Hengdeli Purchased 534 Square Meter Property On Zhongxiao East Road At Auction#
Anticipating a flood of mainland Chinese tourists when individual travel restrictions to Taiwan are lifted in 2011, Hengdeli, China's largest watch retailer, has purchased a 534 square meter property on Taipei's Zhongxiao East Road, one of the city's major shopping areas. Since restrictions for mainland tour groups were loosened last year, Taiwan has seen an influx of mainland Chinese tourists, with around 1.09 million visiting in the first eight months of this year alone, a 74% rise over 2009.
Hengdeli, like other retailers in Taipei, expects these figures to rise even further in the next year, and is rushing to gain a stronger foothold in preparation for more mainland tourist-shoppers.
According to Focus Taiwan, Hengdeli's Taiwan branch acquired the new property on Zhongxiao Road from EnTie Commercial Bank at auction for US$29.3 million. Under the sale agreement, EnTie will continue to rent the property from Hengdeli for 18 months, giving Hengdeli enough time to prepare the space for an expected rush of spring/summer 2012 tourists from mainland China.
The rental income will give Hengdeli a rate of return of 0.96 percent, one of the lowest in the bustling shopping area where the average rate of return is closer to 2 percent, said Jessica Hsu, a spokeswoman for real estate brokerage firm H&B Business Group.
As Bright Lee, spokesman for real estate agency Evertrust Rehouse Co., told Focus Taiwan, Hengdeli has been looking to buy a new property since last year to cash in on what it expects will be a lucrative surge in cross-straits tourism. Its new location on Zhongxiao Road will increase the number of Hengdeli locations in Taiwan to five.