Chapter 283 Terrified
In early June, Octopus Financial Group announced that 'China Merchants Bank (Hong Kong)' and 'Far Eastern Bank' would merge and be renamed 'Octopus Bank'.

Liu Zhiben thought there would be some minor setbacks, and even contacted several banks to "promise a loan of 30 billion" in preparation for possible events.

In fact, he was worrying too much!

The entire merger process went smoothly, and citizens gave positive comments on the new name "Octopus Bank".

Octopus Bank.

Liu Zhicheng listened to He Changhong's work report. In the past year, he has been systematically learning how to work in a bank. He doesn't need to know too much, but he needs to avoid being "cheated" by his subordinates.

"Boss, before the merger, the number of branches of the two banks had been reduced to 65. After the merger, we plan to reduce the number of branches by 5."

Liu Zhicheng said with satisfaction: "Well, 60 branches are more suitable for our scale. Even if we reduce 12 branches, it will not affect the operation, right?"

He Changhong said: "It will not have any impact. The two banks have a lot of overlap, so it is necessary to reduce the number of branches. Moreover, our branch is still the second largest among local banks in Hong Kong, second only to Bank of East Asia."

Although HSBC and Hang Seng are both large banks, they do not have a very large number of branches, but others may be slightly larger in scale.

After thinking for a while, Liu Zhicheng said, “In the second half of the year, you should investigate the Southeast Asian market and then seek to open a branch.

As for the mainland, we also need to strive for opportunities, and I will come forward when the time comes."

He Changhong said: "Okay, Southeast Asia is not a big problem!"

Liu Zhicheng did not have big ambitions for the bank, but he had to open bank branches in Europe, America, Southeast Asia and the mainland, which would be in line with the "Octopus" brand.

To open a bank abroad, as long as you have no problems with the operation, it can be done without too many factors.

As for the mainland, you need to rely on connections, and the scrutiny in all aspects is very strict.

Liu Zhicheng basically handed over all banking matters to a professional team. After the subsequent bank merger is completed, Liu Zhicheng will consider entering the securities, insurance and financial products fields.

.........

new York.

Richman brought Liu Zhicheng and his party to 245 Park Avenue.

Liu Zhicheng had an impression of this building. In his previous life, HNA acquired it for US$2017 billion in 22. It single-handedly pulled New York real estate back from the trough.

However, HNA later went bankrupt and the building was listed for sale at US$18 billion but was not sold.

“Mr. Liu, this building was built in 1967. It is 48 stories high and has a floor area of ​​143 million square feet.

It was renovated in the mid-80s, and the current occupancy rate is 79%. "Richman introduced it with some pride, but soon his expression became depressed again.

Liu Zhicheng observed the building and Richman, and had a clear idea in his mind.

Anyway, he was acquiring the office building in Manhattan with the mentality of getting a bargain, and he would definitely not buy it if it was too expensive.

As everyone walked into the building, Liu Zhicheng asked, "What is the average unit rental price?"

He must have an idea in his mind, but after all, the rent of each building is different.

Richman would not lie to Liu Zhicheng because it would not benefit him.

He thought about it for a long time yesterday and felt that his greatest hope might be to complete London's 'Canary Wharf' and make a profit from it.

Of course, he can be said to be bankrupt now, and naturally cannot redeem such a large project, so a large amount of venture capital is needed.

Liu Zhicheng is undoubtedly the best venture capitalist. He is a business leader in Hong Kong and the richest Chinese himself.

“It’s currently $30 per square foot per year!”

Liu Zhicheng calculated that the total cost was US$2.5 per square foot per month (about HK$20 per square foot), which was less than the lowest office price in Kowloon, Hong Kong.

Hong Kong's office buildings are currently the tallest in the world, surpassing Tokyo and Manhattan, with an average price ranging from HK$30 to HK$60 per square foot per month.

The monthly office price in Central has reached HK$60 per square foot, and will soar to over HK$90 in the next two years. The highest will probably be HK$110 per square foot in Exchange Square.

As for Manhattan, even before the Internet bubble crisis, the estimated rent was only HK$45 per square foot (US$60 per square foot per year), far less than Hong Kong.

The important thing is that the taxation of office buildings in New York is higher than that of Xiangjiang, and these buildings are old buildings, and maintenance and upgrading may be expensive.

The rate of return will not be too high. Even if you buy at the bottom, the price will still be discounted.

However, buying a building in Manhattan is a sign of strength;

At the same time, it is also a disguised form of paying "protection fees". After all, both the Whampoa Group and Liu Zhicheng personally have invested large amounts of US stocks.

In order to avoid making others jealous, you have to come to the United States to buy buildings at bottom prices to balance the high rate of return.

After all, the rate of return on securities is too high, so one still has to invest in some assets with medium returns (10% to 15% return after deducting bank interest).

The group took the elevator and experienced the building. Overall, it is indeed a relatively new building.

However, Liu Zhicheng knew that some of the other buildings in Olympia might have been built in the 1940s and 1950s.

In 1902, New York built a 22-story Flatiron Building, which was the tallest building at the time.

Therefore, in the past, the Internet used buildings such as the Empire State Building (1931) to highlight Li Hongzhang's despair, which was purely a way for self-media to attract traffic.

After visiting 245 Park Avenue in Manhattan, Liu Zhicheng asked Richman, "What is the current market price of a building like this?"

Richman thought for a moment, then said, "The market value is estimated to be 3 million US dollars, but no one will buy it!"

He didn't want to lie because this young man was so smart and the group of elite consultants following him looked very professional.

Liu Zhicheng nodded. This kind of building is a test of the compatibility between buyers and sellers because there is no standard.

According to Hong Kong's calculations, the unit price is generally 100 times the rent, that is, the selling price is US$250 per square foot, so this building would cost 3.5 million.

However, the building's vacancy rate is so high and its annual maintenance costs and taxes are so high that it is far from possible to calculate in this way.

If Liu Zhicheng offered a price, it would be 250 times the 80% rental rate, and then a 140% discount, which would be US dollars per unit.
Based on the 143 million square feet of rentable area, US$2 million would be a more appropriate amount.

Before 1995, this price had not increased much.

The annual net rental profit may not be able to keep up with the high inflation, and the rate of return may be only 5% to 8%.

After inspecting 245 Park Avenue in Manhattan, Liu Zhicheng and Richman went to the restaurant to have lunch together.

During the dinner, Richman seemed to be more concerned about Liu Zhicheng's views on the prospects of Canary Wharf, so he asked: "Mr. Liu, have you also learned about the Canary Wharf project?"

Liu Zhicheng smiled and nodded, saying: "I have been there several times, and every time I sighed that the 'European Wall Street' is about to be born!

Unfortunately, the British economy is in decline and the subway project promised by the government has not been approved yet, which is the biggest obstacle to the success of this project. "

Richman agrees: "When I took over the project, the London government promised to build a light rail, a subway extension, a water passenger terminal and a new international airport.

In the end, only the light rail was built as planned. Of course, the office market in London is also very depressed, which is also an important reason for the current situation. ”

Liu Zhicheng wanted to cause Richman to sacrifice his car to save his driver, so he continued: "London can't stop such a big project. I think the resolution to extend the subway line will be passed soon, maybe next year or the year after.

If you can raise enough money to redeem it from the creditor banks, and you can keep doing it for another five to eight years, the project will be a huge success.”

Richman said: "Having said that, if Olympia York Company goes bankrupt, even if I lead a group of venture capital to complete this project, I am afraid that the investors will make money."

Liu Zhicheng smiled and said: "It's better than nothing! You are the leader of the project, you can open a high salary for yourself, or you can take out a personal loan to join the investment.

Then again, your company might not be that bad!"

Richman looked at Liu Zhicheng and said seriously, "Mr. Liu, you are a businessman worthy of my admiration. But I would like to ask you, what is the biggest factor in your success?"

Looking at Richman, who was once worshipped by European and American investors, Liu Zhicheng recalled how popular he was back then and how commercial banks sent money to him. He could not help but sigh that things are unpredictable and Richman will soon have a new nickname - Canadian Boor.

"I think it's a bargain!" said Liu Zhicheng.

"When will the bottom come?" Richman asked quickly.

"Everyone is desperate, and I feel that this is the bottom. When others are panicking, I go crazy, and when others are crazy, I panic. That's probably it!

In fact, I didn’t want to get involved in European and American commercial real estate this year because the market was not panic enough! ”

Richman smiled bitterly and said, “What Mr. Liu meant is that if Olympia goes bankrupt, it will cause real panic in the European and American office markets!
But I admire your philosophical motto: I go crazy when others panic, and I panic when others go crazy. "

That’s right!
Next year or the year after would probably be the best time to buy at the bottom.

However, if Olympia goes bankrupt, its assets will definitely be in the hands of the creditor banks, and he may not be able to buy them at a low price.

You should know that in the past, Olympia’s 1200 million square feet of Manhattan office building was only put up for sale by the bond bank in 1996.

Citibank, Li Chaoren and the Bank of Canada joined forces to compete for it, but Liu Zhicheng had no idea whether they were successful or not.

Probably not!
Liu Zhicheng comforted Richman and said, "Mr. Richman, I have no intention of rubbing salt into your wounds. To be honest, I am not very eager to invest in Olympia's Manhattan office building.

In Hong Kong, the office building projects I invested in can have an annual return rate of 30%. There is no such good soil in the world. "

Richman was surprised and wondered what kind of market ZTM was in, with such a high rate of return!
The two had a very pleasant chat, especially on the Canary Wharf project. Liu Zhicheng made it clear that he could invest, even if no cooperation was reached on the Manhattan office building project.

Of course, the two investment methods are different if Richman can sell the eight buildings in Manhattan to himself at a low price.

He promised: In the Canary Wharf project, Liu Zhicheng could first purchase 10% of the shares for him, and he could redeem them within a certain period of time, only having to pay the principal and interest.

In other words, even if the price of this project appreciates a lot, he only needs to borrow from the bank and then pay Liu Zhi the capital and interest.

Richman's heart suddenly became excited, this condition was simply too good!
Once Olympia goes bankrupt, all the assets will not belong to him, so why should he care about selling the Manhattan office building at a low price!
What's more, the price of office buildings in Manhattan is so cheap that they can be sold!

The deal with Richman will not be concluded immediately, as the procedures involved are somewhat complicated. First, Richman must make a decision;
Secondly, these eight buildings have been targeted by bond banks, so if they are to be sold, they must be negotiated; finally, the two sides will have formal negotiations.

The eight buildings that Liu Zhicheng wanted to buy did not include Olympia's World Trade Center, nor did they include all of Olympia's commercial properties in Manhattan.

The eight buildings have a total rentable area of ​​1180 million square feet (including 245 Park Avenue). Liu Zhicheng's psychological price was US$140 per square foot, totaling US$16.5 billion, or HK$128.8 billion.

Taking 245 Park Avenue as an example, it can be sold to HNA for US$22 billion in the future, and its value will appreciate tenfold in 15 years.

Of course, this income does not include the rent during the period.

Calculated in terms of appreciation potential, it is actually higher than the appreciation of office buildings in Hong Kong.

For example, the current price of Whampoa Plaza in Central should be between HK$80 billion and HK$100 billion.

But at its peak in 2015, it was worth at most 500 billion Hong Kong dollars, with room for appreciation of only 5 to 6 times.

But considering the rental levels, maintenance costs and taxes, office buildings in Hong Kong are making a lot of money.

If this deal is completed, Liu Zhicheng will have spent HK$15.1 billion to purchase a 150 million square meter building.

It would cost HK$128.8 billion to purchase these buildings (maybe more, HK$138 billion is also acceptable).

As for the source of funds, Liu Zhicheng planned to use properties in Hong Kong as collateral to borrow HK$80 billion from commercial banks such as HSBC and Citibank.

In this way, there is no need to worry about these banks being unwilling to lend, because properties in Hong Kong are too valuable.

Moreover, Huangpu Group has eliminated 10% of its debts, so it does not have to worry about no one lending it money.

In the afternoon, Liu Zhicheng came to the New York office of Hongli Investment Management Company.

Since the beginning of this year, Liu Zhicheng has begun to reform Hongli Investment because he knows that he will invest a lot of commercial real estate in the United States in the next two years.

Therefore, the group strengthened its management capabilities here, dispatched senior staff, and recruited a number of American real estate talents (Chinese are preferred) to form a strong management team.

Currently, Hongli Investment owns properties worth approximately HK$30 billion in the United States, mainly concentrated in Los Angeles and San Francisco.

But now, it's clear that the center is moving towards New York.

"boss"

In the conference room, some senior executives of Huangpu Group and Hongli Investment, who were sitting on both sides of the conference table, stood up and spoke respectfully.

Hao Qingwen and other members of the Huangpu Group’s management team accompanied Liu Zhicheng on this inspection trip.

In addition, there are Huang Zuxu, president of Hongli Investment, and Smith, head of North American investment management of Hongli Investment.

Liu Zhicheng nodded, sat in the main seat, and motioned everyone to sit down.

“This time I came to New York, you probably understood my idea, which is to buy eight skyscrapers from Olympia York Company at a low price.

Although the rate of return will not be high even if you invest at a low price, it should still be worth it if you consider the long term.

Of course, this investment may not be successful, but you have to be prepared! ”

"Yes, boss!"

Liu Zhicheng said to Smith: "You have to do a good job in office building management. Excellent management methods can reduce the vacancy rate!

For tenants, we are their waiters and should be ready to solve their problems at any time! For properties, we should maintain them carefully. "

Smith can be considered an old friend of Liu Zhicheng, but he used to be a financial talent, so Liu Zhicheng is a little worried.

"Don't worry, boss. We will manage our properties well and learn from the Whampoa Group."

Liu Zhicheng nodded and continued, "Even if the transaction of the eight buildings is not successful this time, Huangpu Group will purchase a considerable number of high-quality rental properties in Manhattan next year as long-term investment.

As the flagship of my investment in the United States, Hongli Investment must establish a high-efficiency and high-quality team to cooperate with Huangpu Group's investment in North America. "

Seeing that Liu Zhicheng attached so much importance to it, everyone also knew that this boss was going to buy at the bottom in the United States!

Hong Kong is too small to accommodate the Whampoa Group.

Then, Liu Zhicheng listened to everyone’s work reports.

…………

Monday, April 6th.

In the office of Shanfeng Investment Group, Liu Zhicheng is working in a relaxed manner.

I returned to Hong Kong last Friday and got down to work. I quickly dealt with some urgent projects and soon felt relaxed.

If Whampoa Group paid a "down payment" of HK$50 billion to invest in an office building in Manhattan, the company's cash flow would be instantly destroyed.

They had already invested 30 billion Hong Kong dollars in the mainland, and spent another 30 billion Hong Kong dollars on the Miramar Hotel, so all of a sudden 110 billion Hong Kong dollars was gone.

There is no need to worry about the money invested in US stocks. After all, you can cash out at any time, and you can get stable high returns every year without having to worry about losses.

At present, Huangpu Group has invested 4.5 million US dollars in US stocks. The rate of return this year should not be lower than 25%, which is definitely a huge profit.

The problem now is that, assuming the investment in the Manhattan office building is successful, even if the Whampoa Group does not invest in large projects in the second half of the year and only purchases a certain amount of land reserves, it is estimated that the cash flow by the end of the year will be around HK$40 billion.

Not only is the cash flow of the Whampoa Group insecure, but Liu Zhicheng's personal cash flow is only about HK$15 billion, which is simply "terrifying."

The investments that can make big money will be next year, not this year.

(End of this chapter)