• As affected by the increasingly challenging commercial property leasing markets under soft economic sentiment, revenue income was approximately RMB799 million for the Period.

• Gross profit margin from property leasing remained stable at approximately 82% for the Period.

• The Group’s average occupancy rate  stabilized at approximately 76% as at 30 June 2024.

• Underlying profit attributable to owners of the Company from operating activities (excluding valuation changes on investment properties and one-off tax fees) was approximately RMB104 million for the Period. Loss attributable to owners of the Company was approximately RMB108 million for the Period.

• Net gearing ratio of the Group was approximately 41% and average funding cost was approximately 4.5% as at 30 June 2024.

SOHO China Limited (hereinafter referred to as "SOHO China" or "Company", Stock code: 410.HK) announced today the Company's 2024 interim results.

In the first half of 2024, China’s economy demonstrated a resilient recovery in the wake of a complex external environment. Driven by a series of macro-policies designed to stimulate domestic demand and invigorate the consumer market, domestic economic development has stabilized, demand continues to recover, and the quality of economic development continues to improve. The real estate policy environment continues to be relaxed with a focus on stabilizing the market and destocking with the objective of easing overall pressure on the industry and accelerating the development of a new model for real estate industry.

Looking back at the office and commercial property leasing market in the first half of this year, in terms of supply, new supply has been slowed down, and the scale of supply and demand for commercial office has reached a low point compared to recent years. While, at the demand side, weak market demand has become the main factor holding back market recovery, with leasing demand mainly focused on relocation and lease renewal. The rental rates being a downward trajectory, although retail rental rates have slightly recovered, the increase is narrow. As such, the overall strategy is “price for volume” so as to keep market activity going.

Looking forward to the market in the second half of this year, the Cushman and Wakefield data analysis predicts Beijing and Shanghai Grade A office markets will see new supply of approximately 425,000 square meters and 709,000 square meters, respectively. With low market demand and a large amount of new supply entering the market, vacancy rates are going to rise and placing continuous pressure on the leasing market.

Facing market uncertainty and the numerous aforementioned challenges, SOHO China adheres its management on the principle of prudent operations that boosting cost control and risk management, embracing change with an open mind, responding to challenges with an innovative spirit, and continuing to fortify the brand by offering high-quality services.

In the first half of the year, SOHO China continued to deepen its collaborative relationship with customers by focusing on customer needs, accurately grasping market developments and working with clients to create business strategies and service plans that to meet emerging trends, and widely promoting the ability to deliver customized renovation services. SOHO China’s Grade A properties are all located in the core bustling business districts of Beijing and Shanghai. In addition to the advantage of prime location, the Company’s “worry-free move-in” model solves customer pain points and challenges.

The combination of professional management and top-level service provided by our property management team allows for a safe and comfortable office and living experience at each and every SOHO China projects. Quality service is the bridge connecting customer trust and brand value, laying a solid foundation to stabilize the Company’s occupancy rate and operating cash flow.

This year, we responded to the requirements and calls of administrative authorities, took production safety as top priority of the Company’s daily management, and strictly adhered to the bottom line of safety. In the past six months, SOHO China has established a safety management committee, improved the Company’s safety management system, organized fire drills, strengthened on-site inspections and emergency response, and has improved the emergency response capabilities of each employee through education, training and examinations, and contributing to the protection of public safety.

At the same time, SOHO China continues to promote the three aspects of environmental, social and governance (“ESG”) and is committed to building a sustainable enterprise. In terms of environmental, the total energy consumption of the Group’s 24 property projects under management saved 37.14 million kWh compared with the national standard, with an energy saving rate of 20%, and a carbon emission reduction of 31,000 tonnes. In terms of social, the Company continues to build a sustainable development ecosystem with value driving as the core, and establish long-term and mutually beneficial partnerships with customers, suppliers, and surrounding communities. Meanwhile, in terms of corporate governance, the Company has continuously improved management its sustainable development management by optimizing ESG governance structure and various rules and regulations.

In March 2024, SOHO China released its first 2023 Climate Action Report, taking a key step towards green and low-carbon transformation. In June 2024, the scientific carbon target submitted by SOHO China was officially approved by the Science-Based Targets Initiative (SBTi), which is consistent with the Paris Agreement’s global emission reduction target of 1.5。C temperature rise control, helping the global transition to “net zero” .

Looking forward to the second half of 2024, as macroeconomic policies continue to increase domestic demand and promote consumption, China’s economy is expected to enter a more stable recovery track. In particular, the continuous optimization of the business environment of the service industry may take the lead in driving recovery of the commercial real estate market, especially in large cities and promoting the transformation of the commercial real estate industry to a higher quality and more sustainable development models.