SOHO China, the country's leading property developer, said yesterday that the company has entered into agreements for the acquisition of a large-scale development site in one of Beijing's most prosperous business areas.

The company goes ahead with the latest project at a time when most property developers are being extremely cautious about investment amid slowdown in property market and strict loan approval as a result of the government's tightening policy.

The Beijing-based property developer bought a 485,000-sq m site on prime second ring road for 5.5 billion yuan ($792.59 million). It is the second-largest project the company has ever had, managements said at a telephone conference yesterday.

"It is a great opportunity for us, thanks to our financial discipline which gives us strong balance sheet. We were the only bidder for the site, and 5.5 billion yuan is not a small sum for most developers in the country," said Pan Shiyi, chairman of SOHO China.

The site, which has been renamed as Chaoyangmen SOHO, is former Kaiheng Center, one of the largest commercial tracts in downtown Beijing, and is located at the junction of two subway lines, making it highly-accessible, the company said.

Of the total 5.5 billion yuan, about 2.2 billion yuan is "equity consideration" from the company and the rest 3.3 billion yuan is bank loan, Pan told reporters.

About 15 percent of the total project will be designed for residential buildings, with average price of 50,000 yuan per square meter. And 34 percent is allocated for office and 20 percent for shopping malls.

Property price for commercial uses can be as high as 140,000 yuan per square meter, and Pan said he was confident that buyers would nevertheless be attracted to the buildings considering the golden location.

"There is an open secret for successful property developers, which is also our business strategy," Pan said, adding that "the utmost importance for any project is location, location and location."

The project is divided into three phases. The 110,000-sq m first phase will be ready for the market next year, with the rest scheduled to be completed by 2011.

Some 53,000 sq m from the first phase has been sold to Bank of China's Beijing branch. The developer, however, declined to disclose the price.

The project is SOHO China's second largest property development following Jianwai SOHO.

The group still has 10 billion yuan cash in hand after the acquisition and attributes its successful acquisition to financial managements.

"By continuously maintaining our financial discipline, when opportunities like this Chaoyangmen plot arise, we can quickly carry out our growth strategy of procuring precious and ideally-located sites at very favorable terms," said Pan.

(China Daily May 27, 2008)