New World Puts New Territories Mall on the Market for $764M

New World Development is looking for a buyer for a retail podium of its Discovery Park development in the New Territories as the Hong Kong-listed developer shops a number of non-core properties in the city, according to market sources.

The company controlled by tycoon Henry Cheng and his family are asking HK$6 billion ($764.4 million), for the D Park shopping centre, which is part of the Discovery Park project on Castle Peak Road in Tsuen Wan, per local media reports, with New World said to be marketing a total of HK$10 billion of assets around the city.

In addition to the retail property, New World’s clearance sale is said to include parking spaces, hotels and partial stakes in other assets, led by the Pentahotel Hong Kong in New Kowloon’s San Po Kong area, which carries a reported price tag of HK$2.5 billion.

“By means of active disposal of non-core assets and businesses, the group concentrates on developing its core businesses, continuously optimising its asset portfolio and returns, enhancing corporate efficiency and creating more value for shareholders,” New World said in its latest interim report. The group had completed disposals of about HK$3.81 billion in non-core assets during the second half of 2021, which brought in cash for its core businesses, it said.

Leaving Tsuen Wan

Located at 398 Castle Peak Road, D Park shopping centre spans about 466,400 square feet (43,329 square metres) of floor area, and is within a 4-minute drive from the Tsuen Wan MTR station. At the current asking price, the buyer would be paying about HK$12,864 per square foot of floor area to acquire the 1997-vintage retail building.

Serving the 3,360 homes at New World’s 2,700,000 square foot Discovery Park development, the shopping centre covers three storeys and is home to about 140 stores, including a location of jewellery retailer Chow Tai Fook, which is also controlled by the New World chairman Henry Cheng.

New World had spent HK$700 million to renovate the shopping centre in 2012 – about two years after it acquired the remaining half-stake in the property and its 1,000 parking spaces from co-developer HKR International Limited for a reported HK$1.37 billion.

New World’s marketing effort in Tsuen Wan comes amid a drought of retail property trades, with transactions involving existing retail assets in Hong Kong having fallen 79 percent year on year during the second quarter to total just HK$2.3 billion during the period, according to a Colliers report published this month.

New Pipeline

At the same time that New World is marketing aging assets, the company is starting work on new projects, including its redevelopment of the State Theatre on King’s Road where it won approval in May to convert the property into a 35,790 square metre project combining residential and commercial space.

During that same month, the developer also reportedly applied for a compulsory sale of three adjacent properties in Causeway Bay, paving the way for it to build a HK$14 billion commercial project in the area.

Outside of Hong Kong, a unit of Knight Dragon, a UK-based private developer controlled by Henry Cheng and his family, last month issued 100,000 digital tokens worth £1,400 ($1,713) each, giving buyers rights to cash flow from an apartment complex in its southeast London project.

The move, which marked the first property tokenisation project in Central London, entitles investors to 80 percent of the gross profit generated by a 191-unit rental residential tower in the firm’s flagship Greenwich Peninsula development.