GuShiio.com ① The Cheng Yu-tung family, one of the four major giants in Hong Kong, is under New World Development, which is selling assets and selling properties at discounts to relieve financial pressure.
② The reporter learned that New World Development plans to sell a Grade A office building in Hangzhou with a market value of approximately RMB 1 billion.
Financial Union, March 3 (Reporter Li Jie)The Cheng Yu-tung family, one of Hong Kong’s four largest families, and its New World Development (00017.HK) is easing financial pressure by selling assets and selling properties at discounts.
The reporter learned that New World Development plans to sell a Grade A office building in Hangzhou with a market value of about 1 billion yuan.
“The company has been promoting asset optimization and financial management. Among them, the second phase of the New World Urban Art Center in Hangzhou recently completed the main ceiling. According to the plan, the office buildings and some commercial properties in the first phase of the project can be sold to the public. The market value of the office building Yishan in the project is approximately RMB 1 billion.” New World Development told reporters.
Regarding the issue of whether the office building is planned to be sold as a whole or in bulk, New World Development is not clear. It only stated that “the company will adjust its sales strategy based on market changes.”
It is reported that the New World Urban Art Center is a project acquired by New World Development in Hangzhou in 2019, with a total investment of 23 billion yuan. The project integrates multiple business formats such as shopping centers, office buildings, high-end hotels, apartments and international-class residential communities. Among them, the residential part of the project has been delivered, with cumulative sales exceeding 11 billion yuan; the office buildings and commercial streets will be delivered one after another starting from June 2025 and are expected to be fully completed by the end of 2025.
An analyst said that New World’s sale of Hangzhou assets may be related to the debt repayment pressure faced by New World’s development, and it urgently needs to withdraw funds.
New World Development is one of Hong Kong’s established real estate developers, with businesses covering multiple areas including residential, commercial and hotel. However, since the New World Development suffered losses for the first time in 20 years in 2024, its actual solvency has become a focus of market attention.
According to the 2025 fiscal year (June 30-December 31, 2024) results report released by New World Development on February 28, in the first half of the fiscal year, the group’s total debt was HK$146.4 billion, a decrease of 3.4% from the end of June last year; Short-term debt was HK$32.2 billion, a decrease of HK$9.4 billion from June last year. In terms of net debt ratio, due to the impact of impairment of investment properties, it increased by 2.5 percentage points to 57.5%.
In terms of funds, as at December 31, 2024, New World’s total available funds were approximately HK$34 billion, including cash and bank balances of approximately HK$22 billion and available bank loans of approximately HK$12 billion.
Bank of America Securities released a report saying that although New World management lowered its capital expenditure guidance for fiscal year 2025 from HK$15 billion to HK$13 billion, it is still expected to experience a slight cash flow gap of HK$1 billion for the whole year.
The financial report shows that during the reporting period, New World Development’s revenue was HK$16.79 billion, a year-on-year decrease of 1.6%; core operating profit was HK$4.416 billion, and loss attributable to shareholders was HK$6.633 billion.
“Although New World’s development performance is better than market expectations, considering high interest costs and deleveraging pressure, it is expected to face basic net losses in the next three years, which reflects that New World Development still faces certain financial and operational challenges.” Bank of America Securities said in a research report.
Faced with challenges, Huang Shaomei, the new chief executive of New World Development, said at the performance meeting that the group will implement seven measures to reduce debt, including actively selling development projects, actively selling non-core assets, releasing the value of farmland, increasing rental returns, streamlining costs, suspending dividends, and proactive financial management.
In fact, New World Development has sold a number of assets last year. On November 28, 2024, New World Development announced that the company would sell Hong Kong Kai Tak Sports Park to Chow Tai Fook for HK$417 million; On December 11, 2024, media reported that New World Development sold the Artisan Lab industrial building located in San Po Kong, Kowloon, Hong Kong for HK$620 million; On December 24, 2024, New World Development sold the Artisan Hub, an industrial building located in San Po Kong, Kowloon, Hong Kong for HK$367 million.
New World Development management stated that the company will continue to sell non-core assets in the second half of fiscal year 2025 to speed up the group’s capital withdrawal, but only at a suitable price will it consider selling. It is reported that K11 Art Mall is on the sale list. Previously, there was market news that New World hopes to sell the project for HK$9 billion.
While selling assets, New World Development also plans to raise funds by mortgaging assets. Some media reported on February 14 that New World Development Company Limited has selected Bank of China, DBS Bank and HSBC to refinance its HK$58.1 billion loan that will mature this year and next, with more than 20 properties worth US$15 billion.
Prior to this, according to New World Development’s announcement on January 23, from July 2024 to the announcement date, New World Development Co., Ltd. has successfully completed the refinancing of existing bank loans of approximately HK$17.761 billion.
Regarding this year’s full-year sales target, New World Development said that in order to avoid market speculation caused by the previous separate disclosure of NCD (non-core assets) progress, the company decided to combine the disclosure of NCD and DP (properties under development) contract sales in the future. New World Development The 2025 contract sales target is HK$26 billion.
The follow-up trend of the development of the new world remains to be seen.
