New World Group is deepening its commitment to mainland China by paying RMB 2.09 billion ($314.1 million) to acquire a plot of land in the southern city of Guangzhou, where the top Hong Kong developer will build a 250,000 square metre mixed-use project.
New World China Land Limited (NWCL) announced today that it has won the rights to a site in Changgang Village in the city’s northeastern Zengcheng district via a public auction. The mainland subsidiary of New World Development, which paid the equivalent of RMB 8,360 per square metre of accommodation area for the project, will develop the 35,245 square metre site into a 250,000 square metre project composed of commercial and residential space, according to a statement released Monday.
The eco-friendly 240-metre tall, twin tower project is expected to include 138,500 square metres of retail and office facilities, while a residential portion including public amenties will span 87,500 square metres, and 24,000 square metre is earmarked for hotel use.
A wholly owned subsidiary of NWCL will take charge of the development effort, and the group expects to invest a total of RMB 5 billion ($753.2 million) in the project.
Project Set To Gain from PRD Integration
New World, which had earlier sold off some of its mainland projects, was careful to frame the new investment as an endorsement of China’s future. “The Group has always been optimistic about China’s economic prospects,” New World chairman and executive director Henry Cheng Kar-shun commented in a statement. “For this reason, we will move forward with our mainland and Hong Kong business projects, with the new Zengcheng project a strong symbol of New World’s continuing expansion throughout the Southern China region.”
The company says the finished project will be its landmark complex in the eastern part of Guangzhou, and will support the municipal government’s initiative to build a transportation hub in the area. The parcel is located about 30 kilometres east of downtown Guangzhou, nearby the under-construction metro lines 13 and 16 as well as the Guangzhou–Dongguan–Shenzhen Intercity Railway, part of a larger commuter rail network designed to link the cities of the Pearl River Delta.
New World Steps Up Its Mainland Deals
The new investment comes amid a south China deal spree for NWCL, which last December formed a 51/49 joint venture with Guangdong builder China Merchants Shekou Industrial Zone Holdings to bid a total of more than RMB 4.8 billion ($618 million) for four projects in Shenzhen. New World said it would invest a total of RMB 9.1 billion ($1.2 billion) to help build a range of commercial and residential space on the four sites in the Qianhai district, just across the border from Hong Kong.
In August 2016, New World partnered with sister company Chow Tai Fook Enterprises to pay a total of RMB 4.2 billion for a 170,000 square metre commercial site in Qianhai earmarked for a financial and commercial complex, marking the group’s second commercial project in the area after the opening of its Qianhai Chow Tai Fook Global Goods Shopping Center.
Best known for its K11 brand of art-themed malls in cities across mainland China as well as Hong Kong, New World is a significant mainland property builder, with a development land bank of around 11 million square metres, including 5.7 million square metres of residential space, as of June 2016. The group also has around 2.2 million square meters of completed investment properties across the mainland.