Pan Shiyi: SOHO To Pform Fast Lane

Rental income will increase substantially.

In 2012, SOHO China announced that it would gradually bid farewell to the business model of bulk sale in three years, instead of holding the rental property.

Pan Shiyi, a real estate company that sells well, turned to a more challenging mode of holding. Frankly speaking, it was a major challenge for SOHO China, and the market was not optimistic.

The Guanghua Road SOHO phase two project, located in the core area of CBD, has been completed and delivered recently in Beijing.

Only in 2014, Beijing Wangjing SOHO, Guanghua Road SOHO, Shanghai Fuxing Road Project and Shanghai volley SOHO were completed and delivered successively.

"After the four projects are put into use, the rental income of the company will increase substantially next year."

Pan Shiyi said.

In September 29th, SOHO China announced that the group and Ctrip Shanghai and Ctrip related companies signed a framework agreement on the sale of a number of properties and supporting facilities of volun SOHO in September 26th, with a total consideration of about 3 billion 50 million yuan (HK $3 billion 850 million).

The properties include a total of 100 thousand and 200 square metres of property and a number of supporting facilities.

In this regard, Pan Shiyi explained that in terms of investment design, Beijing and Shanghai were 1:1, but later discovered that Shanghai invested more than 50 billion yuan, so they sold part of the property.

As for the sale of part of the property by SOHO, Pan Shiyi said that he did not want to sell, but Ctrip can bring more people and activities to the project, and then promote project leasing.

Pan Shiyi stressed that next year there is basically no sales, "rental income will increase substantially, will exceed sales (revenue)."

After the pformation of business mode, SOHO China's land acquisition strategy has changed accordingly.

"The current strategy of taking land is to minimize the amount of cash, mainly to convert cash into projects to control the net debt ratio level."

Pan Shiyi said that the current net debt ratio of SOHO China is about 15%, and the cash in the future account will exceed 20 billion yuan, and the net debt ratio control target will remain at around 50%.

For more than two years SOHO China's pformation and operation experience, Pan Shiyi said fine management is the company's most energy to do.

"In the past, the average number of people who bought SOHO Chinese office buildings was 50 million yuan, and now the customers of each rental SOHO office in China pay 100 thousand yuan -20 yuan per month, the gap between them is very large."

Pan Shiyi said, so two and a half years since the pformation of the company, despite the pressure of the market, but looking back, the pformation is right.

The pformation of China's business mode from bulk sale to holding is also accelerating the upgrading of product concept.

It is reported that energy saving, air and water purification have become a highlight in many projects built by SOHO in China this year.

Pan Shiyi said, "the energy consumption of our building now is 55.7 degree / square meter / month, and the energy consumption standard recommended by Chinese office buildings is 85 degree / square meter / month.

The daily air quality of the SOHO project can reach the national standard of China, that is, 75 micrograms / cubic meter, and the number of days above 90% is even below 35 micrograms.

The change of Internet thinking will also become the direction of SOHO China's future change.

Pan Shiyi disclosed that in February 1st of next year, SOHO China will officially launch a platform for cooperation with the Internet, and twenty or thirty projects will be involved.

Pan Shiyi disclosed that the second step pformation does not need to invest too much money. Instead, it plans to pform the project with the Internet so that space meets the needs of the office in the Internet age.

At present, some technical talents have been excavated from Internet Co, but cooperation with Internet Co has not been considered for the time being.

It is understood that this pformation involves all aspects of SOHO China, from management development to rental, will also extend to new cities, and all businesses will be covered.

The details will be announced in February 1st next year.

For the current economic and policy, Pan Shiyi said: whether the economy can recover or not depends on the interest rate cut. In fact, it can be seen from the office rental industry.

In the early years, "the main customers of our project, Jian Wai SOHO and Hyundai, are coal bosses. Now there are coal bosses, and then the iron and steel enterprises. At that time, the owners of Tangshan iron and steel enterprises bought us Sanlitun SOHO, which cost 300 million yuan or 500 million yuan at random.

But now our office building, especially Wangjing SOHO, has more than 90% of its customers are Internet companies.