New World Development Project Sells Well Despite COVID-19 Outbreak, Total Sales for BAYHOUSE at Prince Bay in Shenzhen Exceed RMB3 Billion
Despite the COVID-19 outbreak, sales through New World Development’s newly launched online property purchase service have been brisk at BAYHOUSE. With approximately a hundred flats snapped up at this Prince Bay development in Shenzhen, over RMB3 billion in sales have been generated by this joint venture from New World Development (the Group or NWD) and China Merchants Shekou Industrial Zone Holdings Co., Ltd.
Situated next to the brand-new cruise homeport in Shekou, Shenzhen, the Prince Bay Project is a large-scale commercial and residential complex with a total GFA of 390,000 sq m. In addition to the pre-sale of the BAYHOUSE residential project, the complex under construction offers a comprehensive range of facilities, including a K11 Art Mall, the family-themed D•PARK and a Grade A office tower. The response to the BAYHOUSE sale was extremely positive, with buyers attracted by flats offered at sizes from 230 to 390 sq m and at an average price per flat of RMB20 million.
As the COVID-19 outbreak continues, New World China Land has enabled buyers to select the flats of their choice through the online platform so as to maintain a safe social distance. As well as using technology to overcome these obstacles to sales, enhanced protective measures were implemented at the sales centre, with all visitors being required to have their temperature taken and to follow sanitisation procedures.
These measures have been effective. In a residential project of 163 flats, approximately 100 have been sold since sales started last December. The average final settlement price is between RMB21 million and RMB51 million and the average selling price per sq m is between RMB100,000 and RMB110,000. In a rare exception to current trends, the total in sales, covering 90% of first batch of flats available, comes to over RMB3 billion.
Adrian Cheng, Executive Vice-Chairman and General Manager of New World Development said, "The fact that sales were robust despite the COVID-19 outbreak has demonstrated strong customer demand for Mainland real estate, and especially in the huge investment potential of prime projects in the Greater Bay Area (GBA). The Prince Bay Project in Shenzhen is a key project for NWD. The Group has confidence in the future of the GBA and will continue to respond to changing circumstances with innovative sales approaches to suit market needs and generate strong sales. Backed by a stable and reliable cash flow, the Group will look for new investment opportunities with growth potential, and innovate to strengthen the brand’s reputation on the Mainland. The team will also continue to infuse new projects with its signature bespoke craftsmanship, optimising value for stakeholders and enhancing the investment value of the Group."
The overall gross margin of segment results for NWD’s property development in Mainland China was over 60%, up 25 percentage points, of which the gross margin of projects in the GBA reached 73%. The total contracted sales proceeds of properties amounted to RMB11.6 billion, up 25% during the period under review, with the GBA being the largest contributor, reaching 50%. The average selling price of contracted residential sales was RMB33,000 per sq m.
Cash is king when the market is sluggish. NWD has a healthy level of fiscal reserves to contend with adversity and to take advantage of bargains when the right opportunity arises. Regardless of whether the economic situation is more favourable or less so, NWD has the capacity to turn adversity into opportunity. The Group has disposable capital of HK$94.6 billion, including HK$63.6 billion of cash and bank balance, as well as around HK$31 billion in bank loans.
Since 2016, NWD has enriched its businesses portfolio in the GBA through a series of forward-looking strategies. In the future, the Group will further increase its investment intensity in cities such as Shenzhen and Guangzhou. Its latest projects include the Hanxi Changlong land site, with a GFA of over 500,000 sq m, centred on a major transport interchange in Panyu. This project will be developed into a transit-oriented complex comprising D•PARK, Grade A office buildings and residential developments. In Shenzhen’s Qianhai free-trade zone, the Chow Tai Fook Finance Tower, with a GFA of 180,000 sq m, will position itself as a world-class financial, commercial and service complex. The Company also plans to build a large-scale commercial and residential complex with a GFA of approximately 388,000 sq m in Zengcheng, Guangzhou. The project will attract elites and professionals from around the world in response to requirements for the development of a demonstration base of high-tech industries in eastern Guangzhou.