- Adrian Chang is seeking to sell the K11 Art Mall!
- NWD is one of the Hong Kong’s most indebted property developers.
- The K11 Group also laid off the creative team and cut 20 other jobs.
Adrian Cheng, a prominent figure in Hong Kong and executive vice chairman of New World Development (NWD) is seeking to sell the K11 Art Mall, a flagship project of his K11 brand. As per reports, Cheng’s company has been offered HK $9 billion by CR Longdation, a subsidiary of the state owned China resources conglomerate. The mall which is loacted on Hanoi road in Tsim Sha Tsui has been a flagship venture for K11 since it opened in 2009.
While NWD and CR Longdation haven’t confirmed these reports, the potential sale comes as NWD faces financial difficulties. The company has warned of a potential loss of HK$19 billion to HK$20 billion for the fiscal year ending in June. The shortfall is attributed to factors like revenue recognition problems, rising interest rates and currency depreciation. Final results are set to release in September.
NWD is one of the Hong Kong’s most indebted property developers, with a net gearing ratio of 49.9 percent in December. The company is aiming to lower this ratio to 40 percent or less by 2027. It has repaid HK$35 billion in debt in the first half of the year and plans to repay over HK$16 billion in the coming months. The company’s stock price has dropped to its lowest point ever since 2003 which has further reduced its market value to HK$19.76 billion. As per reports, the K11 Group also laid off the creative team and cut 20 other jobs.
Adrian Cheng, the grandson of late business tycoon Cheng Yu-Tung, is a well known figure for his work in art and business. His K11 mall has expanded the Art Mall to include in several locations in China such as K11 Musea in Hong Kong and the upcoming K11 ECOAST in Schenzhen. Cheng is also enthusiastically promoting arts, serving as Chair of the Mega Arts and Cultural Events Committee and co-chair of the Meta Media Group.
NWD’s financial troubles have intensified scrutiny on the Cheng family’s succession plans. Henry Chang, the third richest tycoon in has recently named Adrian Chang as co-CEO of NWD’s investment division. As speculations about future continues, Henry’s daughter Sonia, continues to serve as vice-chair of Chow Tai Fook Jewelry Group and CEO of Rosewood Hotel Group.
