SOHO China on lookout for acquisitions in prime locations
The mainland’s largest developer of prime office space, SOHO China, says it will continue to explore buying opportunities in prime locations in Beijing and Shanghai as the uncertain market outlook for the mainland’s residential market provides acquisition opportunities.
The plan was unveiled as it announced its interim results on Thursday, with core profit, excluding net valuation gains, rising about 128 per cent to 1.22 billion yuan (HK$1.54 billion) in the first half of the year on a stronger contribution from sales of commercial space and rental income.
SOHO recorded turnover of about 4.75 billion yuan as property sales rose about 83 per cent to 4.59 billion yuan. Property rental income rose 84 per cent to 164 million yuan. Net profit rose 29 per cent to about 2.7 billion yuan.
In February, the group disposed of SOHO Hailun Plaza and SOHO Jingan Plaza, both in Shanghai, by equity transfers for a total consideration of about 5.23 billion yuan.
The core net profit margin during the first half was about 26 per cent.
Chairman Pan Shiyi said in the results announcement that the uncertain market outlook for the mainland’s residential property market would provide land or project acquisition opportunities for strong, cash-rich developers.
“SOHO China has continually been able to maintain one of the lowest gearing ratios amongst all of our peers,” he said.
The company had total cash and bank deposits of about 15.3 billion yuan at the end of June, while its net debt to equity was about 15 per cent.
Directors declared an interim dividend of 0.12 yuan a share.