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August 5, 2009

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Home » Business » Finance

US bank aims to close office building sale

THE real estate investment arm of United States bank Morgan Stanley aims to sell a Shanghai office building for about 2.5 billion yuan (US$366 million) to a Hong-Kong-listed developer, sources said yesterday.

Morgan Stanley Real Estate is in advanced talks with developer SOHO China for the sale of The Exchange, a building on Shanghai's Nanjing Road W., according to sources familiar with the matter.

The deal would be SOHO's first property investment in Shanghai as the developer has focused mainly on Beijing.

"Morgan Stanley hopes to cash out while SOHO is keen to expand into Shanghai so this is almost a perfect time for both," said one source.

"But the only problem is of course the price," said the source, adding some market watchers valued the property widely between 2 billion and 3 billion yuan due to uncertainties on its business prospects.

MSRE aims to close the deal before the end of this year, said the sources who declined to be identified before an official announcement is made.

No agreement has been signed yet and some other investors have also shown interest in the property but SOHO China, run by influential Chinese property tycoon Pan Shiyi, is the frontrunner, the sources said.

MSRE bought Dong Hai Square for roughly 2 billion yuan in 2006 and later renamed the building The Exchange.

Morgan Stanley declined to comment. A representative for SOHO China could not be immediately reached for comment.

Morgan Stanley began making property investments in Shanghai in 2003 and undertook real estate projects with local partners, including Forte and Shanghai Dragon, an investment arm of the city government.


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