Hong Kong developer New World gets nod to spin off K11 Shanghai assets
New World Development (NWD) received the green light from the Shanghai Stock Exchange to spin off and list a Reit (real estate investment trust) on the bourse, according to the distressed developer controlled by one of Hong Kong’s wealthiest families. The expected offering size for the NWD C-Reit was about 3.82 billion yuan (US$570 million), from which the group’s estimated net proceeds would be…
Shanghai Stock Exchange granted New World Development (NWD) permission to spin off and list a real estate investment trust (C-Reit) comprising assets of the K11 Art Mall and K11 Atelier New World Tower in Shanghai. The expected offering size is 3.82 billion yuan (US$570 million), generating estimated net proceeds of 3.24 billion yuan for NWD.
The K11 assets, located in Shanghai’s Huangpu district, span 130,384 square meters (1.4 million square feet) and are under NWD's direct ownership. After the spin-off, NWD will continue operating the assets under the K11 brand. Echo Huang, NWD's CEO, stated that the C-Reit marks the first of its kind among Hong Kong enterprises and highlights the strong brand equity of NWD and K11 in the mainland market.
The spin-off aims to provide new capital access for the group and unlock asset value, redirecting resources to future growth projects. Analyst Jeff Zhang of Morningstar sees the spin-off as a prudent move to recycle capital for value-creating projects, with minimal impact on NWD's equity valuation. NWD's net loss narrowed 44% year-on-year in the first half of the financial year, but net debt rose to HK$122.7 billion, increasing the gearing ratio to 59.7%. The developer is set to report its annual results on September 30.
Written by urgent.news from SCMP Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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