mtl008 Chapter 614 Cornerstone
Chapter 614 Cornerstone
Wu Zhong was originally full of doubts, but at this moment he suddenly felt like he had something stuck in his throat. He looked at Si Xuezhong and finally understood what he meant.
Jiangcheng Department Store was a project that he had his eyes on. Whether it was the geographical location, early negotiations, or cooperation, it was he who pushed forward all of them. It can be said that it was a project that he confirmed personally.
But after all, it is a project worth several hundred million yuan. Although it can be paid in installments, at least one or two hundred million yuan must be invested in the early stage before we can see any results.
The conservatives, led by Xia Fuqiang, unanimously believed that 200 million yuan in cash was enough to leverage two new projects, and that the returns would be quick. In the short term, the value and revenue created would be similar to that of a department store.
Moreover, the risks of commercial real estate are much greater than those of residential real estate. Even the Si Group, which started out by relying on commercial real estate, has begun to transform into residential real estate in recent years and has abandoned many projects such as hotels, shopping malls, and office buildings.
But Wu Zhong believes that these business projects are the real cornerstone of the Si Group.
If a residential project loses money, it really loses money. In order to acquire new land and build new buildings, they must transfer funds and continue to start the next project without stopping.
However, commercial real estate projects can share risks and are high-quality projects that require a one-time investment and can continuously generate cash flow.
In addition, the most important thing is that it can enhance the trademark value of the Si Group. A Huarong Plaza in the city center is more useful than ten thousand advertisements, because of a Huarong Plaza, many people choose to buy houses from the Si Group.
Just say to those worried consumers during promotion: Have you seen Huarong Plaza? We are a developer, a company.
People are always confident about things that they are familiar with.
This is also one of the reasons why many small developers cannot compete with large developers. Sometimes, if you want to make a name for yourself, in addition to word-of-mouth publicity, the most important thing is to put your products in front of customers.
Wu Zhong knew clearly that if the Si Group wanted to expand beyond Dongjiang Province and no longer be limited to the local area, the most important thing was to increase its visibility!
Rely on word of mouth?
There is only one residential area with 1,800 houses. Even if they are good enough, not everyone can buy one.
But as long as the Si Group does a good job in commercial real estate, even if it does not make money or even makes a slight loss, as long as the commercial real estate is used as a supporting facility and the reputation of the residential buildings is promoted, every customer who comes to the mall to shop may become a potential customer for buying a house owned by the Si Group.
Low-level marketing is all about lavish force and spending money like crazy.
Real marketing is as subtle as boiling a frog in warm water.
But now, Si Xuezhong has spent so much effort just to make him give up bidding for the Jiangcheng Department Store project?
"Director Si, why on earth?"
Wu Zhong looked at Si Xue Zhong, feeling extremely depressed.
It was clearly decided at the meeting, so why is Si Xuezhong going back on his word now?
Si Xuezhong smiled bitterly: "I did prepare some arguments, but I think these may not be able to convince you, so I plan to tell you the truth. I just learned about this news not long ago. Otherwise, I would not have agreed to your opinion of investing in Jiangcheng Department Store at the meeting."
Wu Zhong looked at Si Xue Zhong without saying anything, but he also wanted to know what the reason was that made Si Xue Zhong give up investing in Jiangcheng Department Store.
Si Xuezhong leaned back on the sofa and said, "Hanhai Group, a newly established company in Jiangcheng City, has decided to invest in Jiangcheng Department Store. The price they can offer is at least 30% of our current price."
"Do you think this reason is enough?"
Wu Zhong smiled bitterly and said, "It's enough, but not sufficient. Song Qianqiu wants to rebuild the Jiangcheng Department Store and proposed to buy the land as a stake, which shows that he doesn't absolutely value the price offered."
"Hanhai Group's price is 30% higher than ours, which means it is at least 100 million. But I think, considering other factors, Song Qianqiu may not choose Hanhai Group."
"In Jiangcheng City, no one knows better than us how to build and operate a large shopping mall. Huarong Plaza opposite the department store is the best proof!"
"If Song Qianqiu is pursuing long-term benefits, we can clearly state our competitive advantages in the bid and guarantee the estimated profits we can provide him every year. If he is looking for fame, we can change the name of the department store to Ronghua Group."
“There are many things we can do, but the worst thing we can do is to give up before even participating in the bidding!”
Si Xuezhong smiled bitterly. He had been attracted by Wu Zhong's unwillingness to admit defeat. However, he still refused to admit defeat when he should have, and now he suffered the consequences.
In desperation, Si Xuezhong could only tell the truth.
"As you said, if the price is only 30% higher, I admit that we do have a chance."
"But what if there's another reason besides this?"
Wu Zhong looked at Si Xue Zhong and remained silent.
Si Xuezhong smiled bitterly and said, "Song Qianqiu doesn't want to sell the land of the department store at all. He is playing a double game with himself!"
Wu Zhong didn't quite understand what Si Xuezhong meant.
"collaborate with each other?"
Si Xuezhong said: "Song Qianqiu organized a bidding ceremony himself and made the whole city know that the department store was going to be put up for bidding. In the end, the land will return to him, but because of everyone's competition, the land price has soared, and he is the one who reaps the benefits."
Wu Zhong frowned.
"Then why did he do this?"
"There is no reason at all!"
"If he really did this, he would have offended the entire Jiangcheng City, and even the real estate industry in Dongjiang Province. From now on, who would dare to cooperate with him?"
Si Xuezhong sighed, "Several of Lao Song's projects have not progressed smoothly. He even chose to stop construction of one building rather than continue. He does have some money, but even if he builds another building, the reputation of the previous one has already been ruined. Can he make the money back?"
"The land of the department store is his last hope. He did this just to raise the value of the land."
Wu Zhong spread his hands: "But this piece of land is valuable to begin with. It doesn't need Song Qianqiu to do this. It is still valuable."
Si Xuezhong sneered.
"Being valuable and having someone offer a price for it are two different things!"
“Doesn’t the Land Bureau know that the land they hold is valuable?”
"Of course I know, but why don't you just sell it at a flat price, but instead use an auction to bid?"
"Do you think Song Qianqiu is stupid? If he sells this piece of land separately and mortgages it, it will be worth at most 200 to 300 million yuan. Now that he has done this, the price has increased a lot. When he mortgages it again, do you think the bank's appraisal price will go up?"