A century-old wealthy family that rose from Shanghai

Chen Guangliang and his wife returned to Hong Kong in August 1949.

This was on the eve of the Guangdong Provincial Government's annexation, and a large amount of funds flowed into Hong Kong; on August 11 alone, 20,000 taels of gold flowed into Hong Kong and Macau, and within a week, it had reached 50,000 to 60,000 taels.

Under these circumstances, gold at the Hong Kong Gold and Silver Exchange was also driven up to HK$600.

Of course, it only reached a high of HK$600 per tael. Firstly, Chen Guangliang had already cashed out 18 taels of gold, which severely suppressed the price of gold in Hong Kong; secondly, since July, gold has been '7 gold', so this price of HK$600 is considered relatively high.

"Boss, all your personal funds have been converted into US dollars. Should we also convert some of the funds in Ping An Bank into US dollar reserves?" Ye Ximing asked as he walked into Chen Guangliang's office.

The boss converted all the funds into US dollars, which suggests only two possibilities: First, the boss is ready to flee at any time, since the PLA might invade; second, the Hong Kong dollar and the British pound are about to depreciate.

The second possibility is more likely, because the boss has been planning in Hong Kong for so long, it's impossible that he didn't foresee this day.

Chen Guangliang said, "Okay, in addition to converting our own funds into US dollars, we should also convert a small amount of our savings into US dollars, just in case."

"Okay, I'll make arrangements right away!"

Over the years, Ping An Bank has made some money, but its total investment in the headquarters building on Garden Road in Central was HK$800 million. In addition, the investment in the reconstruction and renovation of its industrial sites after the war has reached tens of millions of Hong Kong dollars.

However, Ping An Bank is also very profitable. First, its loan-to-deposit ratio is as high as 90%, thanks to the US dollar/gold guarantee from the Chen Guangliang family. Second, Ping An Bank's real estate trust department owns a large number of factories and warehouses, which can generate substantial rental income every year. The Ping An Bank Building is also rented out, generating considerable rental income. Finally, Ping An Bank has also participated in a small amount of gold investment, earning millions of yuan in profits.

Ping An Bank now boasts assets of around HK$4000 million, a figure unmatched by other commercial banks in Hong Kong, including Bank of East Asia, whose assets are less than half of its total assets.

For example, if Ping An Bank exchanges 300 million US dollars, and the British pound depreciates, Ping An Bank will earn two to three million Hong Kong dollars, which is equivalent to a year's profit from Ping An Bank's 'deposit and loan business'.

After Ye Ximing left, Chen Guangliang was still pondering the development of Ping An Bank:

Firstly, Ping An Bank's 'cooperative relationship' with Hong Kong's industry and commerce, especially factory owners, established after the war, had already put Ping An Bank's 'deposit and loan business' ahead of all Chinese-owned banks. In the 1950s, it could even influence and threaten HSBC's retail banking business.

Secondly, Ping An Bank's real estate trust department owns two buildings in Central, Hong Kong, as well as factories and warehouses totaling over one million square feet (covering an area of ​​70 square feet, all located in prime locations in Hong Kong Island and Kowloon).

Deposit and loan business, real estate trust business, and investment business.
"Yes, Ping An Bank wants to hold shares in potential stocks in the Hong Kong stock market for long-term investment, which will also lay the foundation for future acquisitions."

Soon, Chen Guangliang decided to establish a 'Securities Investment and Trust Department' at Ping An Bank, and subsequently divided Ping An Bank's business into 'Commercial Bank' and 'Investment Bank'.

"Moreover, Ping An Bank's real estate trust department and securities trust department also need to expand overseas and invest in commercial real estate and high-quality stocks."

"Hong Kong is still too small!"

Chen Guangliang could only sigh that his current level of wealth was already too high. He had been accumulating wealth since the 1930s, and the war had had very little impact on his wealth. In fact, he was still making money during the war, so he was now a true 'cash flow tycoon'.

On this day, Chan Kwong-leung dined at the Luk Kwok Restaurant in Wan Chai with his two wives. The family was very at ease, so they continued to live a comfortable life as usual.

This hotel, established in 1933, rivals the "Six Nations Hotel" in Beiping. As Hong Kong's first Chinese restaurant hotel, it is beloved by the Chinese community.

During the meal, Yan Renmei said, "I really miss the Shangri-La Hotel back then. Even after so many years, I haven't seen anything better than it. The afternoon tea on the fourth floor, the Western restaurant and bar on the third floor, the private rooms and buffet on the second floor, the ballroom and dining hall on the first floor, and an eight-story residential hotel."

Jiang Meiying also said, "Yes, back then, the Shangri-La Hotel was as famous as the Cathay Hotel in Shanghai. One was Chinese and the other was Western, and they were very popular in Shanghai. Unlike now, we have to eat at other people's hotels."

Chen Guangliang was also reminded of his past. Back then, he often stayed at the Shangri-La Hotel, surrounded by beautiful women. He could take turns dancing with them, such as Kong Lingyi and Zhang Hanfen. He could dance with them at will, and even Sheng Qi would dance with him. Yan Renmei would never be jealous.

"It's just a hotel, we can just open another Shangri-La hotel in Hong Kong!"

"Really?"

Both women were pleasantly surprised.

Chen Guangliang laughed and said, "The main problem here in Hong Kong is the scarcity of land. Investing in a hotel is a piece of cake for our family. I've recently made a note of this and will see where there's suitable land."

"Um"

In his mind, he had already formed a network map of Hong Kong's map and territory, and he was already considering it.

In Kowloon, only the Wharf Holdings and Blue Chimney in Tsim Sha Tsui are suitable for building first-class hotels, but Hong Kong shipping is currently very busy, and Jardine Matheson and Swire are unlikely to sell these two docks. Even Swire's Blue Chimney (later known as the New World Centre) is something Swire is unlikely to relinquish.

As for Tsim Sha Tsui East in Kowloon, it was still sea at that time, and the Hong Kong government would not reclaim it until the early 1970s, so it was impossible.

This left him with only Hong Kong Island as an option; apart from Central, Chen Guangliang didn't consider other places.

Therefore, only Central remains as an option!

There are plots of land in Central, but they are all very small, only big enough to build a skyscraper hotel like the 'Mandarin Oriental Hotel' of later generations.

In the short term, it was about getting ahead of the Mandarin Oriental Hotel (early 60s) and the Hilton Hotel (early 60s) by establishing a five-star building hotel in Central.

At that time, there were indeed luxury hotels in Central, Hong Kong, namely the predecessor of the Mandarin Oriental Hotel – the Gloucester Hotel, and the Hong Kong Hotel.

Chen Guangliang visited a plot of land in the mezzanine area between Des Voeux Road Central and Conduit Road, preparing to build the 'Shangri-La Hotel'.

Now that the JF army is about to advance directly into Guangdong Province, the atmosphere in Hong Kong is becoming tense. It is precisely at times like these that it is easier to negotiate for prime land.

“Boss, this plot of land, 75-77 Des Voeux Road Central, belongs to the Ho Tung family and covers approximately 1.6 square feet. The adjacent plot, 71-74 Des Voeux Road Central, covers 1.9 square feet and belongs to the British-owned Donald & Co., one of the four major trading companies in Hong Kong in its early days, but it has since declined.” Yan Kuan, deputy general manager of Cheung Kong Properties, introduced the plot to Chen Guangliang.

In fact, these two plots of land later became the Ying Shih Building and the Wing On Group Building (Federal Building). The land for the Ying Shih Building was sold by the Ho Tung family to Hang Seng Bank for HK$550 million around 1959 to serve as its 'first-generation headquarters'; as for the Wing On Group Building, its predecessor was the 31-story building that was built in the early 60s by the Cheung Yuk Leung family, which was then the tallest building in Hong Kong.

Chen Guangliang mentally assessed the possibility of acquiring the two plots of land.

First, there's the 1.6 square foot plot of land in He Dong's possession. He Dong and Chen Guangliang are old acquaintances. Although it's suspected of "stealing someone else's property," it's not a big problem.

As for the land owned by the Donald & Co., that's not a problem at all; it's simply a matter of money.

At this time, land in Central, Hong Kong, was only a few hundred Hong Kong dollars per square foot, and the price increase in the next ten years would not be significant; after all, in 1959, the Ho Tung family sold 77 Des Voeux Road for only HK$550 million, which was equivalent to HK$350 per square foot.

When he purchased the Garden Road site, Chan Kwong-leung had already spent nearly HK$300 per square foot.

In other words, land and property prices in Hong Kong have seen limited increases over the past decade, as Hong Kong's economy was still in its infancy during this period. "If the two plots of land were combined, they would total 3.5 square feet, which is a pretty good size!"

"It's not just good, it's a very large area. Hong Kong is not like Shanghai, where there is limited land available for development."

Once upon a time, business owners in Shanghai would buy land in large quantities, sometimes dozens of acres at a time. The most expensive piece of land was, of course, the 60-acre plot of land belonging to the "Dahua Hotel" on Nanjing West Road.

The two plots of land on Des Voeux Road together amount to less than 6 acres.

Chen Guangliang took a look and found that if the two plots of land were combined, they would still be located in a prime coastal area.

At this time, Connaught Road was already a waterfront road. The site of the later "Trading Centre" and "International Finance Centre" had not yet been reclaimed from the sea. It is estimated that the Central Reclamation Project was carried out in the 1950s and 1960s.

"Okay, let's go take a look at Big Street again!"

"Ok"

Chen Guangliang walked through Central, Hong Kong, surveying the scene. To put it bluntly, even the power of Jardine Matheson and Swire Group was no match for him.

However, Chen Guangliang did not want to make a big fuss, after all, he also had to consider the characteristics of the times and political factors!

Upon arriving at the intersection of Pierre Street and Queen's Road Central, Chen Guangliang, Yan Kuan, and others stopped at the 'Hong Kong Grand Hotel'.

"The Hong Kong Hotel, belonging to The Hongkong and Shanghai Hotels, is a property of the Kadoorie family. This is Gloucester Tower, belonging to Hongkong Land; this is Lane Crawford Tower, belonging to Lane Crawford Department Store."

Chen Guangliang nodded; he naturally knew all of this.

The Hong Kong Hotel, in its previous life, was bought by the "Shipping Magnate" Hui Oi-chow in the mid-1950s and transformed into the famous "Doctors' Building," the Chung Kin Building. This building has 17 floors, each with 14500 square feet.

The Hong Kong Hotel occupies only 1.8 square feet of land. If it were used to build the Shangri-La Hotel, the site would be much smaller. Moreover, it is next to the Gloucester Tower, which will be redeveloped into Landmark and the 37-story Gloucester Tower (using the Jardine House across the street to replace Lane Crawford Tower).
Chan Kwong-leung's original idea was to buy the Hong Kong Hotel owned by the Kadoorie family, because the hotel itself had a great connection with the Chinese community. It was once the property of Zhao Lianbi, the governor of the Republic of China, and the apparent owner belonged to the Hung Hing gang. Later, the Hong Kong government listed Hung Hing as a gang, and the property was gradually transferred to the Hong Kong and Shanghai Hotel.

Buying the Hong Kong Hotel wasn't enough, given its 1.8 square feet footprint. So Chan Kwong-leung also wanted to buy Lane Crawford Building and merge it with the hotel.

In this way, there will be no more "Landmark Plaza" in this area. Instead, Chen Guangliang can build a comprehensive commercial complex that includes a "shopping plaza" and a "five-star hotel".

Of course, all things considered, Chen Guangliang still preferred to merge the sites at Nos. 71-77 Des Voeux Road Central.

On this day, Chen Guangliang visited Hong Kong tycoon Ho Tung.

Without wasting any words, he directly expressed his desire to purchase the property at 74-77 Des Voeux Road.

Ho Tung owned numerous properties, including the Tung Ying Building in Tsim Sha Tsui (which Joseph Lau later developed into THE ONE), several prime properties on Nathan Road, and the Tung Hing Building in Mong Kok. He possessed a vast portfolio of prime properties in Kowloon. On Hong Kong Island, Ho Tung also owned 77 Des Voeux Road Central, a property in Central Market (which he later gifted to the Hong Kong government), and many properties in Wan Chai—which were later developed into large properties such as Tung Sang, Tung Shing, and Shing Yip.

He was Hong Kong's richest man and the 'largest' private landowner until Chan Kwong-leung landed in Hong Kong.

However, almost all of Chan Kwong-leung's properties are residential, with only two commercial sites—the Ping An Bank Building on Des Voeux Road Central and the New Ping An Bank Building at 1 Garden Road.

Ho Tung said with a smile, "Mr. Chan already owns so many properties, yet he's still not satisfied. Now he's set his sights on my most expensive property in Hong Kong!"

Chen Guangliang said sincerely, "If it weren't for wanting to rebuild the Shangri-La Hotel, I wouldn't want to take away what others cherish."

With this piece of land in Ho Tung's hands, all he does is collect rent and pass it down through generations.

But in Chen Guangliang's hands, it was to be built into a first-class luxury hotel in Hong Kong, with a much greater purpose.

He Dong understood this as well, and said, "It's not that it can't be sold, it's just that the price is not low!"

Chen Guangliang said, "Mr. He, please feel free to speak."

Since he took the initiative to come to us to buy, he wouldn't be stingy.

After a moment of contemplation, Ho Tung said, “Back then, the Shangri-La Hotel was all the rage in Shanghai, and I was a regular there. Now that Mr. Chen wants to rebuild it, I naturally support him. However, this piece of land is the most expensive one I own, so the price will be around HK$250 per square foot. You can buy it for HK$400 million.”

Historically, when the plot of land at No. 1 Garden Road was auctioned in 1947, the price was also HK$257 per square foot. This time, when Chan Kwong-leung bid for it, the price was raised to nearly HK$300 per square foot.

Both sites have their advantages, and the prices are similar.

He Dong's offer wasn't expensive!

Chen Guangliang readily agreed, "Okay, this price is already considered a friend's price, I'm very satisfied!"

He wouldn't even blink if the price was in line with market value.

After the negotiations with Ho Tung were completed, the matter of the Donald & Co. land became much easier to resolve. This was because the current situation was causing some trading companies to consider leaving Hong Kong.

However, the two plots of land together would probably cost more than HK$900 million. If construction and decoration costs are added, the investment in this hotel would be the largest in Hong Kong, a truly astonishing investment.

Of course, even if he acquires the land, Chen Guangliang cannot start construction immediately; he needs to plan it out properly first.

1949年9月18日，英国政府宣布英镑贬值30.5%，由英镑兑换4.03美元贬至2.8美元。

Previously, Chen Guangliang had negotiated two plots of land on Des Voeux Road Central—numbers 71-74 and 75-77—and subsequently signed formal contracts.

It's not that we need to wait for the pound to depreciate, since Chen Guangliang can borrow Hong Kong dollars from his Hong Kong dollar deposits at Ping An Bank, so it won't have any impact. The reason for waiting until September 18th to sign the contract is that after reaching an agreement with Donald & Co., we will sign the contract for both plots of land together. Otherwise, if we only negotiate for one plot of land, it won't be of much use in the short term.

The 1.9 square feet plot of land owned by Donald & Co. cost HK$500 million. Combined with the plot owned by the Ho Tung family, the total cost to Chan Kwong-leung was a full HK$900 million.

This is a huge sum, and it would be difficult for anyone in Hong Kong to come up with it all at once. The Chan family simply took out US$160 million (approximately 1 US dollar = 5.7 Hong Kong dollars) and bought the two plots of land; originally, it would have cost about US$230 million.

Moreover, since the Chen Guangliang family's cash flow is mostly converted into US dollars, this is equivalent to earning tens of millions of Hong Kong dollars in wealth.

So, let alone investing in a single 'super luxury hotel,' investing in several, or even just buying an entire street in Hong Kong, would be enough. (End of Chapter)