SOHO China: Transformation in Progress

Case Solution

Charles F Wu
Harvard Business School ()

In 2016, SOHO China, the largest ClassA real estate owner and developer in Beijing and Shanghai, struggled to convince analysts of the new “Buildtohold” strategy in a challenging Chinese macroeconomic environment. The company was founded as a commercial builder and went public in 2007 for a record value of $ 1.9 billion, but the company, led by Zhang Xin, focused on a “build to keep” strategy in 2012 to deliver value to long term and insuring your real estate. Ms. Zhang also saw an opportunity to capitalize on the fast-growing trend of the “shared office” and develop her own “3T” coworking product that locates these centers in her newly constructed buildings. Despite 3Q’s initial success and its “build to hold” strategy, which is beginning to pay off, SOHO’s share price was still near record lows. How could Zhang Xin get the stock market to reward SOHO’s share price and acknowledge the successful transition? Would these strategic decisions be enough to guide SOHO China over new economic hurdles? Is 3Q enough to bolster SOHO’s performance and move into the next phase of growth?

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