Wednesday August 19, 07:30 AM
SOHO China buys Morgan Stanley arm for 359mln dlrs
SHANGHAI (AFP) - Property developer SOHO China (0410.HK - news) said it has agreed to buy a top Shanghai office building from US investment bank Morgan Stanley (NYSE: MS - news) for around 2.45 billion yuan (358.7 million dollars).
The 52-storey office and retail complex, Dong Hai Plaza, is located in downtown Shanghai's Nanjing Road, one of the world's busiest shopping streets, SOHO China said in a statement late Tuesday.
The deal came as office vacancy in China's financial hub hovers at record high levels as cost-conscious companies remain reluctant to rent more space due to ongoing global economic uncertainty.
The prime office markets in Shanghai, Beijing and many other Chinese cities continued to see rents plummeting on the back of weak demand in the second quarter, according to property brokerage CB Richard Ellis (NYSE: CBG - news) .
SOHO China, which previously focused on real estate projects in Beijing, said however it was confident that the purchase, financed by bank loans, would help it penetrate the already-crowded Shanghai market.
"Our business model of selling commercial properties in the most prosperous city centre areas ... has already proved successful in Beijing," chairman Pan Shiyi said in a statement.
"We are confident the model will succeed in Shanghai as well."
The company said it would rechristen the building, which is about 30 percent rented, SOHO Exchange. It plans to lease or sell the remaining office space.
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