Companies

Soho's profit rose 10% in 2010, price gain forecast

By Bonnie Cao (China Daily)
Updated: 2011-03-03 11:02

HONG KONG - Soho China Ltd, the biggest developer in Beijing's central business district, said its 2010 profit rose 10 percent and forecast a "significant" gain in commercial property prices.

Net income climbed to 3.6 billion yuan ($547 million), or 0.67 yuan a share, from 3.3 billion yuan, or 0.63 yuan a share, a year earlier, it said in a Hong Kong exchange statement.

The results exceed the 3.4 billion yuan average estimate of 22 analysts surveyed by Bloomberg.

Sales more than doubled to 18.2 billion from 7.4 billion, boosted by office and retail developments.

Soho expects offices and malls to draw more investors as the government introduces curbs aimed at home purchases.

Commercial real-estate investment in the world's fastest-growing major economy jumped 42 percent last year from 2009, while transaction volume rose 20 percent, according to Cushman & Wakefield Inc, the world's largest closely held real-estate services company.

"The commercial property market remains nearly unaffected by the policies and may become the only investment vehicle for property that attracts tremendous investment," said Pan Shiyi, Soho's chairman, in a statement. "We expect to see a significant increase in the price of commercial property."

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The developer will also seek acquisitions "more aggressively" in 2011, it said, adding that it has about 18 billion yuan in cash.

China has this year raised the minimum down payment for second-home purchases and introduced taxes on residential properties in Shanghai and Chongqing.

Chinese cities, including Beijing, Shanghai and Guangzhou, also announced restrictions on home purchases last month, responding to measures by the central government.

In October, the central bank raised interest rates for the first time in three years.

Soho said most of the government's measures were within expectations, except for the policies restricting home purchases and setting price ceilings on homes.

Soho fell 0.5 percent to HK$5.65 (73 cents) at the 4 pm close in Hong Kong, bringing the stock's losses this year to 2.3 percent, compared with the Hang Seng Index's 0.1 percent retreat.

Its drop on Wednesday accompanied a slide of 1.5 percent in the benchmark index and a 2.2 percent slide in a gauge of developers listed in Hong Kong.

Bloomberg News