South China Morning Post - Soho on track to achieve 10b yuan pre-sale target

By Yvonne Liu

Strong demand for office and retail space in Beijing is driving prices steadily higher and will help developer Soho China reach its pre-sale target of 10 billion yuan (HK$11.35 billion) this year, according to chairman Pan Shiyi.

Sales are exceeding our expectations. We have been raising our asking prices by 1 per cent every 20 days for the past few months, and sales have remained strong, said Pan.

Soho China will raise selling prices for its retail and office space by a further one-off 5 per cent from November 1, which will mean that asking prices at its three Beijing projects will have risen a total of 10 per cent from the start of the year.

The Beijing-based firm is selling space in Sanlitun Soho, Zhongguancun Soho and Chaoyangmen Soho.

Year to date, revenue had amounted to eight billion yuan and the price rises meant the company would meet its full-year pre-sale target of 10 billion yuan, said Pan, who added that investor demand was growing despite rising prices. We have noticed that buyers of our commercial projects are no longer limited to investors from northern cities. They are now coming from all over the country and also Hong Kong, he said.

According to the city government s website, retail space in Sanlitun Soho is selling at an average of 60,535 yuan per square metre. The average selling price for an apartment is 38,508 yuan per square metre and that for office space is 38,921 yuan per square metre.

The average prices of retail and office space at Chaoyangmen Soho were 59,638 yuan and 38,547 yuan per square metre, respectively.

Soho China acquired the Exchange in Shanghai two months ago and will begin signing new leasing agreements with tenants in November. The project will be ready for sale, with leases, to investors next year.

Pan said the project would generate a good return, as Soho China would not renovate the building before putting it back on the market on an "as is" basis.

Its acquisition cost was about 34,184 yuan per square metre and it would be put back on the market with new lease agreements in place at 50,000 yuan to 60,000 yuan per square metre.

The building has a total floor area of 71,671 square metres.

Land prices on the mainland had risen sharply, but Soho China remained interested in acquiring distressed properties in the city centres of Beijing and Shanghai, said Pan.