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New World Development speeds up sale of noncore assets as disposals top HK$10 billion in financial year

By Daniel Ren

/ SCMP |

June 30, 2020 4:45 PM SGT

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New World Development has sold two noncore assets, pulling in HK$3.57 billion (US$460.6 million) as the developer ploughs ahead with its long-term development strategy of focusing on Hong Kong and the Greater Bay Area.

The developer said in a statement on Monday that the sale of a 45 per cent interest in certain properties at Shun Tak Centre, in Sheung Wan, generated HK$2.36 billion. It also received HK$1.21 billion after selling Eight Kwai Fong, a serviced apartment building in Happy Valley.

"The group has been actively carrying out structural and asset optimisation as part of its long-term core development strategy, disposing of noncore assets and businesses, realising value and improving efficiency," New World said in the statement. "The group is optimistic about Hong Kong and GBA, which will continue to be a core focus of the business."

Following the sales of the two properties, NWD has disposed of noncore assets worth a combined HK$10 billion in its financial year starting July 1, 2019. The Hong Kong listed developer said it would "recycle capital" to develop its core businesses.

The company said it was targeting asset disposals totalling HK$15 billion in the short to medium term, but it did not elaborate.

Hong Kong's property market is facing headwinds from the city's worst recession on record brought by the Covid-19 pandemic, an unceasing US-China trade war and Beijing's plan to pass a controversial national security law.

In May, NWD joined a clutch of Hong Kong developers to bid for a residential site in Ap Lei Chau, in Island South.

The Lands Department said last month that 19 bids had been submitted for the 12,150 sq ft plot. Top developers including Sun Hung Kai Properties, Sino Land and CK Asset Holdings are vying for the land parcel whose market value is estimated to range from HK$770 million to HK$1.6 billion.

New World has 38 per cent of its HK$251 billion worth of fixed assets on the mainland, according to the company's latest annual report.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved.

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