New World Development gets Shanghai bourse nod for $570 million REIT listing

Hong Kong-based property developer New World Development has secured approval from the Shanghai Stock Exchange for the listing of its real estate investment trust (REIT) for a projected offering size of 3.82 billion yuan, equivalent to US$570.36 million. The company plans to retain a 20% stake in the REIT, with external investors accounting for the remaining 80%, amounting to an aggregate 3.05 billion yuan.

In connection with the transaction, New World Development will transfer the holding company of Shanghai Hong Kong New World Tower to the newly listed REIT for a price of 4.01 billion yuan. The developer anticipates generating net proceeds of 3.24 billion yuan from the asset sale and its purchase of a 20% stake in the REIT.

The REIT listing is part of New World's strategy to refinance debt and improve liquidity in the face of a challenging property sector in Hong Kong. Earlier this year, Blackstone abandoned a proposed US$4 billion partnership with New World after the property developer declined to relinquish control, according to Bloomberg News.