Hillhouse Says It Has No Interest to Take Soho China Private

(Bloomberg) -- Hillhouse Capital Management said it has no interest in taking Soho China Ltd. private. The Chinese property developer’s stock pared gains.

Soho China earlier advanced as much as 41% after Reuters reported that Hillhouse was in talks to take the developer private, citing unidentified people. Its shares traded 7% higher following the emailed statement from Hillhouse. Soho didn’t immediately reply to questions seeking comment.

Soho had been shopping around for a deal for months, saying in August that discussions with potential investors had been terminated and the company hadn’t entered into any formal agreement. Negotiations with Blackstone Group Inc. about a potential investment were derailed after the coronavirus outbreak made it difficult to assess the developer’s business outlook, people familiar said previously.

China’s commercial property space is being pressured by declining rents and decade-high vacancy rates even as the nation’s economy has largely swung back into action after the coronavirus outbreak. Empty space for prime office buildings climbed to 20% in Shanghai in the second quarter, the highest since at least 2008, while Beijing’s 15.5% was the most since 2009, according the data from CBRE Group Inc.

Soho China was founded by Chairman Pan Shiyi and Chief Executive Officer Zhang Xin in 1995. The company holds 1.4 million square meters of prime office space in Beijing and Shanghai, according to its website.

Its key assets include its signature Bund SOHO in Shanghai and the landmark Wangjing SOHO in Beijing, designed by Zaha Hadid, the first woman to receive the prestigious Pritzker Architecture Prize.

Last year, the company started to offload some non-core real estate assets, including individual floors for 13 properties, and parking lots under nine of its buildings.

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With assistance from Bloomberg