Soho China dangles 30 per cent discount on commercial properties to trim debt after aborted Blackstone deal
- Soho China plans to sell about 32,000 square metres from its portfolio in Beijing and Shanghai
- Proceeds from the sale will be used to cut debt, says chairman Pan Shiyi
The developer will sell about 32,000 square metres from its portfolio in the two cities at a 30 per cent discount, East Money Information reported on Thursday, which cited chairman Pan Shiyi as saying in a presentation to investors.
The size amounts to less than 4 per cent of its combined assets of 830,654 sq m in nine office and serviced apartment projects at the end of June 2021, according to the company’s interim report published in August.
“All the proceeds will be used to cut debt,” Pan was quoted as saying in response to market concerns about the group’s asset-sale plan and debt burden. To accelerate sales, Soho China would increase the agent commission fee to 4 per cent of the transaction value, he added.
The stock jumped 9 per cent to HK$1.58 in Hong Kong on the news, after earlier surging as much as 21 per cent. The price values the company at HK$8.22 billion (US$1.05 billion). Still, the stock has declined 8 per cent this year, following a 26 per cent slide in 2021.
Pan, who together with his wife Zhang Xin controls 63.9 per cent of the Beijing-based developer, is making the move after two failed attempts to sell their stake to US private equity giant Blackstone Group at a US$3.34 billion valuation.
