Chapter 164: High-End Residential and Cinema Investment
The new year of 1960 arrived in the blink of an eye.
January 6th:
At Changxing Industrial's headquarters, Yang Wendong met with a real estate industry veteran who had been recruited by a headhunting firm.
"Mr. Zheng, nice to meet you," Yang said with a smile, shaking hands with Zheng Zhijie, as introduced by Wei Zetao.
"Mr. Yang, a pleasure," Zheng replied with equal politeness.
"Let's sit." Yang gestured toward the lounge area, then turned to Wei. "Old Wei, you stay and listen too."
"Sure," Wei agreed, grabbing a few bottles of Watson's soda from the side fridge.
Yang asked, "Mr. Zheng, you used to work under Mr. Huo Yingdong?"
"Yes," Zheng nodded. "I'm sure both you and Mr. Wei are familiar with Mr. Huo's situation. His real estate company is going through tough times, and Mr. Huo himself has started shifting heavily into the sand extraction industry."
Yang nodded. He was very familiar with the legacy of Huo Yingdong—the renowned Hong Kong industrialist who would one day be draped in the national flag upon his passing.
Then he asked, "What's your view on the current real estate market in Hong Kong?"
Zheng replied, "Mr. Yang, I've already spent 80% of my assets on down payments for four properties."
"Haha~" Yang laughed. "Why so optimistic?"
"Because of the industrial boom. Hong Kong's industry is growing at an astonishing rate," Zheng explained. "Not just people like you, the Post-it King, but hundreds and thousands of small factories are thriving.
I found some data: in 1958, re-export trade made up 61% of Hong Kong's total exports. By the first half of last year, it had dropped to 52.6%, and the full year likely fell below 50%.
That's because a massive number of Hong Kong factories are now exporting industrial products. This creates jobs, and factory owners are making money. It's only natural they would turn to real estate—that's just human instinct.
And another big factor is population growth. While it's true most of the new arrivals are poor, demand has still increased. That alone drives housing prices up."
"Well analyzed," Yang nodded. "Population and economy—they're the core of real estate."
In his past life, the mainland's property market gradually lost steam after the 2020s. The root cause? Declining birth rates and slowing economic growth.
Zheng smiled. "Mr. Yang summarized it perfectly."
Yang chuckled. "I know the theory, but the practical execution will require experts like you."
"Isn't that exactly why you hired someone like me?" Zheng grinned. "So, Mr. Yang, are there specific areas or sectors you're looking to invest in?"
"Does it make a difference?" Yang countered.
"A bit," Zheng replied. "Different regions and property types involve different stakeholders. Building relationships is essential.
As a new company, it's better to focus on one area at a time. Only the big players with deep connections—mostly British firms—can invest freely across all of Hong Kong."
"Fair enough." Yang nodded. "Where would you suggest we start?"
"If we're talking about several million in investment, and we have banking support, then I'd say Hong Kong Island," Zheng replied confidently.
"Why not Kowloon?" Yang asked.
Zheng shook his head. "Kowloon's fine for long-term holding. For example, if you want to acquire properties and just sit on them for years, it'll work.
But right now, industrial growth is shifting from Hong Kong Island to Kowloon and the New Territories. Population is moving there too. You can see it from the rising electricity demand in China Light & Power's annual reports.
The issue is speed. Most of those moving there are laborers, and they can't afford to buy homes. If we want real estate to turn a quick profit, that's not the place to do it."
Hong Kong has two electricity companies: Hongkong Electric supplies the Island, and China Light & Power covers Kowloon. Electricity consumption is the most direct reflection of economic activity.
"That makes sense," Yang nodded. "In fact, that fits well with what I had in mind—I want to focus on high-end residential projects."
"High-end? Like villas?" Zheng asked.
"No," Yang shook his head. "Not villas. These will be standard high-rise residential towers, just like other developers'.
The difference is, I want to sell fully finished homes—complete interior design and fittings, move-in ready."
He had recently toured several housing developments in Hong Kong, and they were almost all sold as bare concrete shells—just like in the mainland of his past life. Buyers had to renovate on their own, a process most found stressful and costly.
That's when he had the idea. In his previous life, a few high-end brands had started offering "turnkey" homes, and they had been well-received.
Of course, while the concept was good, many developers had ruined it with poor workmanship, leading to reputational damage and customer distrust.
Zheng thought for a moment. "That's doable. The developer doesn't need to handle the finishing themselves—just outsource it to interior contractors.
The only issue is taste. Everyone has their own preferences, and fitting a single style for all buyers could be tricky."
"In theory, yes," Yang said. "But most middle-class buyers don't have much design knowledge.
They usually just copy what they see in other people's homes. If we offer a well-designed model unit, most will be satisfied. At most, they might want to tweak a few details."
"You're not wrong." Zheng nodded.
Yang continued, "So here's the plan. Before we start selling, we build a model unit. Buyers can view it and choose the default layout.
If they want minor adjustments, we record it and modify accordingly—for an extra fee.
If they're still unhappy, we hand over a bare shell. Simple."
Zheng considered it and smiled. "That's a great system—standardize to cut costs while offering flexibility. Mr. Yang, that's brilliant."
"Cutting costs isn't even the main goal," Yang said. "The key is elevating the prestige of the entire development."
Real estate isn't like other goods. Its financial properties are often more important than its residential function. Even people buying homes to live in still care about future value.
And while location is king—and largely unchangeable—boosting the status of the development as a whole is a powerful second lever.
Zheng nodded. "With the right location and full amenities, we could price it much higher than similar properties nearby."
"Exactly," Yang agreed.
Zheng then asked, "But Mr. Yang, even if we succeed with this, it's easy to copy. There's no patent protection like in industrial design."
"Huo Yingdong invented pre-sales, and that wasn't patented either," Yang replied with a grin. "Didn't stop him from becoming a real estate legend in Hong Kong."
In early Hong Kong, properties were sold whole and paid in full. Buyers were typically landlords renting to others.
This made it hard for developers to raise capital, and the real estate sector languished for years—until Huo pioneered the "building flower" (pre-sale) model.
With just 100,000 HKD in capital and bank leverage, he could launch a 2.5 million HKD project and pocket hundreds of thousands—or even millions—in profit.
Other developers quickly followed suit, reaping massive gains and tying banks and real estate together for good.
"True," Zheng said. "Mr. Huo was a natural-born businessman—the sharpest I've seen."
Yang continued, "I can't control what others do, but I can control our brand. We'll do it properly. The finishing quality has to be better than what most owners could manage themselves.
I don't believe other developers—those only out to make a quick buck—can match that."
Everyone likes fast profits. Even in the A-share market in Yang's past life, people dove in knowing it was a gamble.
Even factories that should've focused on long-term value often slashed quality to boost short-term gains.
"If that's your approach, Mr. Yang, you're bound to build a successful real estate brand," Zheng said.
Yang nodded. "Aside from high-end residential, I want to invest in one more type of property—cinemas."
"Cinemas?" Zheng raised his brows. "You've got a radio station and a newspaper—are you planning to enter film too?"
"Maybe later," Yang said with a smile. "For now, I just want to own the venues. If a cinema's up for sale, I'll consider buying it. Or, if there's a good plot of land, we can build one ourselves.
Not just on the Island—some prime spots in Kowloon are worth considering too. There, we'd likely have to build from scratch—just choose dense population centers, like town hubs."
The movie business was promising. While it couldn't rival industry or real estate in profit, it was still part of the media ecosystem.
Before free TV became widespread, cinemas were the public's main window to visual entertainment.
Still, there was no rush. Securing the right properties came first. Owning the venues would put him in a commanding position down the line.
"That won't be difficult. With enough capital, it's far easier than operating a development company," Zheng said.
"Right. Cinema operations won't be your responsibility. I'll find someone else to handle that," Yang said. Then he paused before continuing,
"Mr. Zheng, we've talked for quite a while now. I'd like to formally invite you to join Changxing Real Estate. I'll increase your salary by 50%, and you'll also receive project bonuses—based on market performance, of course."
The real estate industry always offered project bonuses. It motivated managers to perform in good markets and helped control costs in bad ones. A win-win system.
"To work under the Post-it King—Mr. Yang—it would be my honor," Zheng said with a smile. "I'd be glad to join."
"Great," Yang smiled. "Welcome to Changxing Real Estate."
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