Financial Institutions Cluster in Taipei’s Xinyi District
2011/10/13 | By Judy LiTaipei’s Xinyi District is increasingly favored by financial institutions and has gradually formed up as a new financial center, earning it the sobriquet “Taipei’s Manhattan.”
Quite a number of financial institutions have already moved their headquarters into the district, and more are planning to follow suit. BNP Paribas and Nomura Securities Taipei Branch relocated there last year, and the Shin Kong Financial Holding Co., Development Bank of Singapore (DBS), the consumer banking division of HSBC, and Allianz Life Insurance Co. have either moved in this year or are planning to do so.
Shin Kong Financial and its affiliated Taiwan Shin Kong Commercial Bank are now located in the Shin Kong Life Tower, a skyscraper in western Taipei owned by the Shin Kong Group, but Shin Kong Financial’s board recently decided to move its headquarters and the bank’s main office to the Shin Kong Xinyi Financial Building, which is also owned by the group. The government-linked Hua Nan Bank, too, has a new headquarters building under construction in the Xinyi District.
Following the implementation of the cross-straits Economic Cooperation Framework Agreement (ECFA), mainland Chinese banks are also interested in setting up their Taiwan footholds in “Taipei’s Manhattan.” The state-owned Bank of China has already established its first Taiwan branch in the Xinyi District, and other Chinese banks are expected to arrive there soon.
Foreign banks with their Taiwan headquarters in the Xinyi District include UBS AG, Australian and New Zealand Banking Group (ANZ), JP Morgan Chase Bank, Barclays Capital, BNP Paribas, Royal Bank of Scotland (RBS), Citibank, DBS, and HSBC.
Statistics released by Global Assets Management, a subsidiary of Sinyi Realty Estate Inc., one of Taiwan’s leading real estate firms, show that foreign financial institutions rented a total of 8,000 pings (one ping equals 3.3 square meters) of office space in the Xinyi District in the first half of 2011, mostly for the purpose of moving their headquarters in.
More than Banks
But the Xinyi District is far more than Taipei’s new financial center. W.H. Wang, a project manager at Global Assets, notes that many luxury residential buildings have been constructed to attract the rich and well-to-do to live there.
With the real estate market there becoming ever hotter, rental prices have soared. The monthly cost of renting an office in the Xinyi District has surged 30%-50% to about NT$3,000 (US$100) per ping over the past year, and market observers believe that the figure will probably continue climbing to reach NT$4,000-4,500 (US$133.3-150) in the next couple of years.
The famous Taipei 101 tower currently commands the highest office rental, at NT$4,200 (US$140) per ping, compared to the NT$2,800-3,200 (US$93.33-106.66) charged following the global financial tsunami in the second half of 2008.
A commercial building adjoining the MRT Taipei City Hall Station (in the Xinyi District), one of the most popular Taipei Metro stations, is said to be the most highly favored location by prospective tenants. The building, owned by Cathay Life (an affiliate of the Cathay Financial Holding Co.), currently commands rental fees of up to NT$3,600-4,000 (US$120-133.3) per ping.
Insiders say that most of the commercial and/or office space in the Xinyi District is already occupied, with little space left available.
Despite its popularity, however, a couple of leading banks reportedly intend to move away from Xinyi, and some financial institutions prefer to locate their headquarters in the old Nanking East Road financial center. The Chinatrust Financial Holding Co., for example, is reportedly planning to move its headquarters from Xinyi to Nangang, an outlying district of Taipei, in the near future. Ground for the prospective headquarters building was broken in the Nangang Software Park in 2009, and completion is slated for 2013.
The government-linked Taiwan Cooperative Bank is reportedly spending about NT$5.3 billion (US$176.67 million) to build a complex in the old financial center around the intersection of Bade Road and Nanjing East Road. The projected complex, which will consist of three towers with a total office space of more than 30,000 pings, will serve as the bank’s new headquarters and it, too, is scheduled for completion in 2013.
| Banks with Headquarters in the Xinyi District | ||
| Bank | Headquarters Building | Rental (NT$ per ping) |
| Cathay United Bank | Taipei Cathay Financial Center | 3,500-4,000 |
| UBS AG | Taipei Cathay Financial Center | 3,500-4,000 |
| ANZ | Taipei Cathay Financial Center | 3,500-4,000 |
| JP Morgan Chase Bank | Cathay Xinyi Trading Center | 3,500-3,800 |
| Barclays Capital | Cathay Xinyi Trading Center | 3,500-3,800 |
| BNP Paribas | Taipei 101 Office Tower | 3,500-4,000 |
| Royal Bank of Scotland | Taipei 101 Office Tower | 3,500-4,000 |
| Citibank | Walsin Tower | 2,700-2,800 |
| Bank of China | Kelti Tower | 3,000-4,000 |
| DBS | Shin Kong Xinyi Financial Building | 3,000-3,500 |
| Taiwan Shin Kong Commercial Bank | Shin Kong Xinyi Financial Building | 3,000-3,500 |
| HSBC | International Trade Building | 2,500-3,000 |