Hong Kong 1980: The Savage Era

Chapter 517 Chapter 519 [Economy on the Rise]

"Tell me, what do you want?" Luo Qihong became serious, intending to warn Bai Jinyan not to make excessive demands.

Bai Jinyan said, "There will be a government land auction in a few days. There is a piece of land for luxury residential buildings in Mid-Levels, called 1 May Road. It can be built into a luxury residential building and is worth a fortune."

The land area is 2.2 square feet. Based on the volume ratio, it can be used to build a floor area of ​​about 36 square feet. At its peak in 97, it will be worth billions.

The Zhaoan Group has many villa properties in the Mid-Levels, but only one luxury building. After the privatization of the Federal Real Estate Company, Dehe Real Estate Company only owned two basic projects in the Mid-Levels, both of which are only rented and not sold.

Bai Jinyan's private real estate company owns three luxury homes in the Mid-Levels, which can provide the company with hundreds of millions of rental income every year. Bai Jinyan naturally wants to expand his influence in the Mid-Levels, so his private company owns four luxury residential buildings in the Mid-Levels.

"How much funding is expected?" Luo Qihong still wanted to shut Bai Jinyan's mouth. After all, it was biased.

"I'm afraid it will cost more than ten billion." Bai Jinyan said somewhat guiltily.

"How about this, I'll help you with half, and you raise the other half yourself." Luo Qihong couldn't help but feel a toothache. It was more than ten billion again, and he didn't run a bank, so he didn't specialize in printing money.

"Well, okay. Then I'll let a private company auction it." Bai Jinyan said.

The construction cost of an ordinary house is HK$1300 per square foot. As a luxury residential property in the Mid-Levels, No. 1 May Road must use better materials, and the construction cost is at least HK$2000 per square foot. Add in interest and various taxes, and the cost per square foot will be as high as HK$8000.

The luxury homes in the Mid-Levels have always been touted as being places with excellent feng shui, and have always held the highest luxury home prices in Hong Kong.

Bai Jinyan personally owns these four luxury houses in the Mid-Levels. The asset value of his real estate company can easily exceed 4 billion, making it one of the largest private real estate companies in Hong Kong.

Luo Qihong said, "You can use the Mid-Levels luxury homes as the company's base. This is a good development direction. As Hong Kong develops better and better, the Mid-Levels luxury homes will become increasingly scarce, and the prices will naturally soar."

Luo Qihong predicted that by 96, the price of luxury residential buildings in the Mid-Levels would rise to HK$15000 per square foot, and Bai Jinyan's private company's asset value would increase by at least 50%.

"I think so too, but it's still not as good as the shops in Causeway Bay and Tsim Sha Tsui." Bai Jinyan looked at Luo Qihong and said, with some complaints in his words.

At the beginning, Luo Qihong guided Guan Jiahui to acquire a large number of shops in Causeway Bay and Tsim Sha Tsui. Now Guan Jiahui has made a fortune. The shop rent near Russell Street in Causeway Bay has risen to 140 yuan per square feet. The monthly rent of a 14-square-foot store can reach 170 yuan, and the annual rent is close to million yuan.

This amount of shop rental income is comparable to the rental of a 2.8 square feet office building in Central, which shows the rapid growth of shops.

Luo Qihong smiled and said, "Didn't I remind you too? It's just that you didn't listen. What's the point of saying this now? If you want to continue making money, you can catch up. There are still a lot of shops for sale on Canton Road in Tsim Sha Tsui."

These words left Bai Jinyan speechless. After all, this was the fact. She had wanted to take the "luxury house" route at the beginning and ignored Luo Qihong's reminder.

As we enter July, the weather has become much hotter and the sea breeze is also hot.

This is particularly similar to the atmosphere in Hong Kong's stock market and local markets, and it is beginning to enter a real economic bubble period.

Mainland companies rushed into the Hong Kong stock market like a sea breeze, and were proud of snapping up office buildings in Central, which further stimulated Hong Kong's stock market and local market.

According to statistics of office buildings in Central in the first half of the year, the vacancy rate has been less than 3%, and the general commercial building rent has risen to 60 yuan per square foot, while the office buildings with excellent geographical locations such as Exchange Square have rented 83 yuan per square foot. In order to show their strength, some powerful mainland companies spent a huge price to acquire the twin towers of Admiralty Center, which shocked the entire Hong Kong business community.

Since 89, Hong Kong has experienced a net outflow of population every year, but in the first half of 93, the net inflow of immigrants reached 3.1 people, which greatly alleviated the panic.

In the first half of the year, the first batch of mainland real estate developers such as Yuexiu Property and China Overseas Land & Investment went public in Hong Kong, triggering a subscription frenzy and directly stimulating Hong Kong's local market.

Hengan Investment, Zhaoan Group and others are all large companies. Naturally, they have acquired a large number of mainland real estate company stocks through other means as important investment projects.

Luo Qihong knew that red chip stocks would be the top priority of the Hong Kong stock market this year and could bring huge profits to the company.

与92年上半年相比，93年上半年的股市日均成交额从20亿港元飙升至43亿港元，前两个季度的总成交额是5700亿港元。

At the same time, a large amount of international capital flowed into the Hong Kong market, with US$130 billion flowing in in the first half of the year, which gave a shot in the arm to the Hong Kong market.

Conference room of Zhaoan Group Corporation.

The Hong Kong market continues to perform well, and the company's top executives are all smiling, after all, the company can make more profits.

However, Luo Qihong had other ideas. Red chip stocks in Hong Kong generally have no profit support, and their share prices are driven up entirely by publicity. This is like a gorgeous bubble that will burst with a slightly stronger sea breeze.

"It's a good thing that the market is going up, but we can't be happy too soon. We are very clear about what red chip stocks are. Once this bubble bursts, we must be able to withdraw calmly without suffering heavy losses." Luo Qihong poured a bucket of cold water on the senior executives, sobering them up.

"Boss, you're right. It was the Sino-British negotiations ten years ago that caused Hong Kong's economy to plummet. If it hadn't happened, the economic situation would probably be almost the same as this year, and it would very likely have turned into the dire situation of 87." Cheng Jianshen agreed with Luo Qihong.

Luo Qihong continued, "The pound was attacked by Wall Street because of the formation of a bubble. Even without Soros and his people, the pound would not last long. The bubble in Hong Kong has already formed and is growing rapidly. We must always pay attention and not become the target of other financial groups."

"The group is going to start to gradually reduce its property holdings. It will follow the old rules and start selling off properties that are scattered and not in good locations. For the sake of the group's image, there will be no more repurchases after this round of sales."

"Boss, do you mean that the group will no longer participate in property speculation in Hong Kong?" Kang Wenyi asked quietly.

"Yes! The group will hold large properties in the future and will no longer sell them off, nor will it acquire small properties. It will truly become a real estate company that relies on rent and real estate development." Luo Qihong said.

"The group owns a number of small commercial buildings in Central. Should they be sold to mainland enterprises coming to Hong Kong?" Kang Wenyi thought for a moment and asked.

Most of the small commercial buildings in Central held by the Siu On Group were acquired around 87, when Hong Kong's economy was in a downturn and the prices of commercial buildings in Central hit rock bottom. Today, the prices have increased several times, and combined with the rent over the years, the Siu On Group has made a huge profit.

If property prices are peaking now, then it makes sense to sell commercial buildings in Central.

"No, the entire commercial building is a large property, not a small property, and the Central Commercial Building can withstand every crisis and can serve as the backing asset of the group." Luo Qihong waved his hand and said, "Except for the commercial building, shopping malls, and shops in the core area, the rest can be sold as long as the price is right."

"The group has signed an agreement with the mainland's Shanghai Port. We hold a 40% stake and are responsible for the construction and renovation of the port. It requires HK$20 billion and is expected to pay back in 22 years," Chen Zhilong reported.

(End of this chapter)