Taiwan insurance giants eye overseas property investments
Taiwanese insurers now invest in local property; they will in future be given limited scope to purchase overseas buildings
As you pass through Taipei's major business districts, it is common to see office buildings adorned with the names of insurance companies. Indeed, about half of the grade-A office buildings in the city are owned by domestic insurers, which would be an extraordinary level in any other market.
Taiwanese insurance companies are the major buyers of domestic commercial real estate, accounting for about 40 per cent of turnover in the past few years.
But this situation is set to change. This month's announcement by the Taiwanese Insurance Bureau permitting overseas real estate investments for the first time has opened up the possibility of forays into the global real estate investment market as the insurers look to diversify from the overcrowded domestic market and find better returns for their significant capital base.
So can we expect a wealth of capital flow into Hong Kong and other major world cities?
The Taiwanese commercial real estate market could certainly be described as "steady" and a long way from the more volatile nature of certain other Asian markets. And for an industry such as insurance, "steady" is clearly good.
Not surprising, then, that Taiwanese insurance companies have long been active in buying commercial properties on the island with their percentage allocation to real estate pretty constant, hovering at around 4 per cent of their total invested capital since 2006.