2018 Interim Results Presentation August 2018

Transcription

1 2018 Interim Results Presentation August 2018

2 Executive Summary - Aggressive expansion of SOHO 3Q - SOHO 3Q achieves 88% average occupancy - Operating profit of RMB1,530 million, up 144% YoY (before valuation gains on IPs) - SOHO China 1H2018 rental income up 17%* YoY - Borrowing cost low at 4.4% - Foreign debt accounts for only 4% of total debt, almost no foreign exchange risk * Net of the effect of disposal of Hongkou SOHO and Sky SOHO 1

3 Aggressive Expansion of SOHO 3Q 7 cities Beijing 31 centers Nanjing Shanghai Hangzhou Chengdu Chongqing 30,409 seats Shenzhen 2

4 Strong Demand for Co-working Office Space 88% average occupancy achieved at SOHO 3Q Centers Increasing number of large tenants (100+ seats) Fast occupancy ramp-up after opening 3

5 SOHO 3Q s Unique Competitive Advantages One of the Most Recognized Household Brand Names Pan Shiyi & Zhang Xin Influential Business Leaders Clear Advantage to Gain Market Awareness Leveraging SOHO China s Brand Name 25 years experience in commercial property operations 5 million square meters of property development SOHO China holds prime investment properties of 1.4 million sqm and manages prime offices of over 4 million sqm, which serve as base for SOHO 3Q s growth Standardized products and systematized management safeguard quality expansion 4

6 234 Events in 1H18, including Visit by President of France Emmanuel Macron 5

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10 High-quality Tenants 9

11 56% of SOHO 3Q Revenue from Large Clients with >100 Seats TMT Accounts for 53% of Total Tenants Revenue (by seats) Tenants mix (by seats) >100 seats 56% >100 seats seats 1-4 seats seats 5-10 seats TMT, 53% TMT Consulting Culture&Media Offline Sales Individuals Finance seats Designing 10

12 Tailor-made Offices for Large Clients Large clients have become a key focus of SOHO 3Q Require customized office design, facilities, and services Stronger demand and ability to pay for customized product 11

13 46% of Revenue from Orders of 6-12 Months Revenue (by term) 6-12 months 46% 6-12 months <=1 month 1-3 months 3-6 months >12 months 12

14 SOHO 3Q - The Future Office An Asset Light Business Model A Business Community for Entrepreneurs and Ideas A Provider of Customized Office Services

15 Financials in 1H

16 Operating Profit up 144% YoY Operating profit in 1H2018 (before adjustment for the current revaluation of investment properties) of RMB1,530mn vs. RMB628mn 1H2017, up 144% YoY Significant valuation gains in 1H2017 reflected reduced cap rates and significant increase in rental rates since the previous valuation Sales of Hongkou SOHO at 2.9% cap rate, Sky SOHO at 2.8% cap rate provide market evidence for large valuation gains in 1H

17 Operating Profit up 144% YoY RMB million 1H2018 1H2017 YoY% Change Turnover 848 1,070-21% -Leasing % -Sales N/A Gross profit % Gross margin 76% 69% Operating profit 2,010 6,783-70% - Operating profit before valuation gains 1, % - Valuation gains on IPs 480 6,155 Net Profit 1,093 3,982-73% 16

18 Rental Income up 17% YoY RMB 848 million rental income in 1H2018, up from RMB 818 million over 1H2017 Rental income from retained properties in 1H2018 increased by 17% from 1H2017, adjusted to exclude effect of the disposals of Hongkou SOHO and Sky SOHO in

19 SOHO China Properties Greatly Outperformed the Market in Spot Rate Growth SOHO China Properties General Market 1 Project Spot Rate % Change YoY City Spot Rate % Change YoY Wangjing SOHO 21% Guanghualu SOHO II 20% Beijing 4.5% Galaxy SOHO 9% SOHO Fuxing Plaza 18% SOHO Tianshan Plaza 4% Shanghai -0.5% Bund SOHO 1% 1. Data in JLL s 2Q2018 Reports on Office Buildings 18

20 RMB/sqm/day Public Bidding Sets Leasing Prices Strong demand for SOHO China properties Public bidding brings higher rental rates Bidding Rent Rate Previous Rent Rate Rent Growth 45 79% 80% % 50% 29 40% 33% 28% 60% 40% 20% % -20% -40% % -80% 5-100% 0 Unit in Guanghualu SOHO II Unit in Wangjing SOHO Unit in Wangjing SOHO Unit in SOHO Fuxing Plaza Unit in Bund SOHO Unit in Guanghualu SOHO II -120% Note: Rent rate in SOHO Fuxing Plaza based on Net Usable Area, others based on Gross Floor Area 19

21 97% Occupancy Achieved Throughout the Portfolio % 98% 96% 96% 96% 92% Wangjing SOHO Guanghualu SOHO II Qianmen Avenue Bund SOHO SOHO Fuxing Plaza SOHO Tianshan Plaza As at 30 June

22 Borrowing Cost 4.4%, Minimal FX Risk Average borrowing cost remains low at 4.4% as at 30 June 2018 Foreign debt accounts for only 4% of total debt, almost no foreign exchange risk Flexible funding channels, e.g. Operation loans, CMBS, Corporate Bond, Offshore loans etc. 21

23 Net Gearing Ratio Healthy at 43% RMB million 30-Jun Dec-17 Investment Properties 57,146 56,276 Total Cash 3,915 4,326 Total Debt 18,507 21,034 Equity Attributable to Shareholders 33,899 32,704 Total Assets 67,039 71,218 Net Gearing Ratio 43% 51% 22

24 Pipeline Project GUBEI SOHO 23

25 Pipeline Project GUBEI SOHO 24

26 Pipeline Project GUBEI SOHO Total leasable GFA: 113,416 sqm Completion Year: End of 2018 Located in the core area of the Hongqiao Foreign Trade Center in Shanghai s Changning District Right above Subway Line 10, and neighboring Gubei Takashimaya Shopping Mall and Gubei Fortune Plaza 25

27 Pipeline Project SOHO Leeza 26

28 Pipeline Project SOHO Leeza 27

29 Pipeline Project SOHO Leeza Total leasable GFA: 133,780 sqm Completion Year: Mid 2019 Located in the center of Lize Business District, right above intersection of subway Line14 and Line 16 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, as an extension of Financial Street 28

30 Property Portfolio # of Status/ Project Attributable Projects Completion Time Name City Total GFA Leasable Area Office Retail sq.m. sq.m. sq.m. sq.m. 1 Completed Qianmen Avenue Beijing 54,691 54,543-54,543 2 Completed Galaxy/Chaoyangmen SOHO Beijing 56,122 44,882 15,036 29,846 3 Completed Wangjing SOHO T1&2 Beijing 14,385 14,385 8,664 5,720 4 Completed Wangjing SOHO T3 Beijing 157, , ,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 123,332 72,826 51,317 21,509 8 Completed SOHO Tianshan Plaza Shanghai 166,377 95,385 74,497 20,888 Others 1 Beijing/ Shanghai 255,866 52,310 32,680 19, Under Development/ 2019 Under Development/ End of 2018 SOHO Leeza Beijing 172, , ,780 10,000 Gubei SOHO Shanghai 158, ,416 52,738 60,678 1,401, , , , Completed Commune by the Great Wall Beijing 29,666 29, Completed Boao Canal Village Hainan 8,669 8, Total 1,439, , , ,873 Notes: 1. Others represent unsold units of projects previously developed by the Company 29

31 Appendix 30

32 Financial Results Summary Income Statement RMB million 1H2018 1H2017 YoY% Change Turnover 848 1,070-21% -Leasing % -Sales N/A Gross profit % Gross margin 76% 69% Operating profit 2,010 6,783-70% - Operating profit before valuation gains 1, % - Valuation gains on IPs 480 6,155 Net Profit 1,093 3,982-73% 31

33 Financial Results Summary Balance Sheet RMB million 30-Jun Dec-17 Investment Properties 57,146 56,276 Total Cash 3,915 4,326 Total Debt 18,507 21,034 Equity Attributable to Shareholders 33,899 32,704 Total Assets 67,039 71,218 Net Gearing Ratio 43% 51% 32

34 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. Lettable GFA Retail 54,543 sq.m. Design Firm Fei Chang Jian Zhu 33

35 Wangjing SOHO Tower 3 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. Lettable GFA 133,766 sq.m. Office 123,568 sq.m. Retail 10,198 sq.m. Completion Date Sep 2014 Design Firm Zaha Hadid Architecture 34

36 SOHO Fuxing Plaza Location Near Xintiandi, Puxi, Shanghai Transportation Subway lines 10 & 13 Land Cost RMB 2.6 billion Development Cost RMB 1.8 billion Total GFA 124,461 sq.m. Lettable GFA 88,234 sq.m. Office 46,344 sq.m. Retail 41,890 sq.m. Completion Date Sep 2014 Design Firm GMP 35

37 Guanghualu SOHO II Location Central Business District, Beijing Transportation Subway lines 1 & 10 Land Cost RMB 1.3 billion Development Cost RMB 1.2 billion Total GFA 165,201 sq.m. Lettable GFA 94,279 sq.m. Office 63,308 sq.m. Retail 30,971 sq.m. Completion Date Nov 2014 Design Firm GMP 36

38 Bund SOHO Location Bund, Shanghai Transportation Bund's transportation hub Land Cost RMB 2.3 billion Development Cost RMB 1.5 billion Total GFA 141,043 sq.m. Lettable GFA 72,826 sq.m. Office 51,317 sq.m. Retail 21,509 sq.m. Completion Date Aug 2015 Design Firm GMP 37

39 SOHO Tianshan Plaza Location Hongqiao Foreign Trade Center, Shanghai Transportation Subway line 2 Land Cost RMB 1.9 billion Est. Construction Cost RMB 1.9 billion Total GFA 166,377 sq.m. Leasable GFA 95,385 sq.m. Completion Time Dec 2016 Design Firm KPF 38

40 Investment Properties Under Construction Gubei SOHO Location Hongqiao Foreign Trade Center, Shanghai Transportation Subway line 10 Land Cost RMB 3.3 billion Est. Construction Cost RMB 1.7 billion Total GFA 158,648 sq.m. Leasable GFA 113,416 sq.m. Completion Time 2019 Design Firm KPF 39

41 Investment Properties Under Construction SOHO Leeza Location Between Southwest 2nd & 3rd Ring Road, Beijing Transportation Subway lines 14 & 16 (in planning) Land Cost RMB 1.98 billion Est. Construction Cost RMB 1.8 billion Total GFA 172,800 sq.m. Leasable GFA 133,780 sq.m. Completion Time 2019 Design Firm Zaha Hadid Architects 40