ping.

In addition, the company noted that the UK government and regulating bodies have furnished international investors with favorable taxation terms and transparent registration processes that meet the stringent requirements of the FSC.

Most notably, the company stated that the Jersey Property Unit Trusts (JPUT) is a tax efficient vehicle for holding interests in UK commercial real estate properties. The JPUT vehicle has numerous advantages such as transparency for income tax and exemption from British capital gains tax on the sale of the underlying property.

In addition, JPUT as an investment instrument offers its owner a degree of flexibility as the underlying property may be transferred free of any stamp duty or land tax charges if the transaction is structured as a sale of JPUT units rather than as a conveyance of the actual underlying property.

Cathay Life Insurance is an arm of the Cathay Financial Holdings, one of Taiwan's largest financi

 

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