The birth of the Hong Kong Island family

One month later.

Lin Zhichao came to the mainland again. It was still first received by the official high-level officials; then he was awarded an 'honorary doctorate' by Beijing University and delivered a speech - "The Era of Chinese and Asians"; and finally participated in the master's degree authorization ceremony of Foshan University.

After completing these official activities, Lin Zhichao won a number of investment projects at lightning speed, including: joint venture to participate in the renovation and reconstruction of Dong'an Market in Beijing, investment in Shangri-La Hotel, old city renovation project, and participation in the joint venture of Shunde New City 6000 to develop acres of land, buy out the Wanglaoji brand, jointly develop Yantian Port, and establish Shenzhen Changhe Industrial Co., Ltd. (Changshi, Hutchison)

The speed at which Lin Zhichao's companies get projects is extremely fast.

Basically, before others could react, more than twenty major investment projects had been negotiated.

Moreover, its subsidiaries are still looking for investment projects, and it is expected that 1992 will be the year with the largest number of investments in the mainland. The investments are not all in commercial projects with "slow return on capital". There are also many "real estate development projects", but currently they are all joint ventures.

In fact, for many projects, relevant mainland departments and companies found his companies, and even promised to ensure an annual return rate of no less than 10%, such as a major old city renovation project in Beijing.

The projects Lin Zhichao invests in will basically consider some "uncontrollable factors" (related to politics and ancient buildings). He will definitely not invest in any such project.

It was already mid-May when Lin Zhichao returned to Hong Kong, and the economy in Hong Kong was also very promising:

At the end of the first quarter, the main large-scale private housing estates in various districts of Hong Kong and Kowloon were already selling for more than HK$4,000 per square foot (equivalent to 40,010 square meters); however, in the second quarter, the Hong Kong government launched a series of measures to crack down on property speculation, especially The effect of the 70% housing mortgage policy began to take effect, speculation began to subside, transactions began to decrease, and prices began to fall.

However, just as the price of ordinary housing is weakening, the price of large luxury housing has begun to rise sharply. For example, the price of another one-bedroom apartment in Kowloon Tong (a low-density luxury house developed by Wharf) is already close to HK$5,000 per square foot.

At the same time, the office vacancy rate in Hong Kong is only 2%, so the sales prices and rents of office buildings have begun to rise. Taking Exchange Square as an example, the selling price of office buildings per square foot is expected to be more than 15,000 square feet, while the rent is HK$70 to 75 per square foot per month. The stock price of the entire Exchange Square can reach more than 30 billion.

The performance of shopping malls and shops in Hong Kong is also very impressive, with Central, Wan Chai, Causeway Bay, North Point, and Tsim Sha Tsui performing the best. Taking Causeway Bay as an example, since the opening of Times Square and Sogo Department Store one after another, the rents of surrounding shops have increased. The monthly rent for a shop on Russell Street in Causeway Bay has exceeded HK$2,000 per square foot; equivalent to a 1,000-square-foot shop, the monthly rent would be HK$2 million, which is HK$24 million a year. The rent of Times Square has exceeded 900 million Hong Kong dollars per year, and it will definitely exceed the 1 billion Hong Kong dollar rent mark next year.

There is one reason why the rents of shopping malls and shops are so gratifying that cannot be ignored, and that is the rise of Hong Kong culture, which has added fuel to the already prosperous Hong Kong tourism industry; with the rise of Hong Kong groups such as HOT, SES, and Shinhwa, In addition to Asia's opening up and great sensation, there are also Hong Kong dramas such as "Blue Lives Matter" and "Full House" that are watched throughout Asia through satellite TV and export, and have achieved great success.

Why are properties in Hong Kong so valuable?

First, Hong Kong’s geographical location is a link between the West and the East, so many overseas and mainland companies will choose to use Hong Kong as a springboard to enter the Western and Eastern markets.

Second, it is a tourist mecca. It is a paradise for shopping. Because it is a free trade port, the tax rate is extremely low, and some products are actually cheaper than where they are produced. Secondly, the influence of Hong Kong entertainment, Hong Kong comics, and Hong Kong culture. Hong Kong’s cultural industry is now It is more developed than Japan (per capita cultural industry GDP), which has greatly promoted the development of tourism and Hong Kong's economy. Hong Kong has a total population of more than 5 million, but it can receive 22 million tourists every year (1991 statistics).

Third, the local people’s ‘gambler’ mentality. Hong Kong people like to gamble, so real estate speculation is a profession for many people. These people have always been a factor in the rise in housing prices in Hong Kong. Even the properties of Cheung Kong Group have to rely on these agents and real estate speculators.

weekend.

Tang Zhongyuan, Lin Zhichao, and Li Gaofu came to the Discovery Bay Golf Club and sat together to drink tea. Some female relatives were also chatting and partying in the club.

Lin Zhichao returned to Hong Kong in March this year. At a gathering, he suggested that the Tang Zhongyuan family and the Li Gaofu family invest in the mainland. Subsequently, these two families also entered the mainland in a large scale and have made some progress.

"In these years, my son-in-law has never missed a single opportunity. This time, I also appointed Xian Qian to inspect the mainland. There are already investment intentions for four projects in Shanghai and Beijing," Tang Zhongyuan said happily.

In recent years, Oriental Group has been developing very well. Just by acquiring the Harcourt Building and the Royal Building, it has already made huge profits on paper - these two buildings were purchased for 2.38 billion Hong Kong dollars and are now valued at at least 6 billion. or so; the Discovery Bay project has also been a great success. After all, the airport plan was launched five years ago, and Discovery Bay has become a treasure land. The price of ordinary residential buildings is relatively close to that of Tsuen Wan; Oriental Group still has several buildings in Hong Kong and Kowloon. Commercial buildings, as well as some small and medium-sized development real estate projects.

The Tang family has always been among the top ten plutocrats in Hong Kong (Jie Hu Chen Tinghua, Cha Jimin, Liu Nuanxiong, etc.), and this first batch of entries into the mainland will allow the Tang family to continue to be stable.

Oriental Group has moved its clothing OEM business to the mainland. At the same time, it has its own casual clothing brand, Shibaolong, and also represents many foreign brands. It is still the "king of ready-made clothing" in Hong Kong.

Lin Zhichao smiled and said: "Xianqian is the best at this kind of market development, and Oriental Group is expected to reach a higher level!"

Tang Xianqian is his eldest brother-in-law. He made great contributions to the development of Nigeria's textile market and has been responsible for the textile and garment business of Oriental Group. However, in the past ten years, as the textile industry has declined, Tang Xianqian has also participated in the development of Hong Kong.

Brothers Tang Xianqian and Tang Youqian, under the leadership of Tang Zhongyuan, have always lived in harmony and worked together.

Li Gaofu said: "With Uncle Tang in charge, it will be even more foolproof!"

Tang Zhongyuan waved his hand and said modestly: "I'm not in good health now, so I leave everything to them!"

He is 87 years old this year, but he still has not retired. He still goes to the office of Oriental Group Building in Central to sit every day. This is the norm for big families in Hong Kong. For example, the elder Kadoorie still went to the CLP office to sit at the age of 93.

Later, Li Gaofu also discussed the situation of investment in the Mainland. Since he became Lin Zhichao's in-law, he has followed the Lin family in being optimistic about the Mainland, so the 'Fuhe Group' has also developed very well in recent years. Although it cannot be ranked among the top ten chaebols, it can still be regarded as one of the top 20 chaebols.

The more classic investments of Fuhe Group include: a five-star hotel building in East Tsim Sha Tsui in the late 1970s, bargain hunting during Sino-British negotiations, the winning bid for the 'China Hong Kong City' project on the north side of Harbor City in 1985, and the Land acquired the Causeway Bay World Trade Center for HK$1.7 billion.

These projects have made Fuhe Group (a listed company) one of the top 20 real estate companies. Li Gaofu himself is also worth a lot of money.

Of course, Li Gaofu cannot be where he is today without the support of his in-laws, Lin Zhichao. When he returned to Hong Kong in 1968, his assets in Hong Kong were only about HK$30 million (cash and property), but now they are nearly HK$10 billion. Fuhe Group not only engages in real estate, but also engages in trade, shipping, and manufacturing, and its investments are quite extensive.

Li Gaofu's daughter married Lin Ruikai, Lin Zhichao's fourth son, and gave birth to two sons and two daughters. This can be regarded as a great contribution. This is also one of the reasons for the long-term close relationship between the two families.

Finally, Lin Zhichao said: "Changshi Group plans to establish a real estate trust REITs, which will mainly go to the United States to buy commercial real estate at low prices. If you are interested later, you can come and invest."

Cheung Kong Group established a REITs in 1984. At that time, it raised US$300 million and invested it in the Japanese market. As a result, everyone who invested made nearly ten times the profit. There are more than 30 Hong Kong wealthy people and officials participating in the investment.

Today, Cheung Kong Group plans to raise another US$1 billion to establish a REIT to specialize in purchasing commercial real estate in New York and Los Angeles. At the same time, Changshi Group itself will spend more than US$3 billion (about half of the loan) to enter commercial real estate in the United States.

As for the past year or so, it can only be regarded as tentative investment. This year and next year will be the highlight of investment.

Li Gaofu said curiously: "Commercial real estate in the United States has fallen sharply in the past few years, especially in California. Do you think it is another opportunity to buy at the bottom?"

He also has real estate investments in the United States, so he must be familiar with the market!

Including the Tang Zhongyuan family, they also own properties worth nearly HK$1 billion in the United States.

In response to Li Gaofu's question, Lin Zhichao said generously: "In a politically stable country like the United States, economic downturns are the best opportunity to buy the bottom."

Tang Zhongyuan and Li Gaofu nodded one after another. Their overseas investments were considered part of diversified investments.

It is undeniable that the return rate of commercial real estate in the United States is small, normally 6 to 8%; however, if you buy at the bottom when real estate is at a trough, coupled with the effect of leverage, profits will increase significantly.

Just like in his previous life, Buffett bought commercial properties around New York University at the bottom in 1993, and the return rate in 1994 was as high as 35%.

Lin Zhichao also made a classic investment, buying the securities of nine Manhattan office buildings for US$350 million. As a result, six or seven years later, the value had reached US$2.1 billion. Of these nine office buildings, four were sold before 1989, and currently only five remain under the Universal Group.

The Hang Seng Index went from 4,400 points at the beginning of the year to 6,600 points in late May, an increase of 50% in five months. The main reason is that Hong Kong will naturally benefit from the political clarity in the mainland.

Last year (1991), the Hang Seng Index rose from 3100 points to 4400 points, which was much longer than five months this year.

morning.

Lin Zhichao came to the office at the center of the Yangtze River Group and sat drinking tea and reading the newspaper. It was very relaxing.

"Dad, Kowloon Pacific Plaza is ready to attract investment. It is expected that the rent in the first year will reach more than 400 million Hong Kong dollars!" Lin Ruihuan came to the office and reported.

Kowloon Taifu Plaza is the original Miramar Hotel and shopping mall. Now it has been rebuilt as 'Taifu Plaza', with the commercial area increased to 1 million square feet (350,000 square feet of shopping mall and 650,000 square feet of office building); as for the Miramar Hotel, Opposite Campari Road.

The Miramar Hotel has never closed and still has a place in the Hong Kong hotel industry. Moreover, Miramar Hotels has also invested in Nanhai Hotel in the mainland.

Just snatching the Yang Zhiyun family's Miramar Hotel has actually grown into tens of billions of assets.

Lin Zhichao said with satisfaction: "According to this trend, Changshi's profit today this year will be close to 10 billion!"

Lin Ruihuan said with a smile: "Absolutely! Hengfeng Plaza will be open for investment soon. At a time when there is a shortage of office buildings, many financial institutions are inquiring about leasing information."

50% of the equity of Hengfeng Plaza is in the hands of Cheung Kong, and the management rights are also in Cheung Kong.

Lin Zhichao was very happy to think that the profit of Changshi Group this year exceeded 10 billion. This scale should be nearly double that of Changshi in Li Jiacheng's previous life at the same time (in his previous life, Changshi's profit in 1992 was 6 billion).

Of course, the extra billions of profits cannot be the result of "developing real estate (residential)" and "infrastructure". After all, Hong Kong is so big; they can only be the increase in profits from commercial real estate and retail, beverages, food, catering, etc.

In commercial real estate, the original rate of return is not high and cannot be compared with development real estate. However, there are too many commercial real estate properties that cannot stand up to the Cheung Kong Group, and they are located in Hong Kong, Singapore, Japan, the United States, the United Kingdom and other regions.

Lin Zhichao continued: "I also plan to start investing heavily in commercial real estate in the United States. It is expected that it will take one and a half years to complete the bargain hunting of billions of dollars."

Lin Ruihuan said: "Many institutions are moving out of Manhattan. If you want to buy the bottom, next year should be the best time, because some people predict that U.S. commercial real estate will be worse next year."

Lin Zhichao said: "Well, you can start slowly! There is an agency in the United States that specializes in dealing with non-performing assets. If there are suitable ones, we will take them!"

Lin Ruihuan nodded and said, "Okay, we already have a local management team in the United States with rich management experience. The three shopping malls we renovated have also achieved good results."

Under the guidance of his father, the development strategy and direction of Cheung Kong Group will not go wrong. All they need to do is work hard to improve their management and operation levels.

After some communication, Lin Ruihuan left quickly. He is currently the busiest at work. After all, he is managing the Changshi Group.

He is also 43 years old this year, at the peak of his career, and seems to outsiders to have real power.

After all, Lin Zhichao is semi-retired.

There is good news for the two real estate conglomerates owned by Lin Zhichao, Cheung Kong and Wharf. Harbor City, a subsidiary of the Wharf Group, has transformed two high-end residential buildings into two 36-story Gateway commercial buildings, adding 1.15 million square feet of commercial buildings. Three other residential buildings (originally used as high-end residential buildings for rent) have also begun reconstruction. It is expected that an additional 2.7 million square feet of commercial buildings will be completed by the end of 1996.

In other words, in the field of commercial real estate, Cheung Kong Group is the eldest, Wharf Group is the second, followed by Ronaldo and Luoluo. Land lost its Exchange Plaza and suffered a serious loss, Swire Properties lost Pacific Place and was in darkness; The only other Chinese real estate companies that can be ranked high are Sun Hung Kai, Hysan Land, and New World Development. Sun Hung Kai has more shopping malls in New Towns, Hysan Land has more commercial properties in Causeway Bay, and New World Development has more New World Center, Convention and Exhibition Center.

Of course, the commercial real estate of these companies cannot be compared with Wharf and Cheung Kong.

As for Wharf and Cheung Kong Group, who is better in the field of commercial real estate?

Wharf owns: Harbor City, Times Square, Star Shop, etc. in Hong Kong, with approximately 9.5 million square feet of commercial area (including three office buildings under construction);

Cheung Kong Group has: Cheung Kong Plaza (5 million square feet), Exchange Plaza (2 million square feet), Raffles City (200,000 square feet), Cheung Kong Center (1.25 million square feet), Hilton Tsim Sha Tsui East and Tsim Sha Tsui Center (800,000 square feet), Tai Fu Plaza (1 million square feet), Causeway Bay Daimaru Department Store and Xintiandi Shopping Center (500,000 square feet), China Bank Building 50%

In Hong Kong itself, of course Cheung Kong Group is better!

Wharf Group is the real giant in the real estate field in Southeast Asia:

First of all, it controls 52% of the equity of Singapore Land, the largest commercial real estate company in Singapore. After this company was acquired by Wharf Group, it not only strengthened the development of commercial real estate in Singapore, but also entered Thailand, Indonesia, Malaysia and other places, and its assets were rapidly grow.

Secondly, it controls 78% of the shares of Marco Polo Hotels in Singapore. This Singapore-listed company includes three four-star Marco Polo hotels in Singapore, Kuala Lumpur and Bali. It also invests in the Lane Crawford Building on Orchard Road in Singapore.

Finally, the Wharf Group directly owns the Paragon Building and back-end land in Singapore worth more than HK$3 billion, as well as property assets worth more than HK$13 billion in Thailand, Malaysia, Indonesia, the Philippines and other countries.

certainly.

Cheung Kong Group has assets in Japan, the United Kingdom, and the United States that the Wharf Group does not have, and they are worth at least six to seven billion US dollars.

More importantly, Cheung Kong Group is essentially a development real estate developer and a comprehensive enterprise.

Nowadays, Cheung Kong Group is not only entering the mainland, but also looking for bargains in the United States. It can be said to be a two-front battle. Therefore, after this wave, Cheung Kong Group has the strength of the world's top 500 companies (excluding Hutchison Whampoa), and it is still among the top.

It can even be said that the next thirty years will be worry-free!

Of course, Cheung Kong Group will continue to invest as long as it has abundant cash flow. (End of chapter)