SOHO China: убытки в 2025 году еще более увеличатся, компания планирует продолжить отчуждение части коммерческих и офисных объектов недвижимости

Cailian Press, April 2 (reporter Li Jie, intern Feng Zixi) SOHO China (00410.HK) recently released its full-year 2025 performance.

Against the backdrop of ongoing adjustments in the leasing market, although SOHO China in 2025 pushed up the occupancy rate through flexible pricing, it still faced operating pressure stemming from falling revenue, high liabilities, and historical tax issues.

According to SOHO China’s 2025 annual report, during the reporting period the company achieved operating revenue of 1.37 billion yuan, down 10.9% year over year; its annual net loss was 291 million yuan, with the loss further widening compared with 2024; after excluding changes in the fair value of investment properties and one-off taxes and fees, the underlying net profit was 134 million yuan; the overall occupancy rate was 82.8%, up 5.1 percentage points year over year.

“One of the reasons for the decline in revenue is that SOHO China proactively adopted a strategy of lowering rents to stabilize the occupancy rate, which led to a decrease in total rental income. Although the overall occupancy rate increased, the downward pressure on rent unit prices dragged revenue.” Yan Yuchun, deputy director of E-house Research Institute, said.

In terms of revenue composition, rental income is still SOHO China’s core pillar of revenue. In 2025, its rental income was about 1.37B yuan, accounting for 99.6% of total revenue, but it declined year over year; property sales revenue was only 5M yuan.

“Under the heavy market pressure in 2025, we proactively adjusted our strategy, using flexible pricing to obtain greater asset liquidity and vitality, so that every square meter can be utilized to the fullest.” Xu Jin, Chairman of SOHO China, said in the performance report.

Publicly available information shows that SOHO China’s main investment properties are still concentrated in Beijing and Shanghai, including eight projects: Wangjing SOHO, Guanghua Road SOHO2, the Qianmen Street project, Lize SOHO, SOHO Rensheng Plaza, The Bund SOHO, SOHO Tianshan Plaza, and Gubei SOHO.

Regarding the reasons for the widening losses of SOHO China, Yan Yuchun believes that the main factors are the compression of gross profit space caused by the decline in rental income, as well as the continuous accumulation of late payment penalties and interest expenses arising from historical tax issues.

In August 2022, a subsidiary of SOHO China, Beijing Wangjing Souhou Real Estate Co., Ltd., received a tax payment notice from the local tax authority, requiring it to pay 1.73B yuan in land value-added tax related to Tower 1 and Tower 2 of Wangjing SOHO by September 1, 2022. The notice stated that from the date of tax late payment, a late payment penalty would be charged at a rate of 0.05% per day.

The financial report shows that by the end of 2025, about 180 million yuan of land value-added tax had been repaid. As of December 31, 2025, the remaining principal of land value-added tax and accumulated late payment penalties totaled about 2.57B yuan, which had not yet been repaid.

SOHO China said that the late payment of value-added tax could result in the principal of bank borrowings and/or cross-defaults.

“These major uncertainties may raise significant doubts about whether the Group can continue to operate its business. In light of the above, when evaluating whether the Group will have sufficient financial resources to continue its operations, the management of the Company has carefully considered the Group’s future working capital and performance, as well as the sources of funds available to it.” The company said.

As of December 31, 2025, SOHO China’s total loans were approximately 15 billion yuan, of which about 99% of the loans were secured by investment properties with a book value of about 53.7 billion yuan; cash and cash equivalents were about 0.5 billion yuan; current liabilities exceeded current assets by about 7.6 billion yuan.

Facing the dual challenges of a downturn in the market and financial pressure, Xu Jin stated in the performance report that, “In 2025, we achieved no layoffs, no pay cuts, we did not owe suppliers money, and we did not delay customers’ project schedules. These are basic operating principles, but it is not easy to achieve them in difficult years.”

SOHO China said that in the future it will take several plans and measures to ease working capital pressure and improve cash flow, including continuing to communicate with local tax authorities and seeking feasible settlement options for unpaid land value-added tax and late payment penalties; continuing to dispose of some commercial properties to repay land value-added tax; and at the same time improving operating cash flow by controlling administrative expenditures and saving on capital expenditures.

Analysts noted that against the backdrop of commercial real estate not yet having exited the adjustment cycle, how to balance the maintenance of asset value and the safety of the debt structure has become an important question for SOHO China’s next stage of direction.