When "Li Ka-shing sells houses at a discount in Shanghai" once again aroused public opinion in the mainland, Cheung Kong Group held a mainland roadshow kick-off meeting for its new project "blue coast" in Tsim Sha Tsui, Hong Kong.
This project is located above the Wong Chuk Hang MTR on Hong Kong Island. It is two MTR stations away from Admiralty and is close to traditional luxury areas such as Deep Water Bay, Repulse Bay and Shouson Hill.
blue coast acquired land in 2018. It was Li Ka-shing’s eldest son Li Zeju’s first land acquisition in Hong Kong after taking over the Cheung Kong Group. It was 2 years since Cheung Kong last acquired land in Hong Kong.
Li Zeju's debut was quite ambitious. The Wong Chuk Hang site had a floor area of 1.506 million square feet, and the market valuation at the time was between HK$22.6 billion and HK$36.14 billion. Due to its large scale and the fact that it is located above the subway, the land auction at that time also attracted mainland real estate companies such as China Shipping and Country Garden to participate in the bidding.
The cost price of the Wong Chuk Hang land parcel was as high as HK$28,000 per square foot at the time, confirming its positioning as a luxury property from the beginning.
is different from the small apartments currently sold in Hong Kong. "Blue Coast" is a large apartment with 3 to 4 bedrooms.
html After Hong Kong completely "removed spicy food" at the end of February, the sales offices of many Hong Kong real estate properties welcomed many mainland buyers. Belgravia Place, a 39-square-meter three-bedroom property in Sham Shui Po, became the first "Japanese disc" after the "no spicy food policy". Many properties with a total price of around 5 million were sold out at the end of the trading day, and small-unit properties were popular.From this point of view, this project of Cheung Kong is not the most popular type of home buyers from the mainland. Their goal is the "high-end purchasing power from the mainland."
This is also the original intention of this promotion meeting. Cheung Kong has invited a number of Media from the mainland, Guo Ziwei, chief manager of the sales department of Cheung Kong Holdings, revealed that currently only 30% of the project inquiry crowd is non-Hong Kong people, and they hope to attract more attention from mainland purchasing power through more offline routes.
Seize the purchasing power of high-end elites
According to information disclosed by Cheung Kong, blue coast has a total of 1,200 residential units. The first phase is two 29-30-story properties with club facilities attached, providing a total of 642 2- to 4-bedroom mansions. .
Although the price of blue coast has not yet been disclosed, the cost price is much higher than the recent hot-selling real estate prices in Hong Kong. The lowest price per foot of Belgravia Place is as low as HK$15,902, which is almost half of the cost price of "Blue Coast". In addition, "blue coast" is mainly large-scale apartments, with the main apartment nearly 1,000 square feet, and the total price easily exceeds tens of millions of yuan.
"For the first-hand properties on the market now, I have seen that most of the properties sold are biased towards small units." Guo Ziwei of Cheung Kong Industrial said at the project launch meeting on March 15.
Changshi's positioning is very clear, targeting the elite group with a monthly income of more than 100,000 Hong Kong dollars. This elite group comes from the "Experts and Talents" program.
Since Hong Kong suspended the Investor Entry Program in 2015 (it will be restored again in 2023), the Talents Program and the Talents Program have become the two mainstream channels for attracting foreign talents in Hong Kong. In 2023, Hong Kong's "Excellent Talents" program began to lift quota restrictions. According to Hong Kong SAR government data, the number of outstanding talent applicants in 2023 (80,207 people) was 4.89 times that of 2022 (16,396 people), and the number of approved people (12,969 people) was 2022 4.46 times that of the year (2845 people).
Hong Kong Centaline Real Estate introduced that according to the latest data released by the Hong Kong SAR government, the number of people who passed the "Professional" and "Excellent Talent" programs last year reached 70,000. Both programs have threshold requirements for work ability and income. That is, their median monthly income is HK$50,000.
"This group of professionals and talented people are the real elites. They are not the rich second generation who bring money. They are a group of elites that people all over the world want to grab now. They will be the backbone of Hong Kong in the future. They are now renting more concentrated apartments. In the urban area and next to the subway, blue coast can do it all." said Li Yaozhi, CEO of Centaline Real Estate China.
Guo Ziwei did some calculations at the scene, "A monthly salary of 50,000 yuan is definitely a mid-to-high level, and the other 30% is a monthly salary of more than 100,000 yuan. This group of people has strong purchasing power and has great potential. This group of people are very motivated to buy property. The current population of the Guangdong-Hong Kong-Macao Greater Bay Area is about 80 million. If there are 8,000 professionals, and if they happen to subscribe to one of our projects, we will actually not be able to supply them."
In order to attract the purchasing power of this group of high-end elites, Changshi provides a series of free supporting services, such as providing hotels in Hongkan and Ma'anshan to them. "I believe that other peers may not be able to do this. At least we can allow our customers to live in Hong Kong with peace of mind after purchasing a property. From the moment they purchase the property, we will have dedicated personnel to receive them." Not only that, Cheung Kong also plans to provide them with Including legal consultation for living and studying in Hong Kong, rental arrangements before buying a house, etc.
In fact, as early as October last year, after Hong Kong revoked some tax policies for "non-Hong Kong residents" to purchase homes, the demand for home purchases by some mainland talents who came to Hong Kong through the Talents and Professionals Program had begun to be activated. In Chang Shi's judgment, the power of "removing spicy food" is obviously much greater.
Changshi said that next they will conduct offline road shows in Shenzhen, Beijing, Shanghai and other mainland cities. The last time they held a Hong Kong project roadshow in the mainland was in 2017.
once again staged discount and selling in the mainland?
Compared with other Hong Kong real estate companies, Li Ka-shing and Cheung Kong, they have unparalleled traffic advantages in the mainland.
Since 2013, Hong Kong’s richest man, Li Ka-shing, began to sell off mainland assets in large quantities and invest them overseas, so much so that he “bought half of the UK.” In 2015, he once said “Don’t let Li Ka-shing get away” and caused an uproar.
At the same time as the "blue coast" was launched on Hong Kong Island, Cheung Kong Industries began to promote its "noble field" project in Putuo District, Shanghai. The published price is about 90,000 yuan/square meter, which is slightly lower than the price in 2019. Compared with the new house Pinzun International that opened at the end of last year in the same area, which was about 109,800 yuan/square meter, it is equivalent to a 15% discount in the high-end field.
Suddenly, the voice of Li Ka-shing selling mainland assets resurfaced.
"This price is actually set according to the requirements of the Housing Authority, not our developer's requirements. Of course I want to increase the price a little, but because the Housing Authority still does it according to its own system." This new project At the promotion meeting, Guo Ziwei, chief manager of the sales department of Changjiang Industrial, responded to "Phoenix Weekly Real Estate" on this matter.
Guo Ziwei also introduced the sales situation in the high-end field. "We launched sixty (units) of the project in Shanghai, and 500 customers came today (March 15). It belongs to Putuo District, which is a second-tier area in Shanghai. It does not reach the top areas in Jing'an District. It has attracted so many customers, and the current market is rising in a very healthy and steady way."
Changshi is very familiar with the mainland market. During its nearly 20 years in the mainland, it has lowered its pricing several times to respond to the market. of downturn. As early as 2008, the villa project developed by Changshi in Beijing was well-known all over the world and was "fire sale" at a price as low as 53% off. In August last year, Cheung Kong's luxury luxury project "Yucuiyuan" in Beijing was sold for 90,000 yuan/square meter, which was a 10% discount compared to the original price of 100,000 yuan/square meter.
Not only that, Yangtze River Industrial also returned 3.5 billion in cash in 2022 by selling Shanghai Century Plaza. At that time, public opinion accused Cheung Kong Holdings of divestment in the Mainland. Li Zeju responded publicly: "This statement is very 'old-fashioned'. Selling properties is a daily business and main industry, and there is no divestment."
In fact, Cheung Kong Holdings is also in Hong Kong "Discount on bargains". At the beginning of 2014, Li Ka-shing offered a 25% discount on his first real estate project in the new year. In May 2014, a real estate project in Tsuen Wan, Hong Kong also opened with a 15% discount.
"We have always been committed to selling properties at market price or lower than the market price to promote sales. When the market conditions were clearer, we actively purchased land and completed several transactions last year. We believe that we should buy land or property in a counter-cyclical manner, and now is the best time. Stable last year." In August last year, when Cheung Kong Holdings was discounting in Hong Kong, Li Zeju said to the public.
Trapped in falling net profit
The discounted project that Li Zeju publicly responded to was Cheung Kong's new Yau Tong project. The sale of this project at 30% off in August last year triggered expectations of a downturn in the Hong Kong property market. At that time, public opinion was in an uproar, and "Superman Li" even shorted his own territory.
At that time, the performance of Cheung Kong Holdings was severely hampered by the downturn in the Hong Kong property market.In the first half of 2023, Hong Kong's property market was under pressure. Cheung Kong Group's income from property sales and property leasing dropped by 30%, and the actual net profit received by shareholders dropped by 20%.
Yangtze River Group's 2023 interim performance report shows that during the reporting period, its sales revenue from properties in Hong Kong and the Mainland decreased compared with the same period last year. The main residential projects sold include Hong Kong's Mingri Jiudu Mountain, Dongguan Harbor Plaza in Mainland China, Shanghai's Lakeside Mansion and Beijing's Yutianxia.
In addition to responding positively to the reasons for the discount, Li Zeju also called at the performance meeting in August: It is time to "counter-cyclical" home buying. "If citizens want to buy a home and can afford it, the time to enter the market is better now than three years ago. When everyone is optimistic about the market and interest rates are low, or when there is a greater chance of interest rates rising, perhaps you should be more cautious. (Caution); but when everyone is optimistic and interest rates are high, most market risks will be lower."
At that time, Changshi had already judged some signs of market recovery: "Compared with three years ago, current interest rates are The possibility of falling is higher and the trend is clearer. Land prices have also fallen close to the government's cost price. Compared with previous years, the possibility of land prices falling again is lower."
2 months later, Hong Kong began to tentatively lift parts of the property market The regulation has brought significant market vitality, and it was not until the end of February this year that Hong Kong finally fully "removed the spicy food".
March this year has just passed halfway, and the effect of "removing the spicy" effect of the Hong Kong property market is still fermenting.
Hong Kong Centaline Real Estate data shows that as of March, more than 2,000 first-hand housing sales have been recorded in Hong Kong, and the number of transactions in March is expected to reach 4,000-5,000, which is expected to set a record in November 1998 (when the first record was 6,203) New highs later. Among them, inquiries from mainland buyers about buying properties in Hong Kong have increased 40 to 50 times, and many of them come through channels such as the "High Talent Access" program, the Talents Program, and immigration.
Can Cheung Kong Holdings catch up with the trend of "removing spicy food", and what are the chances of the Li family winning this time?
