After announcing a 70% discount on the sale of high-quality properties in core cities, Pan Shiyi’s SOHO China received a huge ticket.
The Chinese reporter of securities companies learned from the website of Beijing municipal market supervision bureau that recently, 15 property management companies under SOHO China were fined 115 million yuan for illegal acts such as charging electricity charges.
The annual report just issued by SOHO China on March 24 shows that in 2021, the company had a net loss of 120 million yuan and will continue to reduce capital pressure by selling commercial properties.
soho property fined 115 million a day
The Chinese reporter of the securities firm learned from the website of the Beijing municipal market supervision bureau that recently, 15 branches of Beijing SOHO Property Management Co., Ltd. (hereinafter referred to as SOHO property), including Chaoyang Gate second branch, Dongdaqiao branch, Haidian Huangzhuang branch, Qianmen branch, Sanlitun branch and Wangjing branch, were punished, warned and fined by the Beijing multi district market supervision and Administration Bureau.
It is understood that 15 SOHO property branches were fined because they charged additional electricity fees to end users on the basis of the average electricity price of power companies in the same period. Among them, 14 companies charged capacity increase fees to end users in the name of power transformation service fees, which violated the relevant provisions of the power law of the people’s Republic of China. These 15 branches were fined a total of more than 115 million yuan.
The projects of these 15 SOHO properties include Beijing Yinhe SOHO, SOHO Shangdu, Danling SOHO, Qianmen SOHO, Beijing Centergate Technologies (Holding) Co.Ltd(000931) soho, Lize SOHO, SOHO Beijing residence, Sanlitun SOHO, Wangjing SOHO, Chaoyang Gate SOHO, Guanghua Road SOHO, Chaowai SOHO, Jianwai SOHO, SOHO Jiasheng center, etc.
soho China’s net loss of 120 million last year
On March 24, the 2021 annual performance report released by SOHO China showed that in 2021, the company realized a rental income of about 1.742 billion yuan, a year-on-year increase of 13%, including no property sales income; The gross profit was about 1.4 billion yuan, roughly the same as last year; The gross profit margin of leasing business was about 80%, with a year-on-year increase of 4 percentage points; The net loss was 120 million yuan and the profit was 537 million yuan in the same period of 2020. As of December 31, 2021, the average rental rate of the group’s investment properties is about 85%; The net asset liability ratio is about 44%, and the average borrowing cost is about 4.7%.
It is worth noting that as of December 31, 2021, SOHO China’s net loss attributable to shareholders of the parent company was about 131 million yuan; The excess of current liabilities over current assets was about 2.339 billion yuan, while the balance of bank deposits was 84.858 million yuan, the balance of structured deposits was 1.378 billion yuan and the balance of cash and cash equivalents was 735 million yuan.
SOHO China said that the loss was mainly due to the one-time tax expense of about 439 million yuan recognized by the group’s subsidiaries this year.
It is understood that SOHO China announced on December 17, 2021 that Beijing Jianhua land Co., Ltd., a subsidiary of the company, received the decision on tax treatment and decision on tax administrative punishment made by the Inspection Bureau of Beijing Taxation Bureau. In the decision, the Inspection Bureau of Beijing Taxation Bureau found that Jianhua land had underpaid the enterprise income tax and land value-added tax by 198 million yuan. Jianhua land shall pay the above taxes, late fees and fines totaling 709 million yuan after receiving the decision.
soho China said in its annual report that it had taken the following measures and formulated plans to reduce capital pressure and improve its financial situation:
1. The company is actively communicating with relevant major lenders to obtain new financing and refinancing, and the company can use unsecured properties as collateral for new loans. The company will continue to control and meet the terms of the existing loan contract.
2. The company will continue to take measures to sell some commercial properties.
3. The company will continue to take active measures to control administrative costs and save capital expenditure to improve operating cash flow.
Pan Shiyi said that the continuous small-scale outbreak of covid-19 epidemic and the “double reduction” policy of the education industry have brought considerable negative impact on the office and commercial building rental market. In 2022, the office market in Beijing and Shanghai will usher in a huge market supply, so the leasing situation is still full of challenges.
7% off sale of high-quality houses in Beijing and Shanghai for debt repayment
On March 10, the Chinese reporter of the securities firm learned from SOHO China that Pan Shiyi, chairman of SOHO China, announced that he would sell 32000 square meters of high-quality properties in Beijing and Shanghai at a 70% discount.
It is understood that these 32000 square meters of high-quality houses cover nine projects such as Galaxy SOHO, Sanlitun SOHO, SOHO Donghai square and SOHO Zhongshan Square. All of them are located in the urban core of Beijing and Shanghai, covering all kinds of business forms of office, commerce and apartment. Among them, there are many whole floor houses including rent and market scarcity. The rent return is stable and the investment cost performance is very high.
For prospective investors in the office market, a 70% discount sale is a good opportunity to pick up leaks. At the same time, SOHO China also increased the proportion of commission and bonus to 4% of the transaction volume, much higher than the industry average. At present, all houses for sale have been put on the shelves in the “SOHO China public rental and sale platform” applet.
According to the “SOHO China public rental and sale platform”, among the 9 projects sold at a 70% discount, there are 7 in Beijing, namely Galaxy SOHO, Beijing Centergate Technologies (Holding) Co.Ltd(000931) soho, Chaowai SOHO, SOHO Beijing residence, Chaoyang Gate SOHO, Sanlitun SOHO and Jianwai SOHO; There are two in Shanghai, namely SOHO Donghai square and SOHO Zhongshan Square.
Among them, Galaxy SOHO has 15 available office houses, and the largest one is a whole floor, with an area of more than 2800 square meters and a price of 48000 yuan / square meter; Chaoyang Gate SOHO has 8 commercial houses available for sale, the largest of which is 1700 square meters, with a price of 25000 yuan / square meter; Jianwai SOHO has a club house with an area of 3000 square meters and a price of 50000 yuan / square meter. In addition, SOHO Zhongshan Plaza has 13 sets of houses available for sale, including 2 sets with an area of more than 2100 square meters. One set of office houses is priced from 43000 yuan / square meter, one set of commercial houses is priced from 25000 yuan / square meter, and another set of commercial houses is 1600 square meters, priced from 26000 yuan / square meter. The source of the four suites in Soho Donghai Plaza is thousands of square meters, of which the whole floor office price starts from about 60000 yuan per square meter.
in addition to the above-mentioned houses with large area, the area of other houses ranges from 100 square meters to 500 square meters
For the reason of selling high-quality houses at a 70% discount, SOHO China said that it was to optimize the asset structure and alleviate the financial pressure. Pan Shiyi made it clear that all the income from the sale of houses will be used to reduce liabilities and will not be used as stock dividends.
Insiders interviewed by Chinese reporters of securities companies believe that SOHO China reduces its liabilities by selling core properties at a 20% discount, indicating that reducing its liabilities plays a positive role in the healthy development of enterprises under the current real estate market environment.
According to media reports, SOHO China has started selling assets in China since 2014, and has not purchased new assets in China. In the eight years from 2014 to 2021, SOHO China sold assets and cashed out more than 35 billion yuan.
