Hong Kong-based Arch Capital Property Advisors has spread its investment wings into Taiwan’s commercial sphere, acquiring the Taimall Shopping Center in Taoyuan for about NT$13.8 billion ($450 million) on behalf of an an unidentified institutional investor, who partnered with Taiwanese investment trust Millerful REIT No. 1 on the deal.
Taimall, the largest shopping center in the Taoyuan area, has a total gross floor area of around 100,000 square metres (1.76 million square feet) and has more than 300 retail tenants. The mall also has a theater, an entertainment center and a small sports complex.
Grabbing a Premium Asset in an Emerging Location
Arch Capital Property’s managing director James Chou, said his company saw in the deal “a rare opportunity to acquire an established premium retail asset offering stable income and sustained revenue growth potential over the longer term.”
Arch Capital Property acted as the investment advisor for the institutional investor on the deal and will now be in charge of the management and performance of the mall.
Millerful, which is listed on the Taiwan Stock Exchange, has a portfolio largely focused on Taiwan’s commercial sector, and has plans to buy more malls, office buildings and hotels on the island. S&P Global Ratings earlier this year affirmed its A+ long-term credit rating for Millerful, saying the firm would generate a relatively stable operating cash flow and keep its debt at a manageable level.
Chou said the growing population of Taoyuan — the site of Taiwan’s international airport — as well as the “concentration of high-tech and manufacturing companies in the vicinity” ensures an extensive customer base for the mall “that will continue to underpin stable and sustained revenue growth for the future.”
Arch Tries Out Taiwan Retail
Richard Yue, the CEO of Arch Capital Property’s parent, Arch Capital Management, said the investment “fits well with our client’s core investment strategy and portfolio” and that it represents “the largest participation in an investment property by a foreign institutional investor in Taiwan in recent years.”
Before the Taimall acquisition, Arch Capital’s investment portfolio in Taiwan had consisted entirely of a joint-venture residential project comprising 270 homes, which is currently under development.
Arch Capital targets “off-market” real estate acquisitions across China and Asia Pacific for a number of global institutional investors. It has $1.4 billion of assets under management and $12 bill in gross development value under management, according to its website.