Reuters - SOHO China to pay $586 mln for land in Beijing

3 September 2009

* Buys land in prime Beijing location

* Will develop the site into a commercial and office block

HONG KONG, Sept 3 (Reuters) - Cash-rich commercial property developer SOHO China said it will pay 4 billion yuan ($586 million) to buy land in Beijing, stepping up its land bank replenishment in anticipation of rising valuations.

The company won a tender for the land which would accommodate buildings with gross floor area of up to 500,000 square metres at Wangjing in Beijing s Chaoyang district, Chairman Pan Shiyi told reporters on Thursday.

"Wangjing is a highly developed area and the block we get is located at the heart of Wangjing," Pan said in a telephone conference.

On Wednesday Pan told the Reuters China Investment Summit the company was in talks to buy more land in Shanghai and Beijing.

Property prices in China, which have fallen to attractive levels after a deep downturn since late 2007, are rising again and pushing developers to act more quickly.

The Wangjing site, which is in the northeast of Beijing, neighbours offices of multinational companies including Microsoft , Caterpillar and Siemens .

When construction is completed, office space will be sold for 30,000 yuan per square metre and 50,000 yuan per square metre for commercial usage, Pan said.

The property would be put on the market in 2011, Pan said.

SOHO China paid 2.45 billion yuan last month for a prime Shanghai office building from Morgan Stanley .

Shares of SOHO ended up nearly 3 percent at HK$4.18, outperforming a 1.2 percent rise in the blue chip Hang Seng Index <.HSI>.

The stock has gone up 25.5 percent this year, lagging a 37 percent increase in the Hang Seng. (Reporting by Michael Wei and Alison Leung; Editing by David Holmes) ($1=6.830 Yuan)