soho-全年ir-20150304
DESCRIPTION
SOHO China 2014 Earnings Investor PresentationTRANSCRIPT
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Chinas leading prime office landlord focused exclusively in Beijing and
Shanghai.
Timely completion of four IPs with a total GFA of 644,500 sq.m. in 2014.
Respectable rental income growth in 2014, up 51.7% YoY; rich new IP
pipeline to drive future rental growth in 2015 and beyond.
Stringent control over group overhead costs and property expenses.
Prime office assets support further NAV expansion.
Focus on shareholder value: counter-cyclical investment approach, high
dividend yield and good corporate governance.
SOHO 3Q a highly scalable business that meets the rapidly rising demand
for short-term coworking space.
Summary
Note: 1. IP means Investment Property in this presentation.
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Content
Page #
SOHO China Overview 3
2014 Financial Performance 10
Investment Property Portfolio Update 14
Capital Management 31
Green Initiatives 34
Company Outlook 37
SOHO 3Q Introduction 39
Appendix 1 Beijing and Shanghai Office Market Update 56
Appendix 2 Map of Beijing and Shanghai 58
Appendix 3 SOHO China IP Profile 60
Appendix 4 Pictures of Four Projects Completed in 2014 64
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SOHO China Overview
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2.95
9.60
0.00
2.00
4.00
6.00
8.00
10.00
12.00
2007 2008 2009 2010 2011 2012 2013 2014
HK
D/s
hare
4
Listed on the HKSE on 8 October 2007 (Stock Code 410.HK).
Total return since listing in 2007: +16.4% CAGR.
Consistent dividend policy with an average yield of 5.3% over the past five years.
Current dividend yield is 5.7%.
Significant Shareholder Value Creation Since Listing
0.12 0.14
0.12 0.12 0.12 0.10 0.10
0.20
0.14 0.11 0.13 0.13 0.13
0
0.05
0.1
0.15
0.2
0.25
0.3
2007 2008 2009 2010 2011 2012 2013 2014
Interim DPS Final DPS
DP
S R
MB
/Share
Note: 1. Total return = increase in book NAV + dividend paid.
2. Based on 2014 full year DPS and stock closing price on 27 Feb 2015.
Total DPS = RMB1.66/share since listing
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SOHO Chinas Business Model
5
Transitioned in 2H 2012 - From build-to-sell to build-and-hold model.
Brand - SOHO China is one of the most recognizable brands in China.
Design hire leading international architects to create innovative landmarks.
Asset Management Asset Investment Capital Management
Increase occupancy rate
Refine tenant mix Improve property
management services
Control property expenses
Energy conservation and air purification
Counter-cyclical investment strategy
Identify attractive investment opportunities in Beijing and
Shanghai
Average investment hurdle rate of 10% (yield-on-cost)
Streamline investment property portfolio and recycle capital
New generation office - SOHO 3Q
Strong credit ratings (Ba1/BB+) and low
funding cost
Diversified funding sources
Extend debt maturity Minimize currency and
interest rate risks at
reasonable costs
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The largest Hong Kong-listed prime office landlord in Beijing and Shanghai.
We focus exclusively in the two cities.
Has an aggregate office portfolio of 1.7 million sq.m., representing
approximately 5.9% of the total Grade A office inventory in the two cities.
Leading Office Landlord in Beijing and Shanghai
Note: 1. By Total GFA, excluding the pure retail project Qianmen Avenue.
2. By above-ground total GFA of grade A office space as of 31 Dec 2014.
3. Completed and currently under construction attributable office GFA in Beijing and Shanghai.
4. By Leasable/ Saleable GFA.
1.70
0.84
0.54
0.31 0.31 0.28 0.19 0.16 0.15 0.11
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0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
SOHO
China
Shui On
Land*
Franshion
Properties
Hui Xian
REIT*
COLI Kerry
Properties
CR Land* Hang Lung
Properties
Spring REIT Swire
Properties
Tota
l G
FA
sq.m
.
4
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Four Projects Completed in 2014
Wangjing SOHO Beijing (Sep 2014) Guanghualu SOHO II Beijing (Nov 2014)
SOHO Fuxing Plaza Shanghai (Sep 2014) Sky SOHO Shanghai (Nov 2014)
Fully Leased Leasing
Leasing 87% Leased
Note: 1. As of 27 Feb 2015, including SOHO 3Q.
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47% of Investment Properties Have Been Completed
Investment Property Completion Schedule
Under Construction Completed
(000 sq.m. Total GFA):
Before 2014 New Completion 2014 2015 2016 2018
193.7 644.5 480.0 170.0 320.0
1.8 m sq.m.
18%
82%
100%
2014 2015 2016 2018
53%
47% 28%
72%
Note: 1. By Total GFA, including pure retail project Qianmen Avenue.
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Proven Leasing and Property Management Track Record
Leased over 4.1 million sq.m. to date.
Currently managing over 3.3 million sq.m..
Holding approximately 1.8 million sq.m. of investment properties.
* Projects currently not managed by SOHO.
0
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100
150
200
250
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Build-to-Sell Build-and-Hold
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sq
.m.
Before 2009 2009 2010 2011 2012 2013 2014 2015 2016 2018
Note: 1. By Total GFA, including pure retail project Qianmen Avenue.
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2014 Financial Performance
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The decline in turnover and net profit in 2014 was driven by the reduction in
property sales.
Rental income grew strongly by 51.7% YoY to RMB424 million.
Further RMB3.1 billion pre-tax valuation gain on IPs in 2014.
2014 total DPS of RMB0.25/share remains unchanged from 2013.
2014
RMB million
2013
RMB million
% Change
YoY
Turnover 6,098 14,621 -58.3%
Rental income 424 279 +51.7%
Property development 5,674 14,342 -60.4%
Gross profit 3,078 8,114 -62.1%
Gross profit margin 50.5% 55.5% -5.0 ppt.
Valuation gains on investment properties 3,125 4,220 -25.9%
Net profit 4,080 7,388 -44.8%
Core earnings (excluding valuation gains on investment properties) 1,778 4,440 -60.0%
Basic EPS (RMB/Share) 0.781 1.492 -47.7%
DPS (RMB/Share) 0.25 0.25 -
Interim DPS 0.12 0.12 -
Final DPS 0.13 0.13 -
2014 Results Reflect the Change in Business Model
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2014 Consolidated Balance Sheet
31 Dec 2014
RMB million
31 Dec 2013
RMB million
Current Assets 17,731 22,012
Non-current Assets 59,088 55,811
Of which: Investment Properties 52,875 48,728
Total Assets 76,819 77,823
Current Liabilities 11,517 19,251
Non-current Liabilities 24,842 20,086
Total Liabilities 36,359 39,337
Net Assets 40,460 38,486
Cash and Bank Deposits 12,478 10,650
Interest Bearing Debt 20,262 17,070
Net Debt 7,784 6,420
Net Gearing Ratio (%) 19.2% 16.7%
Interest Coverage Ratio (x) 6.6x 10.1x
Average Interest Rate (%) 5.7% 6.3%
Book NAV per share (RMB) 7.58 7.08
Book NAV per share (HKD) 9.60 9.00
Note: 1. Net gearing ratio = net debt/net asset
2. Interest coverage ratio = EBITDA/gross interest expense
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Net gearing ratio remained low at 19% as of 31 December 2014 (17% as of 31 December 2013).
Disposed of three projects in Shanghai for a total consideration of RMB8.3 billion .
Cash on hand of over RMB 12.5 billion, more than sufficient to fund the RMB7.9 billion CAPEX required to
complete all the IPs currently under construction.
Healthy interest coverage ratio of 6.6x.
Low Net Gearing Ratio and Sufficient Cash Reserves
148%
111%
96%
77%
67%
66%
57%
45%
44%
39%
31%
29%
28%
19%
0% 25% 50% 75% 100% 125% 150%
Evergrande
R&F
Agile
Greentown
Country Garden
Shui On
Shimao
Franshion
Sino Ocean
CR Land
Vanke-A
Kerry
COLI
SOHOSOHO China
Note: 1. For the year ended 31 Dec 2013.
2. For the year ended 31 Dec 2014.
Source: Company reports
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Investment Property Portfolio Update
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Quality Investment Property Portfolio
# of
Projects
Status/
Completion Date
Project
Name City Interests
Total planned
GFA
Leasable
GFA Office Retail Hotel
Valuation
Dec 14
% sq.m. sq.m. sq.m. sq.m. sq.m. RMB Million
1 Completed Qianmen Avenue Beijing 100% 54,700 54,691 54,691
2 Completed SOHO Century Plaza Shanghai 100% 59,000 42,954 42,522 432
3 Completed Wangjing SOHO T3 Beijing 100% 170,000 127,894 123,568 4,326
4 Completed Guanghualu SOHO II Beijing 100% 166,000 95,906 64,032 31,874
5 Completed Sky SOHO Shanghai 100% 171,500 128,128 102,964 25,164
6 Completed SOHO Fuxing Plaza Shanghai 100% 137,000 88,328 57,039 31,289
Others Beijing/
Shanghai 100% 80,000 62,349 23,888 38,461
7 Under Development/
May 2015 Bund SOHO Shanghai 90% 130,000 75,475 51,615 23,860
8
Under Development/
August 2015
Hongkou SOHO Shanghai 100% 96,000 65,069 60,729 4,340
9
Under Development/
November 2016
SOHO Tianshan Plaza Shanghai 100% 170,000 111,684 72,643 15,139 23,902
10
Under Development/
November 2018
SOHO Leeza Beijing 100% 170,000 124,000
11
Under Development/
December 2018
Gubei Project Shanghai 100% 150,000 105,476
1,554,200 1,081,954 52,875
12
Joint-Controlled
Entity/
December 2015
8-1 Project Shanghai 50% 213,000 145,485
13 Completed Commune by the Great Wall Beijing 100% 30,714 30,714
Total 1,797,914 1,258,153
Note: 1. Please refer to Map on Page 58 and 59 for locations.
2. Including office and retail spaces of three projects: The Exchange SOHO, Wangjing SOHO Tower 1 and 2, and Galaxy SOHO.
3. Except for Qianmen Avenue, this represents functional retail space which focuses on the provision of daily necessity services to the office tenants.
4. These represent the GFAs attributable to the Company.
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The total value of SOHO Chinas IPs amounted to RMB52.9 billion as of 31
December 2014.
Property Valuation Methodology
IP Type Completed Under Construction
CBRE
Valuation
Methodology
Market approach Cost approach
Income capitalization
Rates used:
Office: 4.70% 6.00%
Retail: 4.75% - 6.00%
Residual method
Note: 1. The above capitalization rates adopted in 2014 were similar to those in 2013.
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SOHO Chinas Unique Leasing Model
Real-time, real-price online leasing platform; no exclusive leasing agents, no brokers. Standardized terms on Payment and Lease contract. Target fast growing domestic companies.
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Standardized Leasing Terms - Office
Beijing Shanghai
Tenancy 2-5 years
Security Deposit 2 months 3 months
Rental Payment Terms Every 3 months Every month
Built-in
Rental Rate Step-ups 15% from the 4th year onwards
Rent Free Period 2 months for office space 2,000sq.m.
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Source: Savills
Beijing Rental Demand Breakdown Beijing Rental Demand CAGR (2008 - 2014)
Shanghai Rental Demand Breakdown Shanghai Rental Demand CAGR (2008 - 2014)
Domestic Tenants the Key Growth Driver in Both Cities
27%, 1,686
70%, 6,522 73%, 4,559
30%, 2,795
0
2,000
4,000
6,000
8,000
10,000
2008 2014
Domestic Foreign
,00
0 L
ett
ab
le G
FA
sq
.m.
9,317
6,245 Total
Market, +6.9%
Domestic Tenants, +25.3%
Foreign Tenants,
-7.8%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Supported by the strong branding, our tenant base mainly consists of domestic companies.
12%, 409
34%, 3451
88%, 3000
66%, 1778
0
1,000
2,000
3,000
4,000
5,000
6,000
2008 2014
Domestic Foreign
,00
0 L
ett
ab
le G
FA
sq
m
3,409
5,229
Total Market , +7.4%
Domestic Tenants, +27.8%
Foreign Tenants, +2.4%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
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Clean Air Enhances Leasing
The first commercial developer in China to provide PM2.5 free air in all developments built since 2012.
An important feature to attract tenants in Beijing and Shanghai, both suffer from PM2.5 pollution.
Enhances property value.
75 g/m 35 g/m
0
100
200
300
400
500
25-Mar-2014 25-Apr-2014 25-May-2014 25-Jun-2014 25-Jul-2014 25-Aug-2014 25-Sep-2014 25-Oct-2014 25-Nov-2014 25-Dec-2014
Outdoor PM2.5 Reading Wangjing SOHO Indoor PM2.5 Reading
Chinese Stardard - limit of average concentration in 24 hours US stardard - limit of average concentration in 24 hours
75 g/m
35 g/m
0
50
100
150
200
16-Aug-2014 15-Sep-2014 15-Oct-2014 14-Nov-2014 14-Dec-2014
Outdoor PM2.5 Reading SOHO Fuxing Plaza Indoor PM2.5 Reading
Chinese Stardard - limit of average concentration in 24 hours US stardard - limit of average concentration in 24 hours
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Strategy on Retail Spaces
Retail spaces normally account for 20-25% of the total leasable GFAs of our office buildings. Functional retail services cater to our office tenants. In view of a difficult retail market, we are converting certain retail spaces into office spaces
or SOHO 3Q offices.
Actual Pictures of Retail Spaces in SOHO China IPs
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High Potential for Positive Rental Reversions
Rental rates rise significantly after the completion of first-round leasing.
Wangjing SOHO Tower 3s rental rate grew 26% during its first-round
leasing in 10 months due to high demand.
Note: 1. Prevailing market rate.
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
The Exchange SOHO SOHO Century Plaza Wangjing SOHO Tower 3
Initial Rent Passing Rent as of 31 Dec 2014 Spot/Market Rate
RM
B/s
q.m
./d
ay
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Overall rental income grew significantly by 51.7% YoY to RMB424 million in
2014.
Improvement in average occupancy rates of SOHO Century Plaza and
Qianmen.
New rental contribution from Wangjing SOHO Tower 3 and SOHO
Fuxing Plaza; both IPs were completed in 2H2014.
Robust growth in rental income during 2015 is expected.
Guanghualu SOHO II and Sky SOHO to begin to generate meaningful
rental income.
Bund SOHO and Hongkou SOHO to be completed in May and August
of 2015 respectively.
Strong Momentum in Rental Growth
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Rental Income Breakdown
Project
Name
Completion
Date
Leasable
GFA
Rental
Income
2014
Rental
Income
2013
YoY
Change
Occupancy
Rate
31 Dec 2014
Occupancy
Rate
31 Dec 2013
sq.m. RMB Million RMB Million % % %
Tiananmen South (Qianmen) 2010/2012 35,317 108 82 31.7% 76.2% 65.4%
SOHO Century Plaza 2012 42,954 108 87 24.1% 94.5% 99.0%
Wangjing SOHO Tower 3 Sep 2014 127,894 48 N/A N/A 68.9% N/A
SOHO Fuxing Plaza 1 Sep 2014 88,328 31 N/A N/A 64.4% N/A
Sky SOHO Nov 2014 128,128 2 N/A N/A 7.3% N/A
Guanghualu SOHO II Nov 2014 95,906 N/A N/A N/A 6.0% N/A
Others 63,390 127 110 15.5%
Total 581,917 424 279 51.7%
Note: 1. Spot/Market rental rates for Wangjing SOHO Tower 3 and SOHO Century Plaza have reached RMB 7.7/ sq.m./day and RMB 9.0/sq.m./day respectively.
2. Others represent unsold units of projects previously developed by the Company.
3. Fully leased as of 27 Feb 2015, including SOHO 3Q.
4. 87% of occupancy rate as of 27 Feb 2015, including SOHO 3Q.
3
4
1
2
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Qianmen Avenue
Location Qianmen Avenue, Tiananmen South, Beijing
Transportation Subway lines 1 & 2
All-in Cost RMB 1.7bn (RMB 31,084/sq.m.)
Total GFA Retail 54,700 sq.m.
Lettable GFA Retail 54,691 sq.m.
Occupancy Rate 76.2%
Design Firm Fei Chang Jian Zhu
Tenant Mix (by GFA)
Lease Expiration Profile (by GFA)
Note: 1. Occupancy rate as of 31 Dec 2014.
Tourism/ Experience,
32%
Restaurant /Cafe, 28%
Retail , 27%
Others, 8%
Services, 5%
2016, 4%
2017, 17%
2018, 14%
2019, 40%
To Be Leased,
24%
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SOHO Century Plaza
Location Near Lujiazui, Pudong, Shanghai
Transportation Subway lines 2, 4, 6 & 9
All-in Cost RMB 1.97bn (RMB 45,879/sq.m.)
Total GFA 59,000 sq.m.
Lettable GFA 42,954 sq.m.
Office 42,522 sq.m.
Retail 432 sq.m.
Occupancy Rate 94.5%
Design Firm AIM Architecture
Note: 1. Occupancy rate as of 31 Dec 2014.
Finance/ Insurance,
83%
Legal, 7%
Others, 4%
Tech/ Internet , 3%
Energy, 2%
Trade, 1%
Tenant Mix (by GFA)
Lease Expiration Profile (by GFA)
2016, 35%
2017, 51%
2018, 6%
After 2020 , 2%
To Be Leased , 6%
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Wangjing SOHO Tower 3
Location Wangjing, Beijing
Transportation Subway lines 13 & 15; Airport Express
Land Cost RMB 1.4bn (RMB 10,229/sq.m.)
Est. Development Cost RMB 1.2bn (RMB 9,127/sq.m.)
Total GFA 170,000 sq.m.
Lettable GFA 127,894 sq.m.
Office 123,568 sq.m.
Retail 4,326 sq.m.
Occupancy Rate 68.9%
Latest Occupancy Rate Fully Leased
Completion Date Sep 2014
Design Firm Zaha Hadid Architecture
Note: 1. Occupancy rate as of 31 Dec 2014.
2. Occupancy rate as of 27 Feb 2014, including SOHO 3Q.
Tenant Mix (by GFA)
Lease Expiration Profile (by GFA)
Tech/ Internet , 71%
Finance/ Insurance,
13%
Others, 9%
Medicine, 1%
Legal/ Consultancy,
1%
Trade, 1%
2017, 5%
2018, 9%
2019, 46%
2020, 9% To Be
Leased, 31%
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SOHO Fuxing Plaza
Location Near Xintiandi, Puxi, Shanghai
Transportation Subway lines 10 & 13
Land Cost RMB 2.6bn (RMB 29,152/sq.m.)
Est. Development Cost RMB 1.3bn (RMB 14,664/sq.m.)
Total GFA 137,000 sq.m.
Lettable GFA 88,328 sq.m.
Office 57,039 sq.m.
Retail 31,289 sq.m.
Occupancy Rate 64.3%
Latest Occupancy Rate 86.8%
Completion Date Sep 2014
Design Firm GMP
Tenant Mix (by GFA)
Lease Expiration Profile (by GFA)
Finance/
Insurance, 36%
Medicine, 22%
Retail , 13%
Legal/ Consultancy,
9%
Tech/ Internet , 7%
Media/ Marketing ,
6%
Trade, 4%
Others, 2%
Energy, 1%
2017, 17%
2018, 14%
2019, 16%
2020, 9%
After 2020, 9%
To Be Leased,
36%
Note: 1. Occupancy rate as of 31 Dec 2014.
2. Occupancy rate as of 27 Feb 2014, including SOHO 3Q.
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Financial Institutions
Consumer and Fashion
Service and Others
Consulate Generals
France Germany Pakistan Turkey
Electronics, Technology and Entertainment
Selected SOHO China Office Tenants
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Financial Institutions
Consumer and Fashion
Food and Beverage
Electronics, Technology and Entertainment
Selected SOHO China Retail Tenants
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Capital Management
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Diversified Funding Sources
Capital Management
Offshore Onshore
Total Interest-bearing
Debt
Syndicated/Bilateral
Loans
High Yield
Bonds
Construction
Loans
Operation
Loans
RMB20.3 billion
4 - 5 years
at Libor/Hibor + margin
5-year US$600m
5.75% due Nov 2017
3 - 5 years
at PBOC prime rate
10 - 15 years
at PBOC prime rate
10-year US$400m
7.125% due Nov 2022
Debt Currency Profile Debt Type Profile
28%
18%
54%
RMB HKD USD
Debt Interest Rate Split
Note: Total interest-bearing debt amounted to RMB20.3 billion as of 31 Dec 2014.
42%
58%
Fixed Rate Floating Rate
30%
43%
28%
High Yield Bonds Offshore Bank Loans
Onshore Bank Loans
We plan to gradually reduce exposure to USD debt due to uncertainty with the direction of USD/RMB exchange rate.
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33
Lowest Funding Cost Amongst Peers
Note: 1. Including major listed non-state owned PRC developers.
2. 2013 gross interest expense (including capitalized interest expenses) / average debt balance as of 31 December 2012 and 2013
3. SOHO Chinas effective interest rate is for the year ended 31 Dec 2014.
Source: Company reports
Effective Interest Rate (%)
9.6 9.3
9.0 8.8 8.7
8.3 8.2 8.0
7.6
5.7
-
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
Evergrande Vanke Greentown Shimao CountryGarden
R&F Shui On Agile Longfor SOHO ChinaSOHO China
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34
Green Initiatives
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35
Since 2009, all our developments have received Silver or Gold certifications
from the LEED rating system of the US Green Building Council (USGBC).
Since 2013, indoor air quality in our new buildings has surpassed:
the standard in the PRC at all times and in the US for 90% of the time.
Environmentally Conscious Developer
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Energy Conservation Reduces Cost by Up To 30%
In October 2013, we established the SOHO China Energy Conservation Center
to monitor energy consumption of our buildings and identify areas of
potential energy savings.
Target 30% energy savings for all SOHO Chinas newly-built projects.
11.4
51.5
63.1 69.7
74.1 83.5
0
10
20
30
40
50
60
70
80
90
2014 2015 2016 2017 2018 2019
Estimated Energy Savings
mill
ion
kw
h /
ye
ar
8.0
36.0
44.2
49.0 52.0
58.4
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
2014 2015 2016 2017 2018 2019
Estimated Cost Savings
RM
B m
illio
n/y
ea
r
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Company Outlook
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Chinas Leading Prime Office Landlord
Note: 1. Share price as of 27 Feb 2015.
2. Book NAV as of 31 Dec 2014 and RMB/HKD exchange rate as of 31 Dec 2014.
3. Consensus estimate of equity research analysts
Strong growth in recurring rental income; stringent cost controls.
Prime office properties in Beijing and Shanghai with strong appreciation potential.
Disciplined investment approach.
Track record of good corporate governance.
Consistent dividend policy; 5.7% dividend yield.
42% Discount
5.55
9.61
10.61
0.00
2.00
4.00
6.00
8.00
10.00
12.00
Share Price Book NAV Per Share Estimated NAV Per Share
HK
$ S
hare
48% Discount
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39
SOHO 3Q Introduction
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40
-
What is the SOHO 3Q Concept
41
-
Coworking is sweeping the world
42
-
you can rent a single desk (1,000/person/week)
43
-
you can rent week-to-week
44
-
and enjoy FREE amenities like:
Wi-Fi, Coffee, Conference Rooms, Pan Apples and more
45
-
you just need to bring your computer or mobile phone
46
-
and book a space with: any device, anytime, anywhere
47
-
and pay for your space directly on your device.
48
-
What are SOHO 3Qs Current and Future Plans
49
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50
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51
-
The Evolution of Mobile Workers Office Choices
52
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EVOLUTION OF OFFICE CHOICES FOR MOBILE WORKERS
Notes: 1. Workspace tenants typically sign leases with rolling three-month break options 2. In the future, possible that SOHO 3Q will partner with VC companies where they would invest in 3Q tenants. SOHO China/3Q would not invest its own money 3. Regus Annual Report 2013 4. Servcorp has 4,275 individual offices. 21,375 seat number is an estimate using a blended average of 5 seats per office 5. Microsoft Accelerators is a division of Microsoft and does not break-out revenue or valuation metrics for analysis 6. Workspace Revenue number also includes ~10 industrial buildings. 30,000 seats is based upon comments by executive about customers 7. Based on most recent round of fundraising, Dec-2014 8. 2015YE Estimates. Revenue estimate is full year run-rate at 12 offices at full capacity of 8,000 members and current pricing levels blended between offices and desks
1980sServiced
Offices
1980sServiced
Offices
2000sIncubator
Spaces
NACoworking
Spaces
2010Coworking
Spaces
2015Coworking
O2OCurrently NA
2
53
1,8453 US$2,370mn 304,7743 US$2.9bn US$9,515
122 US$191mn 21,3754 US$470mn US$21,988
10 NA5 NA5 NA5 NA5
84 US$42mn6 30,000E6 US$857mn US$28,566
23 US$150mn 14,500 US$5.0bn7 US$344,828
108 US$83mn8 8,0008 ? ?
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54
http://tinyurl.com/3Qiosapp
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55
Appendix
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56
Beijing and Shanghai are Chinas only true global cities, on par with major
international cities, with the deepest and largest office markets in China.
Appendix 1 Beijing and Shanghai Office Market Update
Source: Savills Office Research, 4Q 2014.
Beijing Shanghai Shenzhen Guangzhou Tianjin Shenyang Chengdu Chongqing
Prime Office rents
(RMB/sq.m./day) 10.4 8.6 7.3 5.0 4.7 4.5 3.3 3.6
Vacancy 4.8% 8.6% 8.3% 11.9% 27.3% 29.7% 30.0% 35.4%
Market Size
(million sq.m.) 9.8 5.7 4.5 3.5 0.6 0.9 1.9 1.0
London Hong Kong Tokyo Singapore New York Frankfurt Chicago Sydney
Prime Office rents
(RMB/sq.m./day) 25.6 16.4 15.3 14.7 14.0 9.3 7.1 6.4
Vacancy 4.0% 3.3% 3.2% 3.6% 12.7% 11.6% 14.9% 9.0%
Market Size
(million sq.m.) 9.1 7.2 12.2 2.5 18.7 12.0 6.1 4.9
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57
Note: Savills Office Research, 4Q 2014.
Beijing Shanghai
Rental rates have stablized at high levels amid low vacancy rates in both cities.
Appendix 1 Beijing and Shanghai Office Supply and Demand
0%
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58
Appendix 2 - Map of Beijing
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59
Appendix 2 - Map of Shanghai
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Appendix 3 SOHO China Beijing IP Profile
60
Guanghualu SOHO II SOHO Leeza
Location Between Southwest 2nd & 3rd Ring Road
Transportation Subway lines 14 & 16 (in planning)
Land Cost RMB 1.9bn (RMB 15,500/sq.m.)
Est. Development Cost RMB 1.7bn (RMB 14,000/sq.m.)
Total GFA 170,000 sq.m.
Lettable GFA 124,000 sq.m.
Office TBD
Retail TBD
Completion Date Nov 2018
Design Firm Zaha Hadid Architecture
Location CBD
Transportation Subway lines 1 & 10
Land Cost RMB 1.4bn (RMB 14,975/sq.m.)
Est. Development Cost RMB 1.2bn (RMB 12,776/sq.m.)
Total GFA 166,000 sq.m.
Lettable GFA 95,906 sq.m.
Office 64,032 sq.m.
Retail 31,874 sq.m.
Completion Date Nov 2014
Design Firm GMP
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Appendix 3 SOHO China Shanghai IP Profile
61
Sky SOHO Hongkou SOHO
Location Hongqiao Linkong Economic Zone
Transportation Subway lines, high speed rail, airport
Land Cost RMB 1.6bn (RMB 7,046/sq.m.)
Est. Development Cost RMB 2.3bn (RMB 10,088/sq.m.)
Total GFA 343,000 sq.m.
Lettable GFA 228,296 sq.m.
Office 194,439 sq.m.
Retail 33,857 sq.m.
Completion Date Nov 2014
Design Firm Zaha Hadid Architecture
Location Sichuan North Road, Hongkou
Transportation Subway lines 3, 4 & 10
Land Cost RMB 1.5bn (RMB 23,052/sq.m.)
Est. Development Cost RMB 0.8bn (RMB 12,756/sq.m.)
Total GFA 96,000 sq.m.
Lettable GFA 65,069 sq.m.
Office 60,729 sq.m.
Retail 4,340 sq.m.
Completion Date Aug 2015
Design Firm Kengo Kuma & Associates
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Appendix 3 SOHO China Shanghai IP Profile
62
Bund SOHO Bund 8-1
Location Bund, Shanghai
Transportation Bund's multi-dimensional
transportation hub
Land Cost RMB 2.8bn (RMB 37,098/sq.m.)
Est. Development Cost RMB 1.3bn (RMB 17,224/sq.m.)
Total GFA 130,000 sq.m.
Lettable GFA 75,475 sq.m.
Office 51,615 sq.m.
Retail 23,860 sq.m.
Completion Date May 2015
Design Firm GMP
Location Bund, Shanghai
Transportation Bund's multi-dimensional
transportation hub
Land Cost RMB 4.8bn (RMB 33,198/sq.m.)
Est. Development Cost RMB 1.7bn (RMB 12,000/sq.m.)
Total GFA 426,000 sq.m.
Lettable GFA 145,485 sq.m.*
Office 95,000 sq.m.
Retail 45,796 sq.m.
Culture Center 4,689 sq.m.
Completion Date Dec 2015
Design Firm Foster+Partners
* Attributable to the Company
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Appendix 3 SOHO China Shanghai IP Profile
63
SOHO Tianshan Plaza Gubei Project
Location Hongqiao Foreign Trade Center
Transportation Subway line 2
Land Cost RMB 1.9bn (RMB 17,012/sq.m.)
Est. Development Cost RMB 1.6bn (RMB 14,326/sq.m.)
Total GFA 170,000 sq.m.
Lettable GFA 117,684 sq.m.
Office 72,643 sq.m.
Retail 15,139 sq.m.
Hotel 23,902 sq.m.
Completion Date Nov 2016
Design Firm KPF
Location Hongqiao Foreign Trade Center
Transportation Subway line 2
Land Cost RMB 3.3bn (RMB 31,151/sq.m.)
Est. Development Cost RMB 1.4bn (RMB 13,431/sq.m.)
Total GFA 150,000 sq.m.
Lettable GFA Office & retail 105,476 sq.m.
Completion Date Dec 2018
Design Firm KPF
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Appendix 4 Investment Property Gallery
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