SOHO China Ltd, the biggest property developer in Beijing's central business district, will take on more debt this year to fund expansion in the Chinese capital, according to Chairman Pan Shiyi.
"We will greatly increase our debt ratio to finance more projects in Beijing," Pan told reporters on Friday at the Boao Forum for Asia, a conference for business and political leaders on Hainan island. The company has 15 billion yuan (US$2.1 billion) of cash and had a net debt-to- equity ratio of 8.3 percent at the end of last year, "an unreasonably low level," he said.
Soho China is buying land and developments from rivals in Beijing that don't have enough money to finish projects. The firm took over a luxury residential development and a partly built commercial block in the city center in November and plans to add more this year.
Pan said many developers had more than 70 percent of their debt coming due in less than one year and that government curbs on lending are making it harder for real-estate companies to fund their projects. Soho China raised US$1.9 billion in October in an initial public offering in Hong Kong.
The company said earlier that net income jumped almost sixfold to 1.97 billion yuan in 2007 as sales of properties quadrupled to 6.95 billion yuan.