Hong Kong's new giants

Chapter 456 [Ambitious]

The next day.

Richman brought Lin Zuhui and his party to the building at No. 245 Park Avenue.

Lin Zuhui has an impression of this building. In his previous life, HNA won it for US$2017 billion in 22. With his own strength, he brought New York real estate back from the bottom.However, HNA later went bankrupt, and the building was listed for US$18 billion without a transaction.

"Mr. Lin, this building was built in 1967, with a height of 48 floors and a floor area of ​​143 million square feet. It was renovated in the mid-80s, and the current occupancy rate is 79%." Richman introduced with some pride said, but soon his expression became sluggish again.

Lin Zuhui observed the building, and also observed Richman, knowing it well.

Anyway, he came to buy an office building in Manhattan with the mentality of picking up a bargain, and he would definitely not buy it if it was too expensive.

Everyone walked towards the building, Lin Zuhui asked: "What is the average rent price?"

He must know it in his heart, but after all, the rent of each building is different.

Richman will not lie to Lin Zuhui, because it will not be good for him.He thought for a long time yesterday, and felt that his greatest hope was to complete London's 'Canary Wharf' and profit from it.Of course, he can be said to be bankrupt now, and naturally he cannot redeem such a large project, so a large number of venture capital is needed.And Lin Zuhui is undoubtedly the best venture capitalist, he is the business leader of Xiangjiang, and he is the richest Chinese.

"Currently $30 psf per year!"

Lin Zuhui did some calculations, and the total is US$2.5 per square foot per month (about 20 Hong Kong dollars per square foot), which is not as good as the lowest office price in Kowloon, Hong Kong.

Hong Kong's office buildings are currently the highest in the world, surpassing Tokyo, not to mention Manhattan, with an average range of HK$30-60 per square foot per month.Office buildings in the Central District have reached 60 Hong Kong dollars per square foot per month, and within the next two years, they will skyrocket to more than 90 Hong Kong dollars per square foot, and the highest should be 110 Hong Kong dollars per square foot in Exchange Square.

As for Manhattan, even before the Internet bubble crisis, it was estimated to be only 45 Hong Kong dollars per square foot (annual rent of 60 US dollars per square foot), far less than Xiangjiang.

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 the timing of buying is a bargain, the price will be converted.

However, buying a Manhattan building is a symbol of strength;

At the same time, they are also paying 'protection fees' in disguise. After all, both New Times Group and Lin Zuhui have invested heavily in US stocks. relationship with a high rate of return.After all, the rate of return on securities is too high, and you still have to invest in some assets with a medium rate of return (10% to 15% rate of return after deducting bank interest).

A group of people took the elevator and experienced this building. Overall, it is indeed a relatively new building.

But Lin Zuhui knew that the other buildings in Olympia might all be from the 50s and [-]s.

In 1902, New York built a 22-story Flatiron Building, which was the tallest building at the time.Therefore, Li Hongzhang was matched with buildings such as the Empire State Building (1931) on the Internet in his previous life to set off Li Hongzhang's despair.

After visiting No. 245 Park Avenue in Manhattan, Lin Zuhui said to Richman again: "The current market price of such a building is a building?"

Richman thought for a while, and then said: "The market price is estimated to be 3 million US dollars, but there must be no one buying it!" Very professional.

Lin Zuhui nodded. Buyers and sellers of this kind of building will test their compatibility because there is no standard.

According to Xiangjiang's calculation, the unit price is generally 100 times the rent, that is, the selling price of 250 US dollars per square foot, and this building needs 3.5 million.However, the vacancy rate of this building is so high, and the annual maintenance fees and taxes are so high, it is far from possible to calculate it in this way.

If Lin Zuhui made a psychological price, it would be 250 times the occupancy rate of 80%, and then discounted by 140%, that is, the unit price of 143 US dollars; based on the rental area of ​​2 million square feet, [-] million US dollars is more appropriate.

This price, before 1995, did not have much increase.The annual rental net profit may not outperform high inflation, and the rate of return may only be 5% to 8%.

After inspecting No. 245 Park Avenue in Manhattan, Lin Zuhui and Richman came to the restaurant to have lunch together.

During the meeting, Richman seemed to be more concerned about Lin Zuhui's views on the prospects of 'Canary Wharf', so he said: "Mr. Lin also knew about the Canary Wharf project?"

Lin Zuhui nodded with a smile, and said: "I have been there several times, and every time I am lamenting that 'European Wall Street' is about to be born! It is a pity that the British economy is in a downturn, and the subway that the government promised for this project has not been approved for a long time, which is the biggest constraint on this project." key to the success of the project."

Richman said with deep empathy: "When I took over this project, the London government vowed to build 1 light rail, 1 subway extension line, 1 water passenger terminal and 1 new international airport. In the end, it was only built as planned. Of course, London office buildings are also very depressed, which is also an important reason for the current situation.”

What Lin Zuhui wanted was to cause Richman to lose his car to protect his handsome man, so he continued: "It is impossible for London to suspend such a large project. I think a resolution on the extension of the subway line will be passed soon, maybe next year or the year after. If You can pull in enough money to redeem it from the creditor banks, and if you stick around for another five to eight years, the project will be a big hit.”

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

Lin Zuhui smiled and said: "It's better than nothing! You are the leader of the project, you can offer yourself a high salary, and you can also invest in personal loans. But then again, your company may not be so bad!"

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

Looking at Richman, who was once held on the altar by European and American investors, and remembering how popular he was back then, those commercial banks sent money to him one after another. Lin Zuhui couldn't help sighing that the world is impermanent. There will be a new nickname - the Canadian Buggy.

"I think it's bargain hunting!" Lin Zuhui said.

"When is the bottom?" Richman asked quickly.

"Everyone is desperate, and I think it's the end. I'm crazy when others panic, and I panic when others are crazy. It's probably like this! Actually, I didn't want to get involved in European and American commercial real estate this year, because the market is not panic enough. !"

Richman smiled bitterly and said: "Mr. Lin means that if Olympia goes bankrupt, it will lead to real panic in the European and American office markets! However, my philosophical motto for you - I am crazy when others panic, and when others are crazy I panicked and was in admiration."

Isn't that so!
It should be the best time to buy bottoms next year or the year after.

However, if Olympia goes bankrupt, its assets must be in the hands of creditor banks, and he may not be able to buy it cheaply.In the past life, Olympia’s 1200 million-square-foot Manhattan office building was sold by the bond bank in 1996. Citibank, Li Chaoren, and Bank of Canada jointly fought for it. As for whether it succeeded, Lin Zuhui didn’t know.

Probably not!
Lin Zuhui comforted Richman and said, "Mr. Richman, I don't intend to rub salt in your wounds. Speaking of which, I am not very eager to invest in the Manhattan office building in Olympia. In our Xiangjiang, the office building projects I invest in can have With a rate of return of 30%, such good soil cannot be found in the whole world.”

Richman was surprised, and sighed in his heart what kind of market is ZTM, with such a high rate of return!
The two chatted very speculatively, especially on the Canary Wharf project. Lin Zuhui made it clear that he could invest, even if the Manhattan office project did not reach a cooperation.

Of course, the two investment methods are different. If Richman can sell the eight buildings in Manhattan to himself at a low price, he promises: In the Canary Wharf project, Lin Zuhui can first buy 10% of the shares for him, and he can Redeemed within a certain period, only need to pay the principal and interest.

In other words, even if the price of this project appreciates a lot, he only needs to borrow money from the bank, and then pay Lin Zuhui the principal and interest.

Richman's heart suddenly became hot, this condition is simply too superior!
Once Olympia goes bankrupt, all assets will not belong to him, so why should he care about the cheap sale of Manhattan office buildings!
What's more, the current price of Manhattan office buildings is so cheap that they can be sold!

The deal with Richman will not be concluded immediately, and the procedures inside are somewhat complicated.First of all, it was up to Richman to make a decision; secondly, the eight buildings had already been targeted by bond banks, and if they were to be sold, they had to be negotiated; finally, it was the formal negotiation between the two parties.

The eight buildings that Lin Zuhui wants to buy do not include Olympia's World Trade Center, nor does it include all of Olympia's commercial real estate in Manhattan.

These eight buildings have a total rental area of ​​1180 million square feet (including No. 245 Park Avenue building). The psychological price given by Lin Zuhui is 140 US dollars per square foot, a total of 16.5 billion US dollars, or 128.8 billion Hong Kong dollars.

Take the 245 Park Avenue building as an example. It can be sold to HNA for 22 billion US dollars in the future, and its value will increase by 15 times in 10 years.Of course, this part of the income does not include the rent during the period.

In terms of appreciation space, it is actually higher than the appreciation of Xiangjiang office buildings. For example, the current price of Central Plaza should be 80 billion to 100 billion, but at the peak in 2015, it will be worth at most 500 billion Hong Kong dollars, and the appreciation space is only 5 ~6 times.

But taking into account the rent level, maintenance costs, and taxes, Xiangjiang's office buildings are making a mess.

And if this deal is concluded, Lin Zuhui will spend 15.1 billion Hong Kong dollars to buy the next building of 150 million square meters, which is much cheaper than what Li Chaoren bought a year ago.

At that time, Xiangjiang investors will know at a glance who will be the best bargain hunter.

As for the source of funds of 128.8 billion Hong Kong dollars (maybe more than 138 billion is also acceptable), Lin Zuhui intends to use Xiangjiang’s properties as collateral to borrow 80 billion Hong Kong dollars from commercial banks such as HSBC and Citigroup.

In this way, there is no need to worry that these banks will not lend, because the property in Xiangjiang is too valuable.Moreover, New Era Group's debts are all gone, and there is no concern that no one will borrow money.

In the afternoon, Lin Zuhui came to the New York office of the 'Fuli Real Estate Investment Management' company.

Since the beginning of this year, Lin Zuhui has started to reform Fuli Real Estate, because he knows that he will invest a large amount of commercial real estate in the United States in the last two years.Therefore, the group has strengthened its management capabilities here, dispatched senior staff, and recruited many American real estate talents (Chinese are preferred) to form a strong management team.

Currently, Futura Real Estate owns about HK$30 billion of properties in the United States, mainly in Los Angeles and San Francisco, but now, it is clear that the center is moving towards New York.

"boss"

In the meeting room, some senior executives of the group and Fuli Real Estate sat on both sides of the conference table, stood up and said respectfully.

Liang Zhenxun, Gao Yi and other management of the group accompanied Lin Zuhui on this visit; in addition, there were Futura Real Estate President Chen Mingzhi and senior staff of Futura Real Estate Investment Management.

Lin Zuhui nodded, took the main seat, and signaled everyone to sit down.

"When you come to New York this time, you probably understand my idea, which is to buy 8 skyscrapers in the hands of Olympia York at a low price. Although the return rate will not be high even if you invest at a low price, if you think long-term , it should still be very worthwhile. Of course, this investment may not be successful, but you have to be prepared!"

"Yes, boss!"

Lin Zuhui said to Chen Zhizhi: "In terms of office building management, you must do a good job. Excellent management can make the vacancy rate lower! For tenants, we are their waiters, and we must be prepared to solve their troubles at any time! For property management , we have to take care of it.”

Chen Mingzhi is an executive from Xiangjiang, but he has been working in the United States for four years and is quite familiar with this place.

"Boss, don't worry, we will manage our properties well, and learn from Chinese real estate."

Lin Zuhui nodded and continued: "Even if the transaction of the eight buildings is not successful, I will buy a considerable part of high-quality rental properties in Manhattan next year for long-term investment. The flagship must be developed into a team with high efficiency and high quality.”

Seeing that Lin Zuhui attaches great importance to it, everyone also knows that this boss is going to buy the bottom in the United States!
Xiangjiang is too small to accommodate the New Times Group.

Then, Lin Zuhui listened to everyone's work report.

Commercial real estate in Los Angeles is a bit miserable, with a vacancy rate of 22%.Of course, this is known to the general environment.The "commercial center" project in Los Angeles encountered a slump in European and American office buildings before it was completed.In addition to the land and construction costs in that year (1988), the investment was also large, so it is not optimistic at present.

It's just a long-term investment. As long as the debt is reasonable, it will always make money.

Lin Zuhui thought for a while, and said to Liang Zhenxun: "Take out another 1 million US dollars and inject it into Fuli Real Estate Investment Management Company, and then buy the shares of General Dynamics, and buy them as soon as possible."

Liang Zhenxun said quickly: "Okay, I'll arrange it right away!"

A total of 4.5 million US dollars has been invested in US stocks, but the shares of General Dynamics are expected to be released by the end of next year.The investment strategy is because Lin Zuhui has seen Buffett's investment experience.

After acquiring the Miramar Hotel and investing in the mainland, each spending 30 billion Hong Kong dollars, New Times Group still has more than 60 billion Hong Kong dollars in its account.The net profit and withdrawal in the second half of the year will not be less than 60 billion. In short, even if it invests 50 billion in office buildings in the United States (and borrows 80 billion plus), New Times Group still has a stable cash flow.

Therefore, there is no need to worry about insufficient cash flow.

(End of this chapter)