About Company
SOHO China Ltd or SOHO China is a Beijing-based real estate company focused on real estate development that earned global fame as a building developer. The company primarily operates in the office and commercial segment but has some mixed-use and residential properties in its portfolio. The company’s operations include developing and selling commercial and residential properties and real estate investment. Property development in Beijing and Shanghai is the company’s main business, and its portfolio comprises office buildings, residential properties, and recreational and leisure properties. Besides property development, the company’s business encompasses property management, property leasing and sales, property resale, and consulting services.
The acronym SOHO means ‘Smart offices, Home offices’ that upholds the company’s vision of integrating offices and residential apartments within the same building. The purpose was to create a comfortable workspace close to home that enhances productivity. SOHO China focuses on real estate development in the central business districts of Shanghai and Beijing, where it built several buildings that epitomize modern architecture.
Pan Shiyi and Zhang Xin, who are husband and wife in real life, formed the company in 1995 and are the current Chairman and CEO, respectively. Having drawn global attention and acclaim during the last 27 years, the company is one of the most high-profile real estate firms in China, as recognized by Fortune. According to the New York Times, SOHO is the only real estate company established itself as an exclusive office developer.
The company collaborates with world-famous architects in translating their innovative designs to create exclusive and high-profile buildings that turn into landmarks and real estate icons. The buildings built by SOHO hold high appeal to property investors, forming most of the customer base. Local businesses, too, take considerable interest in SOHO’s real estate business.
SOHO China contributed immensely to China’s urbanization
What are the Operating Segments of SOHO China?
SOHO China Ltd carries out its real estate investment and property investment operations through three segments: Completed Projects held for Sale, Projects under Development, and Completed Investment Properties.
Completed projects with completion certificates comprise the segment of Completed Projects held for Sale.
The Completed Investment Properties included completed projects and were ready for earning rental income.
As the name implies, the Projects under development include ongoing projects.
What is the Secret of SOHO’s Success?
SOHO China became a world-class real estate company by consistently delivering high-quality projects for their exquisite designs and investment potential. The company has created an entity as a high-end real estate developer because of its unstinted efforts in developing projects driven by cutting-edge designs that cater to the upscale market.
SOHO China Creates Landmark Buildings
The company’s name has become synonymous with landmark buildings because of its remarkable achievement in developing extraordinary buildings that have become landmarks of the region. SOHO China can claim credit for creating China’s modern skyline in Shanghai and Beijing. In Beijing alone, 18 landmark buildings bear the unmistakable signature of SOHO’s exclusive design.
Why is 2012 Considered the Turning Point for SOHO China?
The company made a significant shift in its business strategy in 2012. The company that initially started with the vision of ‘build to sell’ embraced a new approach of ‘build to hold’. From the beginning, the company’s revenue source was selling properties it developed. Never did the company own any property. However, the shift in strategy saw the company building many properties and retaining its ownership. Today, the company owns several million square meters of office space in Shanghai and Beijing as part of its long-term investment. According to Pan Shiyi, SOHO China with continue to hold its core assets in the two cities while selling selected properties.
How did SOHO China Benefit from the New Strategy?
While shifting to the ‘build to hold’ strategy, the company had to endure some difficult times. The transition was quite challenging, and the company struggled for about a year to steady the ship. Implementing the strategy was as good as forming a new business with challenges. But the experience and expertise in real estate and building design acquired over the years helped the company turn the tide in its favor. Between 2012 and 2016, the company had to dig in its heels to implement the new strategy successfully. By 2017, things started changing, and the company recorded a 44% rise in rental income. It translated into an increase of 69% in net profits for the company during the year.
What are the Key Projects of the Company?
The company’s key projects include SOHO Fuxing Plaza, Wangjing SOHO, Bund SOHO, SOHO Leeza, Gubei SOHO, Guanghualu SOHO, SOHO Tianshan Plaza, and SOHO Qianmen Avenue.
Since its inception, the company has built more than five million square meters of location properties across Shanghai and Beijing.
What Contributed to the Success of SOHO China?
The tremendous commercial success of SOHO China’s property development business is mainly due to the company’s strength in creating exclusive designs and incredible engineering capabilities. It helped the company roll out innovative properties in prime locations that attracted China’s elite urban professionals and high-net-worth individuals.
SOHO China – The Top Management
Pan Shiyi is the founder, Chairman/ Executive Director of SOHO China and Pan Zhang Xin ‘Marita’ is the Co-founder/ Executive Director / CEO. Ni Kuiyang is the Chief Financial Officer, and the Board Members include Pan Shiyi, Sun Quiang Chang, and Pan Zhang Xin ‘Marita’. From the nature of the management team, it becomes clear that SOHO China is a closely-held company dominated by the founders.
SOHO China – Stock Exchange Listing
SOHO China’s name appeared on the Hong Kong Stock Exchange on October 8, 2007. The company’s stock code is 410. The IPO floated by SOHO remains Asia’s largest IPO for commercial real estate.
SOHO China’s Honors and Distinction
Over the years, the company won many awards for building design and great projects. The most prestigious distinction is the ‘Most Admired Companies of the country by Fortune (China) in succession six times between 2006 and 2012.
SOHO China- The Financials
The company’s turnover in 2019 was 2.19 billion Yuan, including property sales and rental income.
SOHO China belongs to the construction industry segment and reported total revenue of $270 million in 2021. The Covid19 pandemic was the reason for the drop in revenue. Consequently, the company’s net income fell by 59.8%.
In 2020, the total assets held by SOHO China amounted to 70.7 billion Yuan. The company maintains a 30% borrowing concerning the assets. The asset holding pattern of the company maintained a steady level of around 70 billion Yuan through 2015 and 2020.
