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New World Development pays HK$2.3B to exit 11 Skies airport project
New World Development will pay HK$2.3B and hand the 11 Skies complex back to the Airport Authority on 1 April 2027, booking an HK$18.3B loss, while upsizing a Deutsche Bank facility to HK$4.9B.
Why it matters
The exit ends a sub-lease that was to run until September 2066, freeing New World from billions in future rent commitments, but at the cost of a one-off loss larger than its market capitalisation. It is the most significant step yet in the developer's balance-sheet repair.
Full report
New World Development (0017.HK), its indirect wholly owned subsidiary Roxy Limited and the Airport Authority Hong Kong signed a Termination Deed on September 30, after trading hours, to end the sub-lease of the 11 Skies commercial complex near Hong Kong International Airport early. Roxy will surrender the site and the development to the authority on April 1, 2027, roughly 40 years ahead of the original September 2066 expiry.
New World and Roxy will pay an early termination fee of HK$2.3 billion and provide up to HK$1.05 billion in works and services. The group recorded a net loss of HK$18.3 billion on the transaction, including HK$14.7 billion of impairment, pushing its full-year net loss to HK$28.1 billion for the year ended June. Excluding non-cash items, it reported core profit of HK$2.2 billion, its first in three years.
In parallel, the company upsized a Deutsche Bank loan facility to HK$4.9 billion from HK$3.95 billion to ease near-term liquidity, while controlling shareholder Chow Tai Fook Enterprises granted the Airport Authority an option to acquire 750 million New World shares at an exercise price of HK$2.25 billion. CEO Echo Huang said the company had 'resolved a major issue' and called the deal an important step for its long-term development.
The Airport Authority said 11 Skies will complement Skytopia, its HK$100 billion plan to turn the airport area into a world-class tourism and business destination, with a new subsidiary dedicated to the project targeting operations from 2028-29.
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