Cathay Wuri HSR Commercial Building: Expected Completion by End of 2031, 17 Floors Above Ground and 3 Below

Cathay Life Insurance, a core subsidiary of Cathay Financial Holding, announced today (20th) that its board of directors has approved awarding the first-phase foundation engineering contract for the 'Taichung City Wuri District New Station South Section New Construction Project' to Mitsui Engineering—a fellow member of the Linyuan Group. The total contract value is NT$605 million, with the project period running from August 20, 2026, to February 10, 2028.

The project involves land at Lot 2-1, New Station South Section, Wuri District, Taichung City. Cathay Life acquired this plot on October 27, 2023, from the Taichung City Government for NT$3.305366 billion. The site spans 19,502.43 square meters (approximately 5,899.49 ping). Since Mitsui Engineering is a wholly-owned subsidiary of Cathay Construction, both companies belong to the Linyuan Group. Cathay Life Vice President Shi Min-Hung explained this related-party transaction at the Stock Exchange this evening.

Planned for Use as Mall, Office, and Data Center

Shi Min-Hung stated that the site is located near Taichung High-Speed Rail Station and Xinwuri Railway Station, approximately a 10-minute walk away. "This project is primarily intended for constructing a commercial building—planned as a 17-story above-ground and 3-story underground structure. Current plans include usage as a shopping mall, office space, and data center."

Today’s board approval covers only the foundation work, involving earth excavation and retaining wall column construction. "This includes preliminary works for excavating the basement areas. Subsequent main construction phases will be tendered separately." Total investment for the entire project is estimated in the tens of billions of NT dollars.

Annualized Yield Must Reach 2.72%; Market Estimates Exceed 3%

Shi noted that the first-phase foundation work is expected to complete in Q1 2028, followed by the second-phase main construction, with overall completion targeted around the end of 2031. Regarding the projected annualized rental yield, he said, "Exact figures involve corporate confidentiality and cannot be disclosed. However, they will meet our internal investment requirements."

Taiwan’s Financial Supervisory Commission (FSC) sets minimum annualized yield requirements for insurers investing in real estate. For properties acquired after November 19, 2012, the yield must be at least the benchmark interest rate plus 5 basis points. The benchmark rate is the average of China Post’s small-sum two-year fixed deposit rates on January 1 over the past five years, currently 1.47%. Adding 5 basis points results in a required minimum yield of 2.72%. Market analysts estimate that Cathay Life’s Wuri HSR commercial building project will achieve an annualized yield exceeding 3%.