Slide 1: China's Leading Office Landlord – 2016 Interim Results Presentation
CHINA’S LEADING OFFICE LANDLORD 2016 Interim Results Presentation 17 August 2016 0
Slide 2: Executive Summary
Executive Summary • Successful sale of SOHO Century Plaza at RMB3.297 billion, 1 3 3 21% higher than re-valued book value • Rental income up 60% YoY • SOHO 3Q, largest shared office community, 16,000 seats in Beijing and Shanghai • Financing cost down to 4.4% with no FX exposure • Special dividend o
Slide 3: Successful Sale of SOHO Century Plaza at RMB3.297bn
Successful Sale of SOHO Century Plaza at RMB3.297bn Sale of SOHO Investment SOHO Century Plaza Property • 21% higher than re-valued BV • High quality • 70% higher than cost • Unit price RMB76,700/sq.m. • High value • 3.4% gross yield • High liquidity • 3.7% of total leasable area Note: Re-valued BV
Slide 4: Rental Income up 60% YoY
Rental Income up 60% YoY • Rental income achieved 1 RMB700 million in 1H2016 3 3 • Up 60% from 1H2015, and up 14% from 2H2015 • Average occupancy 85%, including recently completed Bund SOHO and Hongkou SOHO Half Year Rental Income 1,000 800 RMB million 600 400 200 0 1H2012 2H2012 1H2013 2H2013 1H201
Slide 5: Low Vacancy and High Rent in Beijing and Shanghai Office Market
Low Vacancy and High Rent in Beijing and Shanghai Office Market • Office rent in Beijing and 1 Shanghai continued upward 3 trend 3 to historic high • Vacancy in city centers below 5% Market Average Rental Market Average Vacancy 1 2 1 2 Shanghai Beijing Shanghai Beijing 400 14% 12% 350 10% 8% 300 6%
Slide 6: All Pipeline Projects Complete by 2018
All Pipeline Projects Complete by 2018 • Pipeline projects will complete and contribute to rental income in succession Under Construction Completed 20% 30% 100% 70% 80% 2015 2016 2018 2016 New Completion: Full Completion • SOHO Tianshan Plaza 170,000 sq.m. 1.7 million sq.m. 2016 Under Construction:
Slide 7: SOHO 3Q - New Engine of Growth
SOHO 3Q - New Engine of Growth 6
Slide 8: Market Leader in Size
Market Leader in Size • 16,000 seats in Beijing and Shanghai • Average 850 seats per center, flagship center has +3,200 seats 3 3 1 Fast growth of SOHO 3Q scale 20,000 16,000 16,000 13,603 No. of Seats 12,000 10,048 8,000 4,000 2,083 1,484 0 1 Feb 2015 Jun 2015 2 Dec 32015 4 Jun 2016 Dec 52016 7
Slide 9: Market Leader in Product
Market Leader in Product Vibrant Business Community 3 3 1 8
Slide 10: Flexible Office Space
Flexible Office Space 9
Slide 11: Shared Common Area
Shared Common Area 10 10
Slide 12: "Co-workers" Redefined
Diverse Social Circle “Co-workers” Redefined 11
Slide 13: Free Wifi, Phone Booth, Printing, Conference Room
Free Wifi, Phone Booth, Printing, Conference Room 12
Slide 14: Rich Events Programme Designed to Build Community
Rich Events Programme Designed to Build Community 13
Slide 15: B-School Style Lecture Room
B-School Style Lecture Room 14
Slide 16: Indoor Amphitheater
Indoor Amphitheater 15
Slide 17: Market Leader in Tenant Quality
Market Leader in Tenant Quality • A wide variety of hyper growth internet and high technology companies and start-ups 3 3 1 16
Slide 18: Market Leader in Occupancy
Market Leader in Occupancy • Achieved 70% average occupancy • Full occupancy at most centers • New centers ramping up very fast 17
Slide 19: No Foreign Exchange Exposure
No Foreign Exchange Exposure Offshore debt only accounts for 6% of total debt • Prepaid syndicated loans of US$644 mm and HK$4,050 mm • Redeemed all outstanding senior notes of US$253 million Onshore vs. Offshore debt % 31 Dec 2014 31 Dec 2015 30 Jun 2016 Onshore 27% Onshore Offshore 44% Onshore 6%
Slide 20: Borrowing Cost Down to 4.4%
Borrowing Cost Down to 4.4% • Issued corporate bonds of RMB3 billion at 3.45% • Redeemed US$253 million senior notes at 7.125% • Onshore bank loan cost no more than PBoC prime rates 19
Slide 21: Net Gearing Ratio Still Low at 37%
Net Gearing Ratio Still Low at 37% RMB million 30 Jun 2016 Total Cash 3,380 Total Debt 16,239 Total Equity Attributable to Shareholders 35,206 Net Gearing Ratio 37% 20
Slide 22: High Dividend Yield
High Dividend Yield • Special dividend RMB0.19 per share • Dividends distributed from Bund 8-1 sale totalled RMB0.89 per share, representing 24% dividend yield RMB Dividend Payment 0.80 0.60 0.348 0.40 0.20 0.13 0.13 0.13 0.348 0.19 0.12 0.12 0.12 - 2012 2013 2014 2015 2016 Interim DPS Final DPS Spe
Slide 23: Appendix
Appendix 7 SOHO cHina
Slide 24: Financial Results Summary – Income Statement
Financial Results Summary – Income Statement RMB million 1H2016 1H2015 YoY % Change Turnover 727 393 85% Gross Profit 562 295 90% Gross Margin 77% 75% Profit from Operations 1,663 493 237% Net Profit 599 135 344% Adjusted Net Profit (excluding extraordinary 959 135 610% expenses*) Dividend per Share
Slide 25: Financial Results Summary - Balance Sheet
Financial Results Summary - Balance Sheet RMB million 30 Jun 2016 31 Dec 2015 Investment Properties 56,865 55,004 Total Cash 3,380 9,012 Total Debt 16,239 17,882 Total Equity Attributable to Shareholders 35,206 36,600 Total Assets 67,038 71,832 Net Gearing Ratio 37% 24% 24
Slide 26: Rental Income Breakdown & Occupancy Update
Rental Income Breakdown & Occupancy Update Occupancy Rental Income Project Name Leasable GFA Rate1 1H2016 31 July 2016 sq.m. RMB Million % Qianmen Avenue 35,317 51 89.5% SOHO Century Plaza 42,954 53 92.9% Wangjing SOHO Tower 3 133,766 172 92.1% SOHO Fuxing Plaza 88,234 62 93.0% Sky SOHO 128,175 65 8
Slide 27: Quality Rental Portfolio
Quality Rental Portfolio # of Status/ Project Attributable City Total GFA Office Retail Projects Completion Time Name Leasable Area sq.m. sq.m. sq.m. sq.m. 1 Completed Qianmen Avenue Beijing 54,691 54,691 54,691 2 Completed SOHO Century Plaza Shanghai 60,501 42,954 42,522 432 3 Completed Wangjing SO
Slide 28: Qianmen Avenue
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 54,691 sq.m. Design Firm Fei Chang Jian Zhu 27
Slide 29: SOHO Century Plaza
SOHO Century Plaza Location Near Lujiazui, Pudong, Shanghai Transportation Subway lines 2, 4, 6 & 9 All-in Cost RMB 1.98 billion Total GFA 60,501 sq.m. Lettable GFA 42,954 sq.m. Office 42,522 sq.m. Retail 432 sq.m. Design Firm AIM Architecture 28
Slide 30: Wangjing SOHO Tower 3
Wangjing SOHO Tower 3 Location Wangjing, Beijing Transportation Subway lines 13 & 15; Airport Express Land Cost RMB 1.4 billion Development Cost RMB 1.4 billion Total GFA 196,323 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
Slide 31: SOHO Fuxing Plaza
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 135,052 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 30
Slide 32: Guanghualu SOHO II
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 31
Slide 33: Sky SOHO
Sky SOHO Location Hongqiao Linkong Economic Zone, Shanghai Transportation Subway lines, high speed rail, airport Land Cost RMB 0.9 billion Development Cost RMB 1.5 billion Total GFA 194,360 sq.m. Lettable GFA 128,175 sq.m. Office 103,014 sq.m. Retail 25,161 sq.m. Completion Date Nov 2014 Design Firm
Slide 34: Hongkou SOHO
Hongkou SOHO Location Sichuan North Road, Hongkou, Shanghai Transportation Subway lines 3, 4 & 10 Land Cost RMB 1.5 billion Development Cost RMB 1.0 billion Total GFA 93,800 sq.m. Lettable GFA 70,042 sq.m. Office 65,304 sq.m. Retail 4,738 sq.m. Completion Date Jul 2015 Design Firm Kengo Kuma & Assoc
Slide 35: Bund SOHO
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 73,781 sq.m. Office 50,439 sq.m. Retail 23,342 sq.m. Completion Date Aug 2015 Design Firm GMP 34
Slide 36: Investment Properties Under Construction – SOHO Tianshan Plaza
Investment Properties Under Construction —— 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 170,238 sq.m. Leasable GFA 115,619 sq.m. Completion Time Dec 2016 Design Firm KPF 3
Slide 37: Investment Properties Under Construction – SOHO Leeza
Investment Properties Under Construction —— SOHO Leeza Between Southwest 2nd & 3rd Ring Road, Location 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 Nov 20
Slide 38: Investment Properties Under Construction – Gubei Project
Investment Properties Under Construction —— Gubei Project Hongqiao Foreign Trade Center, Location Shanghai Transportation Subway line 10 Land Cost RMB 3.3 billion Est. Construction Cost RMB 1.4 billion Total GFA 158,648 sq.m. Leasable GFA 113,416 sq.m. Completion Time Dec 2018 Design Firm KPF 37