Bloomberg industry research China real estate index once surged 11%

Bloomberg industry research China real estate index once surged 11%

New World Development Co. is accelerating the sale of its real estate assets in mainland China following an $11 billion refinancing deal in June, according to sources familiar with the matter [1]. The Hong Kong-based developer is planning to sell its property assets in China, including landmarks like its K11 buildings in Hangzhou, Shenzhen, and Shanghai, in a piecemeal fashion. The sales are part of the company's agreement to secure the refinancing deal and are aimed at buyers who can make swift decisions and offer faster cash recovery.

New World faces liquidity stress and is seeking to raise up to $2 billion through a new loan that would be backed by its crown jewel asset, Victoria Dockside in Hong Kong. The firm set a commitment deadline for July 11, but it is common for borrowers to extend such deadlines in the syndicated loan market [1]. The company had HK$50 billion ($6.4 billion) in completed investment properties in mainland China as of December 31, 2024, according to Bloomberg Intelligence.

The real estate market in China is experiencing a downturn and slowing economy, which may cloud New World's prospects for selling its assets. For instance, in Shanghai, the company is seeking 2.85 billion yuan ($397 million) for its K11 tower [1]. The funding environment for troubled and small Hong Kong developers has become increasingly challenging, with banks demanding stricter refinancing terms and more credit enhancements.

Controlled by the family empire of Hong Kong tycoon Henry Cheng, New World has one of the highest debt burdens of any big developer in the city. Its net debt reached 95.5% of shareholders' equity as of December 2024, according to Bloomberg Intelligence. The Cheng clan, worth an estimated $21 billion as of March 2025, proposed a semi-bailout to New World about two years ago, when it offered to take a subsidiary private and give the developer about HK$21.7 billion. The firm reported its first annual loss in 20 years for the 12 months ended June 2024.

Adrian Cheng, the eldest son of the family’s patriarch Henry Cheng, stepped down as chief executive officer soon after the proposal and left the board this month. The Cheng family also owns a stake in Chow Tai Fook Jewellery Group Ltd. Adrian Cheng’s siblings include Sonia Cheng, who looks after the Rosewood Hotel.

The Bloomberg industry research China real estate index once surged 11%, indicating a period of growth and recovery in the sector. However, the current market conditions suggest a more challenging environment for developers like New World.

References:
[1] https://www.bloomberg.com/news/articles/2025-07-09/new-world-seeks-to-sell-china-real-estate-assets-after-loan-deal