"Oriental Plaza" is located in the center of Beijing, at No.1 East Chang 'an Avenue, and every friend who works in Beijing's Second Ring Road should be familiar with it. In the last article, the author talked about the land tenure of "Beijing Oriental Plaza" and Li Ka-shing's buyout of domestic partners' income rights. This article talks in detail about "how Li Ka-shing reduced and sold Beijing Oriental Plaza" and why he did it.

First of all, it is said that Beijing Oriental Plaza belongs to Li Ka-shing, but now the investment of "Oriental Plaza" cannot be found in the enterprise directly controlled by Li Ka-shing and his sons.

In fact, the land use right and house ownership of Beijing Oriental Plaza belong to a domestic enterprise named Beijing Oriental Plaza Co., Ltd., and since 211, a company named Hong Kong Huixian Investment has held 1% shares of Beijing Oriental Plaza Co., Ltd.

Hong Kong Huixian Investment Co., Ltd. is indirectly held by Huixian Industrial Trust through the offshore company Hui Xian BVI. Through the penetration of equity, we find that the income right of Oriental Plaza now finally falls into the hands of Huixian Industrial Trust. So, what is the relationship between Huixian Industrial Trust and Li Ka-shing?

Looking through the history of the trust, before 211, Li Ka-shing's family business Cheung Kong Industrial Group was the controlling party of the predecessor of the trust, and the core asset of the trust was Beijing Oriental Plaza, which was separately split and listed on April 29, 211, and the shareholding ratio of Li Ka-shing Cheung Kong Industrial Group in Huixian also dropped significantly.

By the end of December 22, the shareholding ratio of Li Ka-shing Changjiang Industrial Group in Huixian Industrial Trust (the parent company of Oriental Plaza) has dropped to 32.49%, which also means that the Li Ka-shing family's shareholding in Beijing Oriental Plaza is only less than 1/3, and the so-called "killing and not selling" is just a rumor.

When Huixian Industrial Trust went public in 211, Gan Qinglin, the chairman of Beijing Oriental Plaza Co., Ltd., said that the proceeds from this listing were mainly returned to the original shareholders of Oriental Plaza, so it did not actually involve Huixian's remittance of overseas fund-raising funds into China. These words gently tell the outside world that this listing is actually a disguised reduction of Oriental Plaza by the original shareholders.

after consulting the interim financial report of Huixian Industrial Trust in 211, we found that Huixian repaid about 11.77 billion yuan to fund unit holders after listing. After the original shareholders such as Changjiang Industry in Li Ka-shing got the repayment, they actually realized the "capital withdrawal" from the Oriental Plaza project.

Then, the question comes. Beijing Oriental Plaza is located in the out-of-print section of the capital with "No.1 East Chang 'an Avenue". Why did the Li Ka-shing family split it up and reduce its holdings? This has to start with the asset valuation of Oriental Plaza.

with a total construction area of 8, square meters, Oriental Plaza is mainly composed of four parts, namely, Oriental Xintiandi Shopping Mall, 8 Grade A office buildings, two Oriental Haoting apartments and five-star Grand Hyatt Oriental Hotel. According to the financial report of Huixian Industrial Trust, the parent company of Oriental Plaza, the valuation of the whole Oriental Plaza is as follows:

From the valuation chart, we find that the office building with a building area of 31, square meters in the second ring road of the capital is only valued at 14.9 billion yuan, equivalent to a unit price of only 48,3 yuan, and the unit price of Oriental Haoting Apartment is only 26,9 yuan, which obviously seriously underestimates the value of Oriental Plaza.

why is the management's valuation of Oriental Plaza so conservative? The reason still lies in the land tenure and overseas operation right of Oriental Plaza, with only 2 or 3 years left.

according to gan Qinglin, the chairman of oriental plaza, in 211, "the current asset valuation made by listing has fully considered relevant factors." The land tenure of Beijing Oriental Plaza expires in April, 249, and Huixian's right to operate the Oriental Plaza expires in January, 249. Gan Qinglin's original words are "whether it will be extended (renewed) by then (249) is still unclear".

No one can say exactly what will happen decades later. It is precisely because of this uncertainty that the value of Oriental Plaza held by Huixian Industrial Trust will be greatly reduced. Perhaps it is also for this reason that Li Ka-shing and other original shareholders packaged and listed the assets of Oriental Plaza in advance.

Today, although Oriental Plaza is still operated by Li Ka-shing family, it has been spun off from Changjiang Industrial Group, and its shareholding in Huixian Industrial Trust, the parent company of Oriental Plaza, is only 32.49%. Excluding the year 22 affected by the epidemic, the dividend it received from Huixian Industrial Trust in the past was about 5 million yuan per year, and Oriental Plaza is insignificant to Li Ka-shing family.

The Oriental Plaza, which "kills and doesn't sell", is finally drifting away from the Li Ka-shing family.