The acquisition of two Wheelock buildings and potentially a large amount of land was carried out by Galaxy Real Estate. In other words, Chen Zhiwen transferred HSBC's low-interest loans to Galaxy Real Estate.
Galaxy Real Estate previously acquired the Saixi Lake land in North Point, Hong Kong Island from the Swire Group. As early as the end of last year, it began to build a large-scale community, North Point Garden. Although it is much smaller than Hutchison Whampoa Garden, it has an area of 600,000 square feet. And on Hong Kong Island, the total value is still very high.
North Point Garden started pre-sales in September this year. With the real estate market already growing rapidly and the original acquisition cost being very low, a one-foot house can earn almost HK$60. The whole community deducts the costs of loans, construction, taxes, labor and other costs. Afterwards, the net profit was HK$100 million.
Although the house has not been built yet, the project has been completed in terms of profit. All that is left is for the construction company to complete the construction of the house and then deliver the community. Professional companies in Hong Kong are responsible for these. Galaxy Real Estate will only continue to do so in the future. Just keep an eye on it and make sure the quality and service are in place.
After the completion of this project, the entire Galaxy Real Estate, except for the headquarters still under construction in Admiralty, will have no other projects. At this time, it is just right to accept these assets from Wheelock. The two buildings can be used to collect rent. To repay HSBC's loan, the land in Kwun Tong and Sha Tin can be used to develop residential communities.
As for Hutchison Whampoa, it already has the large-scale project Huangpu Garden, plus the 800,000 square feet of land in Qingzhou Yingni, which is enough. There is no need for more real estate projects. Once a few super-large developments are completed, they will not be lower than the Yangtze River. Industrial development of dozens of small estates generates revenue.
After receiving the order, Xu Jinhong, general manager of Galaxy Real Estate, immediately began to communicate with Wheelock. Both parties were eager to close the deal as soon as possible. After half a month of discussions, the two parties finally reached an agreement.
Galaxy Real Estate acquired Wheelock's two federal and international buildings for HK$670 million, plus Wheelock's three warehouses in Kowloon and seven sites in Kwun Tong, Kwai Chung and Sha Tin, with a total area of approximately 100 square meters Thousands of feet.
As soon as the news came out, public opinion in Hong Kong was once again detonated. Because this is the first time that a Central building transaction has occurred in the Hong Kong real estate market since the outbreak of the real estate crisis, and it is two buildings at a time. Especially this transaction, and after the merger plan of Jardine Matheson and Wheelock failed, it is difficult not to let the transaction go. People imagine that these two things are so close together. Could it really be a coincidence?
Hong Le Building:
Newbijian frowned while looking at an English newspaper in his hand, which detailed Chen Zhiwen's acquisition of several Wheelock properties. Bao Fuda on the side did the same thing.
"What do you think of this?" Newbijian asked.
Bao Fuda said: "Chen Zhiwen's funds should come from HSBC, otherwise, he would not be able to suddenly have so much funds to acquire so many properties in Wheelock."
"Why do you know that? Several of Chen Zhiwen's businesses are very profitable overseas." Niubijian put down the newspaper and asked.
"If he really has so much money and is so optimistic about the real estate market, then there is no need to cooperate with Chinese real estate for so many projects of Hutchison Whampoa. Moreover, haven't you noticed, Hutchison Whampoa's Parknshop supermarket is in Huide? After Feng sought self-sale, he suddenly began to acquire properties on a large scale and began to directly engage in price wars with us. Although we had predicted this step, the timing was wrong and it suddenly became so aggressive. It must have been because of the acquisition of sufficient funds. "Bao Fuda analyzed.
"Shen Bi is the troublemaker. Wheelock refuses to hand over the core data. It's his fault." Niubijian said angrily.
The acquisition of Wheelock is definitely one of the most dazzling achievements in the business history of Jardine Matheson, which is enough to make Jardine Matheson the biggest behemoth in Hong Kong, but the premise is that Wheelock’s business is normal. In this case, even if Jardine Matheson The current financial situation is not very good, but Wheelock is also a normal company. It does not need additional capital injection and has profitability itself. Especially after merging some businesses with Jardine, it can also reduce expenses, or supplement Jardine's many advantages. deficiencies in areas such as shipping.
However, after HSBC intervened through Duoli, John Stool refused to hand over the financial data. In this case, how could Newbill dare to take action? Even if Wheelock had no problem, HSBC or Duoli's shrewdness would leave a secret in it. It's easy to trap Yihe. If it were to incur hundreds of millions or even more debts for no reason, it would trap Yihe to death.
In mergers and acquisitions in the history of world business, this kind of situation is rare, but it is not unheard of. The acquired company conceals a large amount of data. As a result, when the acquirer finds out, it becomes violent and it screws itself up.
"Shen Bi, an old fox, not only blocked our acquisition of Wheelock, but also put Chen Zhiwen on the opposite side of us. Now he is focused on expanding PARKnSHOP supermarkets. If we don't invest hundreds of millions in it, we won't be able to stop him at all. But once it is invested, let alone the impact on other businesses of Jardine Matheson or Land, I am afraid that in the future, we will always have an endless relationship with Chen Zhiwen's company." Bao Fuda said with a frown.
Once Jardine and Huang enter the supermarket field as hard as Hutchison, the money will inevitably be burned by both parties. Chen Zhiwen's funds will also be burned a lot, which will naturally cause certain conflicts. At the same time, both parties have opened a large number of supermarkets, and many If they are still very close, then the price war will inevitably break out, because if it doesn't break out, both companies may die.
"Forget it, let's give up." After thinking for a moment, Newbijian said: "Chen Zhiwen has opened up overseas retail trade very early, and has also cultivated a complete supply chain through orders from overseas supermarkets. In this regard, we There is no advantage. Even if the procurement cost is only 1 percentage point difference, over time, we will not be able to beat Parknshop. This is an absolute gap that cannot be changed even if we spend a lot of money. Besides, we can also spend a lot of money like Hutchison Huang."
In terms of capital, although Jardine is strong, it involves too many businesses. Chen Zhiwen's company only focuses on a few directions, and it seems that every business is developing well. I have never heard of any loss. In this case , there is no point in competing for capital, it will only hurt both sides, and may miss many other opportunities.
"It's a pity. We have invested more than hundreds of millions of Hong Kong dollars in Wellcome. If we give up like this, we will lose at least half of it." Bao Fuda said with some regret.
The supermarket business is not a real estate investment. Once you give up, all the things you have done before and all the money you have spent will be wasted. Only those properties that were acquired to open supermarkets can possibly keep their capital back.
"In this way, you can discuss with Chen Zhiwen and we can transfer Wellcome Supermarket to him. The price will be a discount. Don't expect to recover the entire cost. Everyone will accept it. This can be regarded as an expression of goodwill. , there is no need for us to continue to be at odds with him." Niubijian thought for a while and said. It is also normal to sell your business in Hong Kong if it fails.
"Okay, that's all. It's good to be able to recycle a little bit." Bao Fuda nodded and said.
Mandarin Oriental Hotel:
As the most luxurious hotel under Jardine Matheson, this is the first choice place for Jardine Matheson Group to entertain distinguished guests.
"Sheng Chen, what do you think of the Mandarin Oriental Hotel?" Bao Fuda asked with a smile after taking Chen Zhiwen around some of the more luxurious places in the Mandarin Oriental Hotel.
"Not bad. If Land is interested in selling, I can take over." Chen Zhiwen joked.
"Chen Sheng is joking, you have just acquired two buildings, the Federal Building and the International Building. Aren't you satisfied?" Bao Fuda said calmly.
"Compared with Land, these buildings I own are far behind." Chen Zhiwen said with a chuckle.
Regarding the positioning of Galaxy Real Estate, we really refer to Land. In the future, Galaxy Real Estate will also focus on holding large properties to collect rents.
It feels so good to just lie down and collect money, and as long as the property is purchased early, the value of the property can increase more than ten times in a dozen years, and the rent at that time can also increase by more than ten times.
However, if you want to achieve this step, you need a lot of capital. Therefore, you also need to learn from Chinese real estate companies, develop a large number of properties for sale, and quickly withdraw funds to grow yourself. When the scale is large enough, you will no longer be able to make exponential profits. At this time, you should learn to hoard high-quality properties like Land.
In later generations, Chinese real estate companies in the 1990s have also reached this point, as have the four major Chinese families in Hong Kong. Relatively speaking, Li Jiacheng is more inclined to internationalization.
"Chen Sheng's ambition is really not small." Bao Fuda said with a smile. He does not think that Chen Zhiwen can achieve the level of Landmark, because it is almost impossible. Landmark has already controlled a large number of properties in Central, Admiralty, and Tsim Sha Tsui. It is the result of Landmark's nearly 100 years of hard work. What do other people dream about?
However, the two buildings, Federal Building and International Building, are also properties that Bao Fuda covets. Who would dislike office buildings in Central?
"Bao Fuda, you invited me here, didn't you want to show off this hotel in front of me?" Chen Zhiwen said again.
"Of course not." Bao Fuda personally poured a cup of tea for Chen Zhiwen and said, "Sheng Chen, in recent months, Wellcome Supermarket, a subsidiary of China Land, and PARKnSHOP, a subsidiary of Hutchison Whampoa, have launched some unpleasant competitions in many places. Our board of directors discussed it and felt that it is not an option to continue like this. There are too many opportunities to make money in Hong Kong. It is not good for both parties if we do this. So I now suggest that we combine Wellcome and Parknshop. If the supermarket merges, we will split it 50-50 and manage the new company together. If you and I join forces, I believe we will soon be able to monopolize the entire Hong Kong market."
"Merge? 50-50 split, Mr. Bao Fuda, are you kidding?" Chen Zhiwen said lightly.
"We can discuss the share ratio, and the same goes for the investment of funds." Bao Fuda continued. Although I came here to prepare to sell Wellcome, I absolutely couldn't say it directly at this time. Once I said it, I was immediately at a disadvantage.
It would be better to start by talking about a merger. If the other party agrees, it will be a huge profit, although the possibility is almost zero. If not, then the acquisition can be discussed. In this way, both parties will have an equal platform.
"A merger is impossible." Chen Zhiwen shook his head and said.
Bao Fuda continued to smile lightly and said: "Sheng Chen, in Hong Kong, joint ventures are normal. For example, we at Jardine Matheson have many cooperation projects with Swire and Hong Kong Electric."
"Of course there is no problem with ordinary projects, but retail is one of the most important businesses of Huang Qi and I. We will not accept other capital investments for the time being. If you want to merge, forget it. Just like I said, if I want to invest in Kangle Building , would you agree?" Chen Zhiwen said with a smile after taking a sip of tea.
"Of course Kang Le Building can't do it, but it doesn't affect anything. But if our two supermarkets continue to compete like this, they will have to burn money. In the end, we will both lose. Even if we win, it will not be of any benefit to you and me. " Bao Fuda said.
"I don't care." Chen Zhiwen said with a shrug. In fact, price war is not without its disadvantages. A price war between two giants is enough to bloodbath other peers. This is a phenomenon that occurs in any industry. Besides, even without Wellcome, If PARKnSHOP wants to truly unify Hong Kong's retail supermarket industry, it must also defeat supermarkets established by capital from other parties at low prices.
Hong Kong’s retail in the future will inevitably be a comprehensive model consisting of medium-sized retail supermarkets and various mom-and-pop shops. The former will mainly provide cheap goods, and the latter will supplement it to solve the convenience problem of daily life. Moreover, the influence of the two is not It’s very big. What PARKnSHOP needs to do is to form a monopoly in medium-sized retail supermarkets.
"In that case, Mr. Chen, how about you acquire Wellcome Supermarket?" Bao Fuda finally said it. Although he was very reluctant to give up, Newbijian was right. Now Yihe has its own differences. It is very difficult to spend hundreds of millions to compete with Chen Zhiwen, who is gaining momentum in the supermarket market. It is completely a waste of money. These hundreds of millions can be used to buy land or develop one's own properties. With the current wind of the real estate market, it can be doubled. .
Of course, I can only comfort myself in this way. In the long run, it is of course more cost-effective to acquire a super large supermarket chain. This is a huge industry, a company that provides employment to thousands of people and has a huge capital chain. As long as it operates Well, if part of the supermarket's funds are used for investment, the efficiency will be higher, but there is nothing you can do if you don't comfort yourself. Jardine may not be able to compete with Chen Zhiwen in terms of capital, but it is even worse in terms of retail cost control. In the past month, PARKnSHOP Supermarket A price war has been launched, and many Wellcome branches have been losing money just after they opened. In the long run, Land cannot bear it.
"Okay, but I don't want the place that overlaps with my Parknshop supermarket." Chen Zhiwen nodded and said, having already guessed that today would be the purpose, otherwise, Bao Fuda would have no reason to ask him out.
"Okay, we'll discuss the price after we confirm it." Bao Fuda thought for a while and agreed.
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(End of chapter)
