5/3/2018-9

Changhe Department gave up the real estate enrichment equation?

Li Ka-shing started his career with plastic flowers, and then he made use of his foray into the real estate industry to become the richest man. Whether or not he will continue to lead the Changshan system, he will be praised by the world and even future generations. In view of Li Ka-shing’s seldom investment in Hong Kong in recent years, and even reducing the holdings of property in the Mainland successively, does it mean that the businessman who has become rich by real estate is no longer convinced that the estate is still a golden egg?

“Low Collection" has always been the heart of Li Ka-shing’s real estate business. After the “June 7th Riot", the transition from wearing plastic flowers to engage in the real estate industry, the negotiations between Hong Kong and China in the early 1980s on the future of Hong Kong, and even after the Asian financial turmoil, during the long-term downturn of the property market in Hong Kong, Li Ka-shing continued to pursue the reverse thinking, that is, when the property market fell. Buy land, wait until the property market bottoms out, and then enter the rising cycle and sell the building.

Reverse operation to get rich

This approach can not only reduce investment in construction and construction costs, but also avoid the situation of reducing prices, selling cash, and then “eclipsing sales” when the property market peaks and begins to enter the down cycle. This may explain why the Changhe Line has deliberately paid high prices in the past 10 years to rob the land in Hong Kong and the Mainland of Dalat Sha during the upswing of this super property market.

However, this is just a common sense judgment. In recent years, the Changhe line has rarely been successfully landed. In addition to the cyclical retrograde operation, does it reflect Li’s father’s and son’s views on Hong Kong’s real estate industry and a fundamental change has taken place? In 2016, Mr. Li Zeju mentioned at an analyst conference after the performance that it was difficult to identify real estate projects with reasonable returns. It was also made clear that apart from the Central Centre, “no one property must be held”.

When Li Zeju made his remarks, the market immediately speculated that Lee’s father and son had made a fuss about Hong Kong’s real estate industry. Observing that the Changshi Group (1113) has been reorganized into a pure real estate company since 2015 and started again in 2016. The reintroduction of non-real estate business will reflect whether it is known as a stable real estate business. Will it be replaced by non-real estate business and become The company’s core business?

Long-term or fading out industry

The following possible signals may indicate that the Changhe system really intends to fade out of Hong Kong’s real estate industry. First, the sale of real estate business to third-party investors. Although this possibility cannot be completely ruled out, due to the actions of the Changhe Line, the political flavor is extremely strong. If it does occur, it will have far-reaching implications for Hong Kong. For Li Ka-shing, who loves Hong Kong and the country, will he be willing to take such a “dangerous" move?