New World is also planning to open 36 of its K11-brand retail and commercial projects in nine mainland cities as well as Hong Kong by 2025. The firm targets double-digit growth for its K11 rental projects and home sales in the next five years, according to Cheng. Cheng cited increasing disposable income and a young population as the draw cards in the area, which encompasses a cluster of cities in the Pearl River Delta. Despite concerns about a growing number of people leaving Hong Kong, the property heir remained confident in the former British colony’s housing sector. He said there is strong demand from the middle and upper segments of the residential market.
New World has been betting on services outside of property development since 2017, when Cheng officially took the helm of the company founded by his late grandfather. In 2018, it agreed to acquire FTLife Insurance Co. for $2.75 billion and launched a health-care brand targeting seniors in Hong Kong. “The branding effect for New World is very important,” said Cheng, 41. “Because we are creating these integrated projects, we are also creating this ecosystem where you are able to cover all aspects of your life.”
The company is expanding in the Greater Bay Area by preparing for an insurance license in China and building a school, Cheng said. New World aims to be the largest Hong Kong developer in the economic hub, where it has spent more than HK$30 billion ($3.9 billion) acquiring 1.5 million square meters (16 million square feet) of land since 2016. The Hong Kong builder operates a range of other businesses including retail, aviation, infrastructure and transport. By doubling down on services including health care, education and insurance, it’s seeking to boost its presence on the mainland, the location for some of the group’s fastest-growing projects.
LEARN MORE Source Before it’s here, it’s on the Bloomberg Terminal.
— With assistance by Adrian Wong “We are very optimistic with Hong Kong,” Cheng said. “We will grow together with Hong Kong.”
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