SOHO China Ltd, a major commercial real estate developer in China, will shift its strategy from the "build and sell" model to "build and hold" as it expects a promising growth in rent and capital value of prime office buildings in Beijing and Shanghai.

The Beijing-based developer intends to hold prime office and retail spaces totaling 1.5 million square meters - 1.12 million square meters in Shanghai and 380,000 square meters in Beijing - and expects annual rental income from existing portfolios to exceed 4 billion yuan (US$630 million) in five years, SOHO China said in a statement yesterday.

"Beijing and Shanghai's position as a national and international business center, coupled with very limited supply of offices in prime locations in the two cities, will further boost the growth of rental and value of office buildings," said Pan Shiyi, chairman of SOHO China.

"We hope rental income will become a major source of our profit in three years while sales will become supplementary," he said.

Beijing posted a 73 percent jump in office rents while Shanghai's rose 18 percent over the past 18 months, the statement said, citing research released by international real estate services provider CB Richard Ellis.

SOHO China also unveiled its unaudited interim results yesterday.

For the six months ended 30 June, turnover dived 54 percent to 1.22 billion yuan, as no new projects were completed for booking during the period, it said.

The net profit attributable to equity shareholders plunged 65 percent annually to 613 million yuan.