HONG KONG: Commercial property developer SOHO China Ltd said on Tuesday it will put up for sale a Shanghai office building this month to tap surging demand for property in the city.
SOHO China had shifted its business from sales to renting properties four years ago, but executives said the deal would help it take advantage of high valuations in Shanghai.
Frenzied buying in the city just months after China's frothy stock markets crashed has raised fears about a replay of the real estate bust that has hit economic growth.
SOHO China will put up for sale the 42,000 square meter-Soho Century Plaza in Shanghai at the end of March, Chairman Pan Shiyi told reporters, without giving a target price.
"We decided to sell some of the sophisticated projects, those non-core assets outside the (Shanghai) bund or Beijing's CBD (central business district)," said Pan. "It's better to earn some money while the market is good."
SOHO China reported a net profit excluding net valuation gains on investment properties of 423 million yuan ($65.03 million) in 2015, 76 percent lower than 2014, as revenue from office sales continued to drop.
In 2012, the company said it was changing its business model to build-and-hold from build-and-sell in order to maintain a more stable income stream from rents rather than property sales.
SOHO China Chief Executive Officer Zhang Xin declined to comment on whether a bubble was forming in China's major cities, but said asset prices would inevitably increase in a low interest rate environment.
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