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Galaxy Soho in Beijing, designed by Zaha Hadid Architects, as of 2012. Photo: Handout

Soho China is mulling a plan to put eight offices towers in Beijing and Shanghai up for sale for an estimated US$8 billion

  • The eight towers in Beijing and Shanghai include the Bund Soho, designed by the late Zaha Hadid
  • Soho China has already began to offload some of its peripheral assets as it pursues an asset-light strategy
Soho China
Soho China is considering selling a majority of its commercial property holdings in deals that may fetch as much as US$8 billion, according to people familiar with the situation.

At least eight office towers in Beijing and Shanghai are being discussed as part of the planned sales, said the people, who asked not to be named because the discussions are private.

An initial batch of projects worth as much as US$3 billion is being shopped to potential buyers, the people said. Sovereign wealth funds and private equity groups are among those being approached, one of the people said. Talks are still at an early stage and the final number of projects is still to be decided, the people said.

Shares of Soho China jumped as much as 9.2 per cent in afternoon trading in Hong Kong. Before today, the shares had slumped 18 per cent this year.

The potential sales signal Soho China may be shifting away from the nation’s office market, which has been hit by declining rents and decade-high vacancy rates as economic growth slows. Beijing has suffered one of the biggest declines in office rent yields globally in the past three years, according to Savills Plc.

Soho China didn’t immediately respond to a request for comment on Wednesday.

If completed in a single line, the deal would be China’s biggest commercial property transaction. China Overseas Land & Investment paid US$4.4 billion for Citic’s property assets in 2016 as part of a government-backed restructuring, according to data from Real Capital Analytics.

However, Soho China will probably sell the assets in stages, the people said.

Soho China’s properties were worth US$8.6 billion as of June 30, according to company filings. The company’s price-to-book ratio is near a record low of 0.3, suggesting the assets would be more highly valued in the private market.

The company has already started to offload some noncore real estate assets. In June, it began marketing individual floors in 13 properties for a combined US$1.1 billion. Last month, it sold car parks under nine of its buildings for US$108 million to a Hong Kong private equity fund.

The buildings being evaluated for potential sale include its signature Bund SOHO in Shanghai’s city centre and the landmark Wangjing SOHO in Beijing, designed by Zaha Hadid, the first woman to receive the prestigious Pritzker Architecture Prize, the people said.

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