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Soho buys 50% of project on the Bund
By Richard Fu |
December 30, 2011, Friday
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Print Edition
Print Edition
SOHO China Ltd has agreed to pay 4 billion yuan (US$632 million) for 50 percent of a commercial project on Shanghai's historic Bund - once China's most expensive real estate - from its debt-laden owners.
The deal marks the latest effort by cash-rich Soho to acquire commercial property projects in big cities like Shanghai and Beijing when other Chinese developers are selling assets after the government's crackdown on escalating home prices eroded sales.
The 45,472 square-meter site, or Bund 8-1 Land, is designated for mixed office, retail, financial and cultural development, Soho said in a statement to the Hong Kong stock exchange.
The developer has 17 billion yuan of cash and will continue to seek other acquisition targets, Chairman Pan Shiyi said in a conference call yesterday.
Shanghai Zendai Property, one of the debt-laden owners, bought the plot in February last year for 9.22 billion yuan, making it the most expensive piece of real estate on the Chinese mainland at that time.
In a separate statement, Greentown, which holds 10 percent of the site, said it will receive 1.04 billion yuan from the sale, which would "improve the gearing level and strengthen the financial position of the group."
Greentown shares have tumbled 60 percent over the past year amid the government's tighter policies on the property market and concerns about its funding ability. The company's aggressive expansion and heavy borrowing in the past have forced it to focus on property sales instead of buying land.
Shanghai-based Fosun International Ltd, China's top private conglomerate, will continue to hold the other 50 percent in the Bund project.
The deal marks the latest effort by cash-rich Soho to acquire commercial property projects in big cities like Shanghai and Beijing when other Chinese developers are selling assets after the government's crackdown on escalating home prices eroded sales.
The 45,472 square-meter site, or Bund 8-1 Land, is designated for mixed office, retail, financial and cultural development, Soho said in a statement to the Hong Kong stock exchange.
The developer has 17 billion yuan of cash and will continue to seek other acquisition targets, Chairman Pan Shiyi said in a conference call yesterday.
Shanghai Zendai Property, one of the debt-laden owners, bought the plot in February last year for 9.22 billion yuan, making it the most expensive piece of real estate on the Chinese mainland at that time.
In a separate statement, Greentown, which holds 10 percent of the site, said it will receive 1.04 billion yuan from the sale, which would "improve the gearing level and strengthen the financial position of the group."
Greentown shares have tumbled 60 percent over the past year amid the government's tighter policies on the property market and concerns about its funding ability. The company's aggressive expansion and heavy borrowing in the past have forced it to focus on property sales instead of buying land.
Shanghai-based Fosun International Ltd, China's top private conglomerate, will continue to hold the other 50 percent in the Bund project.
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