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SOHO China Announces 2021 Interim Results

Rental Income of Approximately RMB805 million Achieved,

Average Occupancy of Stabilized Investment Properties Recovers to 90%

  • Achieved rental income of approximately RMB805 million, up 3% over approximately RMB782 million in 2020.
  • Average occupancy of stabilizedinvestment properties recovered to approximately 90% with China’s effective control of the pandemic and economic recovery. Leeza SOHO’s occupancy reached approximately 74%.
  • Net income attributable to shareholders reachedapproximately RMB340 million, up 67% over approximately RMB204 million over 2020.
  • Net gearing ratio of approximately 43%, with averagefunding cost of approximately 4.7%.

(August 19, 2021, Hong Kong) SOHO China Limited (hereinafter referred to as "SOHO China" or "Company", Stock code: 410.HK) announced today the Company's unaudited 2021 interim results for the period of January 1 2021 to June 30 2021 (hereinafter referred to as the “Period”).

In the first half of 2021, as the pandemic in China was effectively controlled and the domestic economy continued to recover, office leasing markets in Beijing and Shanghai picked up substantially. According to Cushman & Wakefield market reports, in the first half of 2021, the net absorption of Grade A office buildings recovered to 336,000 square meters in Beijing and 760,000 square meters in Shanghai. Net absorption in both Beijing and Shanghai in the Period was significantly higher than the same period in 2019 and 2020. However, pressure from a large amount of new office supply led vacancy rates in the Beijing and Shanghai office markets to remain high. It is estimated that by 2025 there will be more than 3 million square meters of new office supply in Beijing, and about 5 million square meters of new office in Shanghai, with increased supply bringing new challenges to both markets.

With its strong operational capabilities, and benefitting from the prime location of its properties, SOHO China's leasing business has recovered quickly from the impact of the pandemic. During the Period, rental income reached approximately RMB805 million with a year-on-year increase of approximately 3%. As at June 30 2021, the average occupancy rate of the Company's stabilized investment properties had recovered to 90% from 78% at the end of June last year. Driven by anchor tenants, Leeza SOHO's occupancy rate rose to 74%, reaching a leading level among similar office buildings in the Lize Financial Business District.

Focused on sustainability, the Company continues to incorporate the values of social responsibility, environmental protection, and product liability into corporate governance and daily business activities. In July this year, a sudden and rare torrential storm flooded China’s Henan province. SOHO China responded quickly to this natural disaster and donated RMB10 million to the Red Cross Society of China’s Zhengzhou branch to support the procurement of disaster relief materials and post-disaster reconstruction in Henan. Recently, four SOHO China projects, Galaxy SOHO, Guanghualu SOHO II, Wangjing SOHO T3, and SOHO Tianshan Plaza have all obtained the "Two-star Green Building Label Certificate" issued by the Beijing Municipal Commission of Housing and Urban-Rural Development and the Shanghai Green Building Association.

In April this year, Commune by the Great Wall re-opened under the management of Hyatt Hotels Corporation. This is the second collaboration between SOHO China and Hyatt, the first collaboration being Hyatt Place at SOHO Tianshan Plaza. The unique architectural design of Commune by the Great Wall, coupled with Hyatt’s exceptional and globally recognized operating capabilities, will provide guests with an extraordinary holiday experience.

Over the course of the pandemic, SOHO China’s high-quality portfolio, located in prime locations of Beijing and Shanghai, has demonstrated its resilience to risk and unique ability protect and maintain value. Going forward, SOHO China will continue to serve more tenants and create more social value by offering high-quality operations and platform-based property management.