New World Development advances first C-REIT by Hong Kong enterprises
New World Development Company Limited (“New World Development” or the “Group”; Hong Kong stock code: 00017) announces that it has received the notice of acceptance by Shanghai Stock Exchange (“SSE”) on the proposed spin-off and separate listing of the NWD C-REIT on SSE (“Proposed Spin-Off”).
The underlying assets of the NWD C-REIT comprise Shanghai K11 Art Mall and Shanghai K11 ATELIER NWT (“Asset”), in which New World Development holds the entire equity interest. Following the completion of the Proposed Spin-Off, the Group will remain the operation manager of the Asset to provide operation management, property management and related management services. The Asset will continue to be marketed under the Group’s “K11” brand.
The expected offering size of the NWD C-REIT is approximately RMB3,818 million. New World Development will subscribe for at least 20% interest in the NWD C-REIT . The remaining will be subscribed by strategic investors, institutions investors and retail investors. Upon subscription, the estimated net proceeds receivable by the Group from the Proposed Spin-Off will be approximately RMB3,240 million.
Ms. Echo Huang, Executive Director and Chief Executive Officer of New World Development, said, “The NWD C-REIT will be the first among Hong Kong enterprises. Through years of sustained presence in prime commercial districts across Chinese Mainland, New World Development has developed a proven operating model for the K11 brand. The establishment of NWD C-REIT demonstrates the strong brand equity of NWD and K11 in the Chinese Mainland market and marks an important milestone in advancing the Group’s asset management and capital deployment capabilities.
“The Proposed Spin-Off will open up the opportunity for the Group to access new forms of capital from institutional and retail investors in the region, as well as enable us to unlock asset value and redirect resources to support future growth through other projects. Furthermore, the NWD C-REIT will become a capital instrument with stable return in the form of unit distributions, whilst the Group continue to benefit from the business prospects and results of the Asset through asset-light model,” she added.
The Group owns and operates a wide range of quality assets in Chinese Mainland, including Hangzhou K11 Art Mall and the K11 ELYSEA project in Shanghai, both are expected to be completed in the near future. The continued financialisation of these assets will be important to the Group’s strategy to recycle capital, improve liquidity and deleverage.
The Group has also received an irrevocable undertaking from its controlling shareholder, Chow Tai Fook Enterprises Limited. Accordingly, in the event that an EGM is convened by New World Development to approve the Proposed Spin-Off, its controlling shareholder will vote in favour of any relevant resolutions.