Hong Kong’s Billionaire Cheng Family Offloads Shopping Mall For $513 Million

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New World Development sold a shopping mall in the Tsuen Wan district of Hong Kong for HK$4.02 billion ($513 million) as part of its ongoing efforts to sell non-core assets and allay investors’ concerns about its debt load.

New World said in a statement on Friday that it’s selling D-Park, a mall which covers a total area of 630,000 square feet and has 1,000 parking spaces, to Chinachem Group, a privately held real estate developer controlled by the estate of Nina Wang.

High interest rates and falling property prices are ramping up the pressure on Hong Kong’s property players, and New World is among the city’s most indebted developers. The company’s net gearing ratio—measured by net debt divided by total equity—was at 49.9% in December 2023, and it’s aiming to get it down to mid to high 30% by 2027.

New World said a day earlier that it had raised its target for disposing non-core assets in the current financial year to HK$8 billion. Previously, it had been aiming for HK$6 billion. The revised target was revealed as the company released its first-half results that showed its underlying profit had risen 12% to HK$4.87 billion, but the company’s revenue had dropped 25% to HK$17 billion.

As part of its plan to deleverage, New World also said it had bought back HK$10.2 billion in offshore bonds and repaid another HK$9.9 billion in offshore loans. The company also offloaded a majority stake in its infrastructure unit to the Cheng family’s private investment arm Chow Tai Fook Enterprises for about $4.5 billion.

The company’s stock is now trading at a multi-decade low of HK$9.20 a share, after slumping more than 58% over the past year.

New World was founded by the late billionaire Cheng Yu-tung in 1970. Today, his eldest son Henry Cheng serves as the chairman of New World Development as well as Chow Tai Fook Jewellery, the two listed flagship firms that make up the bulk of the family’s $22.1 billion fortune. At least nine family members work in the group’s network of business, including Henry Cheng’s Harvard-educated children Adrian and Sonia.

Henry threw succession plans into question in November, when he said that he was still looking for a successor. Adrian had been widely seen as the heir apparent to his father, but Henry said he’s willing to hire from outside the family to ensure they find someone suitable.

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