Hong Kong’s property sector continues to face significant headwinds, as evidenced by New World Development Co’s latest financial results. The prominent developer reported a substantial loss for the fiscal year ending June 30, marking its second consecutive year in the red amid ongoing market challenges.
The company’s financial performance deteriorated further, with losses from continuing operations reaching HK$16.3 billion compared to HK$11.8 billion the previous year. These figures reflect substantial one-time impairment charges and operational losses that have compounded the developer’s financial strain during the prolonged property downturn.
Management has been actively pursuing financial stabilization measures, including securing a HK$3.95 billion loan facility and completing an US$11 billion refinancing arrangement earlier this year. The company is also engaged in discussions with potential investors, including Blackstone Inc, regarding additional capital infusion opportunities to strengthen its financial position.
Market conditions remain challenging across New World’s core business segments. Both Hong Kong and mainland China’s residential markets continue to struggle, with Hong Kong home values still approximately 30% below their 2021 peak. Commercial property values have also declined sharply, with office and retail space prices down 48% and 41% respectively from their 2018 highs.
The developer’s difficulties have been compounded by internal changes, including leadership transitions following Adrian Cheng’s departure last September. As one of Hong Kong’s major property firms, New World’s ongoing challenges reflect broader sectoral pressures that continue to impact the region’s real estate landscape.