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New World pulls back on Causeway Bay acquisition amid uneven recovery
Developer steps back from consolidating three commercial sites as high costs and patchy demand weigh on redevelopment decisions
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Hong Kong’s New World Development (NWD) has shelved plans to acquire the remaining stakes in three commercial sites in Causeway Bay, signalling continued caution among developers despite signs of improving demand in the core office market.
The company, which has been selling assets to reduce debt, said it would “exercise prudence as appropriate, having regard to cost and efficiency, as well as overall market supply and demand, with a view to delivering reasonable returns”.
NWD, which reported total debt of HK$144.3 billion (US$18.4 billion) as of December, had applied in October for a compulsory sale to buy out minority owners of the sites at Percival Street, Russell Street and Lee Garden Road.
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Such sales allow developers to force the sale of ageing buildings once ownership thresholds – typically between 65 and 90 per cent, depending on factors such as age and location – are met, facilitating redevelopment and, in some cases, boosting housing supply.
The move comes as analysts point to a two-speed recovery in Hong Kong’s commercial property market
“Currently, recovery is mainly in the core Central office leasing market; other office sectors and the broader retail market remain under pressure,” said Alkan Au, head of value and risk advisory for Hong Kong and Macau at JLL.
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