2019 interim results presentation august 2019 · all pipeline projects to complete by 2019, with...

2019 Interim Results PresentationAugust 2019

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• High Quality Assets - Holding 1.4 million sqm of prime location properties in Beijing and Shanghai

• Defensive Commercial Real Estate Player - Value protection in economic downturn

• Solid Rental Growth – Completion of two new projects contributing to future rental income

• Sale of Strata Title Units – Realization of asset value and optimization of asset allocation

China’s Leading Office Landlord

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2019 Interim Results Summary

Notes: 1. Excluding rental income from the disposed Sky SOHO

2. Excluding net profit from the disposal of Sky SOHO

3. Excluding Gubei SOHO which opened in Feb 2019

• Revenue up 11.8% YoY [1]

• Net profit up 39.1% YoY [2]

• 94% average occupancy across mature properties [3]

• Gubei SOHO opened in Feb 2019, achieving 45% occupancy at the end of Jun

• Leeza SOHO to open in Sep 2019, adding to quality portfolio

• Net gearing ratio and average funding cost remained low at 44% and 4.8% respectively

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3• China's economic development faced considerable uncertainty both internally and externally in 1H2019, putting the office leasing

market under pressure

• In 1H2019, both Beijing and Shanghai saw vacancy rates increased while rents decreased compared with the 4th quarter of 2018

Vacancy RatesAverage Rent [1] (RMB/sqm/month)Vacancy Rates

Average Rent [1] (RMB/sqm/month)

Source: Cushman & Wakefield office market report

0%

2%

4%

6%

8%

10%

12%

14%

350

355

360

365

370

375

380

385

390

395

400

2018Q4 2019Q1 2019Q2

平均租金(左) 空置率(右)

0%

2%

4%

6%

8%

10%

12%

14%

280

285

290

295

300

305

310

315

320

325

330

2018Q4 2019Q1 2019Q2

平均租金(左) 空置率(右)

Beijing Grade A Office Shanghai Central Business Area

Beijing and Shanghai Office Market under Pressure

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Average rents (L) Vacancy rates (R) Average rents (L) Vacancy rates (R)

Notes: 1. Average rents were VAT-inclusive

SOHO China Outperformed the Market

• Average occupancy remained high at 94% across mature properties

• Gubei SOHO, which opened in Feb 2019, achieved 45% occupancy at the end of Jun

0%

20%

40%

60%

80%

100%

Galaxy/ChaoyangmenSOHO

QianmenAvenue

WangjingSOHO

GuanghualuSOHO II

SOHOTianshan Plaza

SOHOFuxing Plaza

BundSOHO

GubeiSOHO

94%

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0

500

1000

1500

2000

2015 2016 2017 2018

持有物业租金已售物业租金

Consecutively Increasing Rental to Further Grow by 25%-35% as New Projects Mature

• Rental income from retained properties enjoyed 24% CAGR over the past four years

• With Gubei SOHO opened in Feb 2019 and Leeza SOHO opening in Sep 2019, two new projects will add about 246,000 sqm of

leasable GFA to the portfolio

• New projects typically reach 90%+ occupancy within one year upon completion; 1st round rent reversion as high as over 15%

• Leeza SOHO has enormous potential of rent increase with 1st round reversion expected to exceed 50%

RMB million

0

500

1,000

1,500

2,000

1H2015 1H2016 1H2017 1H2018 1H2019

Rental Income from Retained Properties Rental Income from Disposed Properties

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23%77% 88% 12%

GFA Completed GFA under Development

100%

31 Dec 2018 30 Jun 2019 31 Dec 2019

Gubei SOHO opened in Feb 2019

Total GFA about 154,000 sqm

Leasable GFA about 112,000 sqm

Leeza SOHO to open in Sep 2019

Total GFA about 173,000 sqm

Leasable GFA about 134,000 sqm

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All Pipeline Projects to Complete by 2019, with Total Portfolio GFA of 1.4 Million Sqm

• Revenue of RMB889 million in 2019H1, up 11.8% from RMB795 million in 2018H1 (excl. rental income from the disposed Sky SOHO)

• Gross margin of 80% in 2019H1, compared with 76% in 2018H1

• Net profit of RMB565 million in 2019H1, compared with RMB406 million in 2018H1 (excl. non-recurring profit from the disposal of Sky SOHO)

Revenue up 11.8%

RMB million

795

53

848

644

0

200

400

600

800

1000

Revenue Gross Profit

Rental income from Sky SOHO

Gross margin 76%

2018H1

889

711

0

200

400

600

800

1000

Revenue Gross Profit

凌空SOHO租金收入

Gross margin 80%

2019H1

RMB million

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Healthy Debt Structure

86.1%

10.4%

3.5%

Long-term debt

Development Loan

Others

96.5%

3.5%

Onshore Debt

Offshore Debt

• Long-term asset matched with long-term debt, which

accounted for 86.1% of total debt – low financial risk

The development loans of Gubei SOHOand Leeza SOHO will be replaced withlong term debts as the projects ramp up

• Offshore debt only accounting for 3.5% of total debt

– low foreign-exchange risk

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Long-term Debt

RMB million 30 Jun 2019

Cash 2,259

Interest-Bearing Debt 17,761

Equity Attributable to Shareholders 35,166

Net Gearing Ratio 44%

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Net Gearing and Funding Cost Low at 44% and 4.8% respectively

• Dedicated to providing modern office service and deploying 5G, with strategic cooperation with China Mobile and Chine Telecom

• 1st batch of companies worldwide to equip office buildings with 5G network, which is now available in 7 retained or sold properties

• 5G based censors widely used in SOHO property management system, allowing more efficient and intelligent management

Leading Office Services – World’s 1st Batch Bringing 5G into Office Buildings

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Leading Office Services – Active Tenant Engagement

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ESG Practitioner – 7 Retained Properties Achieved LEED Gold Rating

• 7 of SOHO China’s retained properties achieved LEED-CS Gold rating

• Gubei SOHO, completed in Feb this year, achieved 19.03% building energy-saving compared with ASHRAE90.1 standard and 46.32% water conservation compared with LEED standard

Wangjing SOHO Bund SOHO Gubei SOHO Leeza SOHO [1]

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Guanghualu SOHO II SOHO Fuxing Plaza SOHO Tianshan Plaza

Note: 1. Leeza SOHO is under development and has received theLEED-CS Gold pre-certification

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ESG Practitioner – Long-Term Commitment to Educational Poverty Alleviation

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Pipeline Project Leeza SOHO

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Total leasable GFA: 133,780 sqm

Completion Year: Sep 2019

Located in the center of Lize Business District, with five Subway lines converge

here: Line 11, 14, and 16, as well as the Airport Express Line, and the Lize

Business District Financial Street connection Line

Connected to downtown check-in station and Airport Express to the new airport

in south Beijing

Lize Financial Business District to be developed as Beijing’s next financial district,

an extension of Financial Street

Pipeline Project Leeza SOHO

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Appendix

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Financial Results Summary – Income Statement

RMB million 2019H1 2018H1 YoY Change

Revenue 889 848

- Revenue excluding rental income from the disposed Sky SOHO 889 795 11.8%

Gross Profit 711 644

Gross Margin 80% 76%

Net Profit 565 1,093

- Net profit excluding non-recurring profit from Sky SOHO disposal 565 406 39.1%

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RMB million 30 Jun 2019 31 Dec 2018

Investment Properties 61,056 58,338

Total Cash [1] 2,259 5,696

Total Debt [1] 17,761 20,694

Total Asset [1] 68,898 70,999

Equity Attributable to Shareholders 35,166 34,747

Net Gearing Ratio 44% 43%

Note: 1. Decrease in Total Cash, Total Debt and Total Asset was mainly due to the repayment of Wangjing corporate bond of RMB 3 billion in 2019H1

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Financial Results Summary – Balance Sheet

Property Portfolio

# Status/Completion Date

Project Name CityTotal GFA

AttributableOffice Retail

Leasable GFA

sqm sqm sqm sqm

1 Completed Qianmen Avenue Beijing 54,691 54,543 - 54,543

2 Completed Galaxy/Chaoyangmen SOHO Beijing 56,341 45,101 15,036 30,065

3 Completed Wangjing SOHO T1&T2 Beijing 14,385 14,385 8,664 5,720

4 Completed Wangjing SOHO T3 Beijing 157,318 133,766 123,568 10,198

5 Completed Guanghualu SOHO II Beijing 117,179 94,279 63,308 30,971

6 Completed SOHO Fuxing Plaza Shanghai 124,461 88,234 46,344 41,890

7 Completed Bund SOHO Shanghai 104,280 72,826 51,317 21,509

8 Completed SOHO Tianshan Plaza Shanghai 156,991 97,751 74,497 23,254

9 Completed Gubei SOHO Shanghai 153,505 112,154 54,774 57,380

10Under Development/

Leeza SOHO Beijing 172,800 133,780 123,780 10,000September 2019 (expected)

Others [1] Beijing/Shanghai 251,121 64,443 29,353 35,090

1,363,072 911,262 590,641 320,620

11 Completed Commune by the Great Wall Beijing 29,666 29,666

12 Completed Boao Canal Village Hainan 8,669 8,669

Total 1,401,407 949,597 590,641 320,620

Note: 1. Others represent unsold units of projects previously developed by the Company

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Qianmen Avenue

Location Qianmen ,Tiananmen South, Beijing

Transportation Subway lines 1 & 2

All-in Cost RMB 1.86 billion

Total GFA Retail 54,691 sq.m.

Leasable GFA Retail 54,543 sq.m.

Design Firm Fei Chang Jian Zhu

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Location Wangjing, Beijing

Transportation Subway lines 13 & 15; Airport Express

Land Cost RMB 1.4 billion

Development Cost RMB 2.0 billion

Total GFA 157,318 sq.m.

Leasable GFA 133,766 sq.m.

Office 123,568 sq.m.

Retail 10,198 sq.m.

Completion Date Sep 2014

Design Firm Zaha Hadid Architects

Wangjing SOHO Tower 3

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Location Near Xintiandi, Puxi, Shanghai






Office 46,344 sq.m.

Retail 41,890 sq.m.

Completion Date Sep 2014

Design Firm GMP

SOHO Fuxing Plaza

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Location Central Business District, Beijing






Office 63,308 sq.m.

Retail 30,971 sq.m.

Completion Date Nov 2014

Design Firm GMP

Guanghualu SOHO II

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Location Bund, Shanghai

Transportation Bund's transportation hub





Office 51,317 sq.m.

Retail 21,509 sq.m.

Completion Date Aug 2015

Design Firm GMP

Bund SOHO

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Location Hongqiao Foreign Trade Center, Shanghai

Transportation Subway line 2


Est. Construction Cost RMB 1.9 billion



Completion Time Dec 2016

Design Firm KPF

SOHO Tianshan Plaza

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Location Hongqiao Foreign Trade Center, Shanghai

Transportation Subway line 10





Completion Time 2019

Design Firm KPF

Gubei SOHO

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Location Between Southwest 2nd & 3rd Ring Road, Beijing

TransportationSubway lines 11, 14 & 16; New Airport line; Lize Business

District Financial Street connection line (in planning)





Completion Time 2019

Design Firm Zaha Hadid Architects

Investment Properties Under Construction

Leeza SOHO

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THANK YOU

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2019 interim results presentation august 2019 · all pipeline projects to complete by 2019, with...

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