Soho China, a mainland commercial property developer listed in Hong Kong, sold two office projects in Shanghai to state-owned rival Financial Street Holdings at a combined price of 5.23 billion yuan (HK$6.62 billion), as it struggles to turn itself into a "build-to-hold" developer. The sales of Soho Hailun Plaza and Soho Jing'an Plaza are part of the company's strategy to shed non-prime assets and increase cash to "capture better, even more prime location grade A offices in Beijing and Shanghai," the company said. Beijing-headquartered Soho began its bumpy foray into Shanghai in 2009 and acquired the two projects in 2011 at a combined price of 4.1 billion yuan. It then started its strategic transition in 2012 to hold the projects it builds. After the deal, Soho has 12 projects in Shanghai and 17 in Beijing. CRIC, a mainland real estate consultancy, estimated floor space cost of 21,500 yuan per square metre for Soho Jing'an Plaza compared with the neighbourhood price of 27,256 yuan per square metre, while the 14,624 yuan per square metre for Soho Hailun Plaza is much lower than the latest land cost of 32,491 yuan per square metre in the area. Industry analysts have pointed out the challenges of such a transition for Soho because it will require higher cash flow. "Investment in the office market will break even only after 10 years," said Joe Zhou, head of research at property consultancy Jones Lang LaSalle in Shanghai. Another global property consultancy, DTZ, said in a report about Shanghai that "our medium to long-term outlook remains cautious as future supply is expected to peak between 2015 and 2016, which could lead to a softening of rental growth". But some long-term players see a good chance to buy. The purchases of these two projects marked the entrance of Beijing-based Financial Street in Shanghai which had long been seeking such an opportunity just as primary land prices in the financial hub soared. "Shanghai's office market is the healthiest in China and in the years to 2020, rents will increase by 40 per cent to 50 per cent," Zhou said.