Billionaire Cheng family's New World Development terminates Hong Kong airport mall project, booking $2.3B losses

The billionaire-owned Cheng family's New World Development has called off its $2.3B New World Mall project at Hong Kong's airport, resulting in significant financial losses. The company announced on Wednesday that it will cede control of the 11 SKIES shopping mall project to the airport on April 1, 2027, and will provide services worth up to HK$1.1 billion without charge.

The termination of the project led to a net loss of HK$18.3 billion for the company, up from HK$16.3 billion in the previous year. Among these losses, HK$14.7 billion was due to impairment losses and HK$2.3 billion in early termination charges. For the fiscal year ending June, New World's net loss rose to HK$28.1 billion, compared to HK$16.3 billion in the prior year.

However, after excluding non-cash losses, the company reported a core profit of HK$2.2 billion, marking its first profit in three years. New World Development CEO Echo Huang stated that the termination of the 11 SKIES charges was a major hurdle that has been overcome, and that cash flow should see a significant improvement in the first half of fiscal 2026/27.

Amid tight credit conditions and a weak property market, the property developer, which is heavily indebted among its local peers, has been striving to reduce its debt, dispose of assets, and bolster liquidity. To further alleviate its cash crunch, New World Development has expanded its loan facility by approximately HK$1 billion, increasing it to HK$4.9 billion from HK$3.95 billion committed in June.