Chapter 215: The Beginning of the Supermarket Strategy
After some final pleasantries, Liu Liewen and his team departed. Yang Wendong didn't keep them any longer—this wasn't the right time. The Liu family was in crisis and swamped with more pressing matters.
Once they left, Zheng Zhijie stepped closer with a smile and said, "Mr. Yang Wendong, now that this acquisition is completed, and with the properties and land we have in Kwun Tong, Changxing Group has become one of the largest Chinese-owned real estate holders in all of Hong Kong."
"Haha, true enough," Yang Wendong nodded. "If the Liu family weren't in such desperate need of cash, we'd never have been able to buy buildings in locations like these—no matter how much money we had."
Commercial buildings in Central Hong Kong rarely came up for sale during a booming market. And when they did, the competition was fierce. Unless there was an economic downturn or the owning conglomerate was in financial distress, these opportunities simply didn't exist.
Properties in Admiralty, Wan Chai, and Causeway Bay were slightly more accessible, but still challenging to obtain. Even finding plots large enough to build new towers wasn't easy.
Zheng Zhijie continued, "The building on Des Voeux Road in Central, which was supposed to become the new Liu Chong Hing Bank headquarters, has a total floor area of 360,000 square feet. It includes a three-story shopping mall at the base and 255,000 square feet of office space across 22 floors.
The tower on Hennessy Road has 16 stories, totaling 230,000 square feet. It's fully leased at the moment and generates more than HK$400,000 in annual rental income.
As for the two buildings in Causeway Bay…"
Zheng Zhijie went on to describe each one in detail. Yang Wendong already had a general understanding, but now that the assets were officially under his control, he needed to consider potential adjustments.
"Good," Yang Wendong said after listening. "So with this sudden acquisition of 1.5 million square feet of commercial property on Hong Kong Island, where do we now rank?"
Zheng Zhijie paused and replied, "I'd estimate we're somewhere in the top 20. Groups like Hongkong Land, Swire, and Wheelock still far surpass us. Then there are smaller Western firms—many of which have been in Hong Kong for over a century. They hold vast amounts of land, including large undeveloped plots that could be turned into several million square feet of built space.
And then there are the older Chinese families—the Ho family, the Lee family, the Woo family. They've been collecting land for decades. Most outsiders don't even know how much they truly own—we can only guess."
"Right," Yang Wendong nodded. "Still plenty of work to do."
Hong Kong might be small in size, but it was filled with hidden giants. Many wealthy families stayed deliberately low-key.
For example, in the 1980s, when Wheelock was acquired, the public was shocked to learn it had actually been controlled by a Chinese family all along—they had just stayed out of the spotlight.
Zheng Zhijie added, "In Kwun Tong alone, not including the industrial park land held by Changxing Industrial, we've acquired nearly 2 million square feet of commercial land over the past six months.
Much of it is just land or older, low-rise buildings."
"Don't count those just yet," Yang Wendong said casually. "We'll classify them as undeveloped land for now. But we should keep acquiring more.
Same with Tsim Sha Tsui—even if we can't find large plots, we should still buy smaller ones where possible."
High-end properties on Hong Kong Island were still safe buys for the foreseeable future. Even with the 1966 crash looming, prices in Central wouldn't fall much. Selling in 1964 at the peak would be ideal.
As for the massive tracts in Kowloon, especially undeveloped land—they were currently undervalued and wouldn't decline much even during a downturn. These were Yang Wendong's top acquisition targets.
His capital was limited, so he had to choose carefully. He avoided mid-tier high-rises in mediocre areas—those would become his targets during the 1966 crash when prices bottomed out and his cash reserves were higher.
"Got it. I'll focus on land and older low-rise buildings," Zheng Zhijie nodded. He understood Yang Wendong's strategy well.
Part of it was based on confidence in Hong Kong's future economy. The other part was that the growth of Changxing Industrial in Kwun Tong and Tsim Sha Tsui would stimulate local economies, driving up land and property prices.
And as the driving force behind it all, Changxing Group had every reason to profit from the boom it helped create.
Yang Wendong continued, "Old Zheng, HSBC and Standard Chartered gave me HK$5 million more than we used for the Liu properties. Right now, property prices are still low. And the crisis at Liu Chong Hing is starting to spread into the broader banking system.
I expect some real estate firms will soon face financing difficulties. Keep your eyes open. If a good opportunity pops up, let's try to grab another building on Hong Kong Island—or an older cinema building like Lan Asia with a big footprint."
Yang Wendong wasn't against buying smaller properties like shops or single office floors. Changxing Real Estate would still pick those up.
But they weren't worth his personal attention. He wanted whole buildings. Even if they weren't in Central, as long as they weren't too remote, he was interested. In this era, if a high-rise had been built, the location was almost guaranteed to be solid.
"Understood. I'll continue monitoring the island's real estate market," Zheng Zhijie said. "It's just that full-building listings don't come around often. We might need to put out feelers.
But doing so would give others the upper hand initially."
"No matter. As long as we end up with the building, it's worth it," Yang Wendong said. "Even if others know, there'll always be competition.
No one's stupid. Anyone bullish on real estate knows how valuable these high-end properties are."
If not for the widespread uncertainty about Hong Kong's future, real estate prices would be rising even faster.
After 1985, despite already being high, property prices rose tenfold in a decade. This was why.
"Got it." Zheng Zhijie then asked, "Mr. Yang Wendong, of the seven properties, six are completed. But the Des Voeux Road tower is still under construction.
We'll need to invest another HK$400,000 or so to finish it—not including interior design. The Liu family planned to use it as a bank HQ, so their interior budget was over HK$1 million. Pretty luxurious.
If we're going to make it Changxing Group's future headquarters, you'll need to decide on the interior style."
"Let's go see it in person," Yang Wendong said.
He'd already looked at the building from the outside before, but since he hadn't owned it yet, he hadn't entered.
"Alright, I'll arrange the car," Zheng Zhijie replied.
Yang Wendong added, "Bring the heads of the other business units too. Even if they won't work there regularly, they'll each have an office in the building."
"Understood," Zheng Zhijie replied.
At noon, Yang Wendong, Zheng Zhijie, Wei Zetao, Zheng Yuhua, Qin Zhiye, and others arrived at Des Voeux Road in Central.
Looking up at the towering building in front of him, Yang Wendong remarked, "Liu Baoshan really did understand business—turning the first few floors into a large shopping mall. At this location, retail rental income will definitely outperform office space."
In this era, many office towers had retail spaces on the lower floors, but typically those retail floors were the same size as the upper office floors.
However, the "Liu Chong Hing" Building in front of them had a broader base, maximizing land usage for retail—a forward-thinking model that would eventually become the norm in commercial real estate development.
Zheng Zhijie smiled. "Yes, and now we'll have our very own shopping mall."
Yang Wendong asked, "Did Liu Chong Hing complete the tenant acquisition?"
"Partially, but it's not finished," Zheng Zhijie shook his head. "Liu Liewen mentioned that Lane Crawford wanted to lease the second floor, but they couldn't agree on price.
A few Japanese department store chains also showed interest, but the run on Liu Chong Hing Bank halted everything, and construction stopped. Nothing was finalized."
"In that case, let's hold off for now," Yang Wendong said with a grin. "We'll operate this mall ourselves."
Zheng Zhijie responded, "Mr. Yang Wendong, it's feasible to manage standard retail tenants ourselves, but for department store operations, I'd suggest leasing. It's a specialized business—complex and demanding. Without a large-scale operator, it's difficult to succeed."
"You're absolutely right," Yang Wendong nodded. "But let's wait a bit longer. A property this prime doesn't need to rush into leasing. Even if we wait until the last minute, we'll still have plenty of interest."
That's the charm of a Central location—where all the wealth in Hong Kong ultimately converges. Whether from industry, trade, finance, or shipping, once money wasn't moved offshore, it flowed into real estate—especially into the Central district, which remained the heart of the city.
"Got it," Zheng Zhijie nodded.
"Don't worry, I've got a plan," Yang Wendong said. "Let's head in and take a look."
Since there would be no department store tenants, the alternative was to develop something even better—a supermarket chain.
At this point in history, the supermarket industry was already beginning to scale in North America and Europe. Some of the world's most famous supermarket giants—Walmart, Auchan, Carrefour, Metro—were all founded in the 1960s and 70s.
While Hong Kong's economy wasn't quite on par with Europe and the U.S., Hong Kong Island's per capita spending power was close to Western levels. And the city was developing fast.
If feasible, Yang Wendong planned to launch a supermarket brand himself. And now, he had the right properties.
Of course, this was a volume-based business. Profitability and supply chain bargaining power only came with scale. In the early years, he would have time to learn and refine operations. By the time his capital base was large enough, he could expand quickly.
The only downside? Hong Kong's market was small.
...
The group toured the interior of the building.
"When does construction resume?" Yang Wendong asked.
"In three days," Zheng Zhijie replied. "We're trying to bring back the original workers and technical staff. They're already familiar with the site, and bringing them back should make things smoother.
But because of the previous shutdown during Liu Chong Hing's crisis, many of them took jobs on other sites. Even in three days, we'll only have a partial crew back. It'll take longer to reassemble the full team."
"Alright." Yang Wendong nodded. "For the interiors, we don't need to follow the luxurious bank-style decor they originally planned, but it still needs to be decent—mid-to-upper level.
As for the three retail floors at the base, we can afford to go a little upscale."
"I'll rebid the renovation contract based on the new requirements," Zheng Zhijie said.
"Good. Let's rename the building 'Changxing Tower.' It'll be the future headquarters of our group," Yang Wendong declared.
After three years of hard work in Hong Kong, he finally had a large, high-profile building in the very core of Central—a symbol of status and strength.
"Understood. I'll have it changed right away," Zheng Zhijie said with a smile.
...
With the acquisition of multiple Liu Chong Hing Bank properties, Yang Wendong's strategic vision had come to fruition.
As for the bank itself, he wasn't interested—not yet.
As someone who knew the future, he knew where the most cost-effective investments lay. Even if he were to enter the banking sector, now was not the time.
Even Hang Seng Bank—which would face a run a few years later—was still a stronger option than Liu Chong Hing.
Just then, Zheng Zhijie entered and said, "Mr. Yang Wendong, the government just announced that they're partnering with HSBC and Standard Chartered to inject HK$30 million into Liu Chong Hing Bank and guarantee all deposits. The bank run has immediately eased."
"Probably because a few other banks started seeing small runs as well. The government was afraid of a domino effect," Yang Wendong said. "What did Liu Chong Hing Bank have to give up?"
"Not sure of the full terms, but I've heard most of their branches were sold to HSBC and Standard Chartered," Zheng Zhijie replied.
"As expected," Yang Wendong nodded. "HSBC and Standard Chartered weren't going to help for free."
A few years from now, Hang Seng Bank would face the same crisis. HSBC would use the opportunity to absorb it.
This time, the target wasn't the whole bank—but its branch network.
Yang Wendong had actually been eyeing those properties earlier, but the Liu family had refused to sell. They were willing to part with their future headquarters but not their branches.
The branch network was Liu Chong Hing's lifeblood. The HQ could be rebuilt later. But once the branches were gone, it was over.
"Right. This effectively ends Liu Chong Hing Bank," Zheng Zhijie nodded. "I think the money we gave them, plus what they got from selling other properties, still wasn't enough to stop the run. In the end, they had no choice but to sell out to HSBC and Standard Chartered."
"Let it go. It's none of our concern now," Yang Wendong said, shaking his head. "If Liu Chong Hing survives, we might still work together in the future.
If not, there's nothing more we can do."
The fall of the Liu family marked the end of an era.
If Liu Baoshan had been a bit more cautious, he could have achieved even more than tycoons like Li Ka-shing or Lee Shau Kee.
But there are no 'what-ifs' in this world.
"Agreed," Zheng Zhijie said. Then he asked, "Mr. Yang Wendong, now that Liu Chong Hing Bank is out of the picture, which bank should we focus on working with next?"
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