Behind the rumors of SOHOs $8 billion sale: the enthusiasm of foreign investment in real estate is high

category:Finance
 Behind the rumors of SOHOs $8 billion sale: the enthusiasm of foreign investment in real estate is high


As the public knows, foreign investment has become a takeover knight. In the process of continuous news fermentation, it was reported that Blackstone Group, together with GIC, a state-owned company in Singapore, set up a buyers group and intended to acquire SOHO Chinas Soho on Guanghua Road in Beijing, SOHO Tower 3 in Wangjing and SOHO Renaissance square in Shanghai.

In addition to the above three projects, SOHO China also has five projects for sale, namely Gubei SOHO, SOHO Tianshan square, Bund SOHO in Shanghai, Qianmen project in Beijing and Lize SOHO. The total value of these eight projects is 50-60 billion yuan. SOHO China will seek to sell in batches, with all transactions planned to be completed within the next two years.

From the perspective of asset targets, the eight projects that SOHO China hears to sell are all office buildings located in Beijing and Shanghai, which are high-quality assets in the eyes of foreign investors.

In fact, similar to Blackstone, GIC and Canada Brookfield funds, foreign funds that have invested in Chinas commercial real estate for many times during the year are becoming more and more enthusiastic, compared with domestic capital investment, which seems to be far from active.

From the perspective of the large-scale property transactions in the four first tier cities observed by the perspective index, the transaction amount in the first half of the year exceeded 45 billion yuan, with foreign investment accounting for half of the transaction. In the first half of this year, the regular investors from Singapore, such as fengshu, Keppel and Kaide, continued to lay out their business in major cities and realized the improvement of business value in asset trading. The investment institutions from Hong Kong, such as Jihui and lingzhan, did not let up too much. They seized the opportunity to purchase the good offer of the first tier cities and gained more profit between buying and selling through operation upgrading and transformation.

Although the international economic factors are not clear, China is still the main economy in the world. From the internal point of view, the pace of urbanization continues, coupled with the upgrading of residents consumption, the demand for commercial real estate in the future can be expected. From the external point of view, the weak performance of the RMB, coupled with the demand of many domestic developers for deleveraging and activating cash flow, many foreign investors have taken the opportunity to copy the commercial properties with development potential and superior location, which to a certain extent has also promoted the transaction amount to a new high.

On the whole, transactions in Beijing and Shanghai are still active in block transactions, with the number and amount of transactions higher than those in Guangzhou and Shenzhen. However, compared with the heat in the first quarter, the enthusiasm of each city in the second quarter decreased slightly.

From the perspective of asset preference, among the four first tier cities, office buildings have become the first choice of investors, accounting for more than half of them, because they are easy to manage, have strong transaction liquidity and have stable rental sources.

According to the recent review and outlook of Shanghai market in the third quarter of 2019 released by Savills, the average vacancy rate of class A office buildings in the core business district rose 1.3 percentage points to 13.2% on a month on month basis due to the slow pace of new projects removal. The continuous oversupply situation, coupled with the slowdown in demand, forced owners to take price for volume measures to ensure the rental rate.

Both internal factors and market factors, SOHO Chinas asset sale at this time has brought a strong signal to the domestic commercial real estate block trading market.

Pan Shiyi and his wifes clearance? SOHO China plans to sell all 8 core assets

Surging news learned from people familiar with the transaction that SOHO China has started trading with foreign companies. Pan Shiyi and Zhang Xin, the actual controllers of SOHO China, finally plan to sell all the eight King Kong, the core assets of SOHO China.

Behind Pan Shiyis asset selling: net profit fell by 44% in the first half of the year

As a farsighted real estate tycoon, Pan Shiyi has long seen the limit of the real estate market. In an interview earlier, he also said that the business model of land acquisition development sales in the real estate industry had basically ended by 2017. There was no room for real estate to continue to rise. The land price was high, the profit margin of real estate enterprises was very low, and the ceiling was already on the way, or even on the way. SOHO China will no longer build houses by taking land.

Pan Shiyis retreat? Take out the employees wallets and ask for the workers lives, and the developers hair is all over the place

In recent years, the real estate market has fluctuated, and Pan Shiyi is also swinging between selling and renting. Since 2012, SOHO China has changed from selling property to leasing business, and Pan Shiyi has transformed into a charter company. However, between 2014 and 2017, SOHO properties were sold one after another and cashed out more than 30 billion yuan.