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SOHO China sheds assets to focus on the prime

SOHO China announced today that it has sold a mixed-use office and retail complex in Shanghai's Hongkou District to a group of buyers through equity transaction for 3.573 billion yuan (US$521 million) as the Beijing-based office developer continued with its strategy to focus on prime office properties in Beijing and Shanghai.

Keppel Land China Ltd, a wholly-owned subsidiary of Singapore-headquartered Keppel Land Ltd, Alpha Investment Partners Ltd, a wholly-owned subsidiary of Keppel Capital Holdings Pte Ltd, as well as a co-investor jointly bought Hongkou SOHO, a 90,000-square-meter complex in the city's North Sichuan Road commercial precinct.

Average selling price of the building, designed by renowned Japanese architect Kengo Kuma, was around 51,000 yuan per square meter based on leasable gross floor area, or 53 percent higher than the cost, according to a statement by SOHO China.

Launched in the fourth quarter of 2015, Hongkou SOHO is now 97 percent occupied with major tenants including Panasonic, China Pacific Insurance and SOHO China's shared office brand SOHO 3Q.

"Being the financial and commercial hub of China, Shanghai has seen the need for more high quality and well-located developments in the city," said Christina Tan, chief executive officer of Keppel Capital and managing director of Alpha.

Hongkou SOHO represents a relatively small component of SOHO China's investment property portfolio, with its leasable area accounting for about 6 percent of the company's total. At present, SOHO China holds an investment property portfolio of approximately 1.6 million square meters, including SOHO Tianshan Plaza which was launched recently and Leeza SOHO and Gubei SOHO which are scheduled to reach completion in late 2018.


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