AIG's Taiwan insurance unit buys $250 mln building

* AIG's Taiwan insurance unit buys a Taipei building

* Closer China ties will likely lift commercial prices

TAIPEI, May 26 (Reuters) - Nan Shan Life, American International Group's Taiwan insurance unit, has bought a Taipei office building for T$8.2 billion ($250 million), the latest sign of optimism about the property market ahead of a potential influx of Chinese investors.

Taiwan's property market, which had been sluggish during the global downturn until the first quarter of 2009, has been attracting investors since the island's government opened up the real-estate sector to Chinese investors.

That decision was part of a series of China-friendly policies introduced by the administration under President Ma Ying-jeou to try to boost the recession-hit economy, whose gross domestic product shrank by an annual 10.2 percent in the first quarter. [ID:nSP465824]

The latest move by Nan Shan, 95 percent-owned by AIG (AIG.N), will bring Nan Shan's real estate investments to T$30 billion so far this year, according to a company statement late on Monday and seen by Reuters on Tuesday.

"The investment demonstrates the long-term commitment to the Taiwan market by Nan Shan," the statement added.

Fubon Financial (2881.TW) said in April it had purchased a high-end department store from Shin Kong Financial (2888.TW) for T$11.6 billion. [ID:nTP46338]

Construction shares .TCOI have surged 70 percent since touching a recent low late in April, far outpacing the broader market 's 20 percent gain. ($1=T$32.7) (Reporting by Faith Hung; Editing by Ken Wills)