Caojiadu Land Project encompasses an area of approximately 14,832 m² and is for commercial, residential and office use. Its total planned gross floor area is approximately 81,000 m², including 51,136 m² above ground gross floor area (of which approximately 13,946 m² is for residential use and 37,190 m² is for commercial and office use). The planned underground gross floor area is approximately 30,000 m², including 6,000 m² commercial area and auxiliary car parks.

 

Acquisition of the Caojiadu Land is in line with SOHO China’s strategy of developing high-end commercial properties situated in central locations of Beijing and Shanghai that offer easy accessibility. The Project is situated next to Chang Shou Lu commercial street in the Caojiadu commercial area, JingAn District, Shanghai. Surrounded by subway lines 2, 3, 7 and 11, Caojiadu commercial area is another vibrant location in JingAn District – aside from Nan Jing Road West – for offices, retail and high-end apartments and is one of the key commercial districts in Shanghai. Subway lines 13 and 14 will soon be constructed in the area as well.

 

Caojiadu commercial area is situated at the intersection of JingAn District, ChangNing District and PuTuo District. It has daily pedestrian traffic of over 1.2 million, and attracts various commercial activities, making it the largest integrated commercial district in northwestern Shanghai, and a location that possesses a bright future. The Project acquired by SOHO China is strategically located at the middle of Wanhang Du Road, which is at the center of the Caojiadu commercial area.

 

This is the fifth acquisition made by SOHO China since its first entry into Shanghai, marked by the acquisition of the Exchange SOHO in August 2009. This acquisition also complied with its core strategy of acquiring projects located along transportation networks in central locations. In one and a half years, SOHO China proposed and made five acquisitions, establishing its presence in five highly vibrant and easily accessible commercial districts of Shanghai, specifically, Nan Jing Road West, the Bund, Hongqiao transportation hub, Huai Hai Road Central and Chang Shou Lu. The acquisitions highlight SOHO China’s strategy and determination to fully develop the Shanghai market – a market that SOHO China thinks very highly of. Mr. Pan Shiyi, Chairman of SOHO China, said, “Shanghai is the economic hub of the Yangtze River Delta. It is surrounded by major cities, possessing capital and human resources. Entering the Shanghai market can therefore be likened to establishing a solid foothold in China’s property market.”

 

Following the implementation of austerity measures almost a year ago, the public now hold differing views about the property market as a wait-and-see attitude is evident with anxiety emerging. On 26 January 2011, the State Council announced eight new tightening measures while expanding the home purchase restriction (HPR) policy. Most of the local governments targeted to announce the housing price control measures by the end of March, making it difficult to forecast market trends. The residential property prices in Beijing and Shanghai are approaching tipping point and is likely to slump. Nonetheless, commercial properties are not affected by these measures and thus become the focus of investment. Confident in the overall economic development of China, as well as the prospects of the most bustling commercial property market in Shanghai, the most prosperous city in mainland China, SOHO China has maintained a steady course of investment in Shanghai. This acquisition demonstrated the Company’s accelerating progress towards its acquisition target of RMB15 billion this year. Completion of the acquisition will take SOHO China a step closer to realizing its goal of maintaining an equal proportion of investments in Shanghai and Beijing.