SOHO China: axed land auction won't hurt
Updated: 2008-03-11 07:11
By Hui Ching-hoo(HK Edition)
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The government's decision to cancel the auction of three land sites that SOHO China was intent on purchasing won't hurt the company's profitability, its chairman said yesterday.
Pan Shiyi, chairman of the Beijing-based property developer, also said that there is no timetable for the company receiving an expected asset injection of the Qianmen Project from his private company. He said the injection is "still pending approval from the regulator, so we cannot come up with a timetable".
The Qianmen Project, located in the prime development area south of Beijing's Tian'anmen Square, compromises 44 sites. Pan's private company owns a 49 percent stake of 33 of the sites, and he intends to inject the asset into the Hong Kong-listed unit he chairs - SOHO China.
As for the remaining 11 sites - three of which were scheduled to be auctioned off last month - the government decided on Jan 31 to withdraw their auctioning.
"We are still looking into the cause of the cancellation, but we believe the government will handle the issue with appropriate legal procedures," Pan said.
The cancellation of the public auction of three land parcels that SOHO China was eager to acquire, will not "drag down the firm's development," Pan said.
He believes the company's profitability remains strong, as many other projects such as Guanghualu SOHO and Sanlitun SOHO are in the pipeline and will provide strong future revenues for the company.
Pan said the company's current land reserves are sufficient for the next four to five years, and the company has been active in acquiring land in the mainland's richest cities, rather than focusing solely on Beijing.
Last year, SOHO China sold and pre-sold a total of 111,894 sq m for 4 billion yuan. The average price was about 35,742 yuan per square meter - well above the average Beijing properties' selling price of 12,436 yuan.
During the period, the company posted a 477 percent increase in net profits, earning 1.9 billion yuan, while its turnover grew 300 percent to 6.9 billion yuan.
(HK Edition 03/11/2008 page2)