Hong Kong Island's New Rich Era

Chapter 44 Whampoa City Plan

The next day, Liu Zhicheng decided to inspect the fixed assets of Huangpu Group, which consisted of three factories and one wharf.

After leaving home, Liu Zhicheng's car drove directly towards Victoria Harbour and arrived at the Hong Kong Whampoa Dockyard Company in Hung Hom Bay.

This is an old shipyard. Judging from the gate, it is quite old and shows its history.

In fact, Huangpu Building is right next to the shipyard.

Liu Zhicheng drove his car directly into the gate and drove through the shipyard. The first thing that caught his eye was rows of warehouses.

After passing the warehouse, we approached the sea and saw huge gantry cranes and ships of various models docked on the coast.

The shipyard executives who came to receive Liu Zhicheng were all foreigners. Liu Zhicheng asked them to free up a passenger ship to inspect the docks and shipyards under the Huangpu Group.

Soon, the passenger ship was ready. When Liu Zhicheng boarded the ship and stood on the deck, he could overlook the entire shipyard (dock).

According to the asset documents of the Whampoa Group, the entire shipyard covers an area of ​​150 acres, which is a very large plot of land in Hong Kong.

In his previous life, Li Chaoren demolished the shipyard here, changed the land use, built 88 sea view buildings, named it Whampoa Garden, and made him 5 billion Hong Kong dollars.

Now that Liu Zhicheng has obtained the shipyard land, there is no specific plan yet on how to develop the land.

His current identity is a manufacturer, not a real estate developer. Manufacturing always comes first, and real estate is only auxiliary, which allows him room to maneuver on the road of manufacturing.

In this way, Liu Zhicheng and his party sailed slowly on the Victoria Harbour, bypassed the Tsim Sha Tsui Pier and Harbour City Shopping Center, and arrived at the second stop of the day: the Tai Kok Tsui factory area.

The business of the Tai Kok Tsui plant is tugboats, with a total of thirteen tugboats and two sightseeing passenger ships.

The main business of tugboats is to assist various ocean-going cargo ships in entering and leaving the port, docking and leaving the dock. The sightseeing boats are rented out to tourists to enjoy the beautiful scenery of the Hong Kong River in Victoria Harbour.

Liu Zhicheng plans to have the shipyard transform the two sightseeing cruise ships into private yachts, one for his own use and one for his parents.

Liu Zhicheng stood at the bow of the ship, thinking about the use of these lands. Huangpu’s most valuable assets were three shipyards and a dock.

Located in Hung Hom, Tai Kok Tsui and Heung Kong Tsai Shipyard, each factory area has a large area of ​​land reserved. In Hong Kong, where land is scarce and the population is dense, the future value is huge.

Currently, Kwai Chung Container Terminal No. 4 has not been completed and still requires capital investment for construction. The only income of the Whampoa Group comes from the tugboat business and the shipyard maintenance business.

"Mr. Liu, even if we restart the construction of Pier 4 now, it will not be completed until next year." Hao Qingwen reported the construction status of Pier 4 to Liu Zhicheng.

"One year is not a long time. The main thing is how much money will it cost to complete this project?"

"It will take about another 7 million Hong Kong dollars, Mr. Liu. Huangpu's tugboat and maintenance business is very profitable. If the funds are not used for other purposes, it will be enough to build the dock."

"Is the profit so huge?" Liu Zhicheng still underestimated the hematopoietic function of Huangpu Group. He really didn't know how Hutchison International got into such a mess.

Liu Zhicheng had been thinking about the next plan of the Whampoa Group. From the time the ship sailed from Tai Kok Tsui to Xiangjiang Tsai until he got off the ship, he was thinking about the development and utilization of the Whampoa land.

It is impossible not to develop such a prime piece of land. As for the debt, it will definitely be resolved in the financing plan.

...............

In order to boost the share price of Huangpu International and raise more funds, Liu Zhicheng decided to formulate a development plan for Huangpu Shipyard. The next day, in the Huangpu Group office, Liu Zhicheng and Hao Qingwen were discussing the development plan of Huangpu Group.

"I have planned a big development plan for the old factory in Hung Hom (the land at the port) located next to the group," said Liu Zhicheng.

Hao Qingwen thought about his boss's proposal and said, "Mr. Liu, this piece of land is really very good. It is large, close to the sea, and has an undersea tunnel and subway planning, so transportation is convenient."

Hao Qingwen looked at the boss and continued, "But it is industrial land. If you want to develop this land, you must change the nature of the land. If you want to change from industrial to commercial, you need to pay a huge price difference to the Hong Kong government. Can you negotiate with the Hong Kong government?"

Liu Zhicheng smiled and said, "The Hong Kong government's fiscal revenue basically depends on land income. It would be very difficult to ask the Hong Kong government to lower the price. I currently want to have a large development plan to boost Huangpu's share price."

Liu Zhicheng continued: "As for the land price, I don't need to ask the Hong Kong government to lower the price. Just give it the right price. Of course, we can announce to the public that we are ready to negotiate with the Hong Kong government."

Hong Kong is a free port and is famous worldwide for its low taxes. Except for a few specialized tax havens, few places can achieve Hong Kong's low tax rates.

Hong Kong's defense spending is borne by the sun never sets, its special geographical location, high-quality deep-water ports, which have brought about a large amount of re-export trade and the wealth effect it brings, and the fiscal revenue brought by land auctions are the core reasons why the Hong Kong government can maintain low taxes.

Every year, almost half of the Hong Kong government’s fiscal revenue comes from real estate auctions, so the Hong Kong government is also one of the main drivers of Hong Kong’s high housing prices.

Therefore, for the land that is "converted from industrial to commercial", the Hong Kong government needs to charge huge land compensation fees. If normal operations are followed, the final cost will be higher than the normal market price, and the development value will be small.

Therefore, in the past, many Hong Kong real estate developers liked to hold back their properties and hold them back from sale, just to wait for the house prices to rise before selling them.

"Mr. Liu, although I haven't calculated it carefully, referring to the current land prices near Hung Hom, if we want to develop it, I'm afraid we will have to pay a price difference of about 5 million yuan, which is a bit uneconomical," said Hao Qingwen.

"You mean, with the current housing prices, it's not cost-effective to invest 5 million yuan here?" Liu Zhicheng asked with a smile.

"Yes." Hao Qingwen nodded.

The 200 million square feet of land and the 5 million yuan price difference from industrial to commercial use are not worthwhile at the current real estate prices. And the subsequent development costs will be even higher.

But Liu Zhicheng thought of his previous life, when the Taikoo City of the same nature was less than half the size of the land of the Huangpu Group. Although it was a huge investment, the profits obtained were unprecedented for the Taikoo Group.

Liu Zhicheng didn't want to follow the path of Li Chaoren in his previous life. Although Hutchison Whampoa made 5 billion Hong Kong dollars, he still looked down on it.

"I agree with your idea."

Liu Zhicheng affirmed his statement and continued: "If we go back to 1968, would you still think so? Do you think it would be risky if we commercialized this land at that time?"

"this?"

Hao Qingwen was stunned, but immediately understood what his boss meant and asked, "Mr. Liu, do you think the real estate market will replicate the bull market of 68-72?"

When Liu Zhicheng heard Hao Qingwen's question, he could finally confirm that this guy was not a time traveler.

"Remember one thing: real estate development has a certain cyclicality. I expect a new bull market to come soon."

"So we need to convert this land into commercial property as soon as possible, and the cost will be supported by a syndicated loan."

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(End of this chapter)