SOHO Properties Fined RMB 115 Million For Overcharging Tenants For Electricity

On Mar 21, 15 properties affiliated with real estate developer SOHO China were fined RMB 115 million for charging extra electricity bills, according to the Beijing Market Supervision Administration.

Sanlitun SOHO garnered the biggest fine of the bunch, RMB 21.58 million in total, for having illegally collected RMB 14.38 million from 1182 tenants for "electric power renovation service fees".

Chaoyangmen SOHO came in second, with RMB 15.61 million fines in total. While the lowest fine doled out was to Beijing SOHO Residences, at RMB 293,700.

This wasn't the first time fines have been levied against SOHO China. In early December last year, seven properties owned by the deveoper were fined about RMB 85.64 million for overcharging for electricity.

The struggle is real

The struggle is real for Soho properties. Their revenue fell by more than 20 percent despite rising rental income in 2021. 

SOHO China's main businesses is based on real estate development, property leasing and property management. According to the company's 2021 annual performance report, which was released on Mar 24, the largest source of income for SOHO China comes from renting and sales of property units.

SOHO China currently invests in nine major property projects, including Wangjing SOHO, Galaxy SOHO and Guanghualu SOHO. In 2021, the developer received its highest rental income from Wangjing SOHO, coming in at RMB 297 million.

When it comes to occupancy rate, of all the SOHO properties in Beijing, Guanghualu SOHO has the highest occupancy rate, at 85 percent.

Soho properties for sale

In 2021, SOHO China’s rental income stood at RMB 1.742 billion, a 13 percent increase from 2020. Despite the increase of profits in rents, though, Soho suffered from a net loss of RMB 131 million in 2021. This is largely due to the penalty SOHO received for tax evasion that year, which cost them RMB 439 million.

In light of this, on Mar 10, SOHO China announced that Pan Shiyi, the company's CEO, would sell 32,000 square meters of units from a number of their properties in Beijing and Shanghai at a 30 percent discount, with all income to be used to pay off debts.

We found some of these properties that are selling units on a real estate platform on WeChat. The list includes Galaxy SOHO, Danling SOHO, Chaowai SOHO, and Sanlitun SOHO. Among them, Galaxy SOHO has 15 apartments for sale, with a listing price of RMB 48,000 per square meter. The total listed price of an apartment for sale stands at RMB 1.3 billion.

Although SOHO advertised the sale as an opportunity to pick up the slack, the prices are still higher than many other projects currently on the market.

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Images: Irene Li, Dianping