New World Development expects investments in China – particularly Greater Bay Area – to deliver double-digit growth, Adrian Cheng says

Sandy Li
·2-min read

Hong Kong property company New World Development (NWD) expects its investments in China, particularly the Greater Bay Area development zone, will generate double-digit growth over the next several years.

The company’s investment in the zone is the largest among its Hong Kong peers, Adrian Cheng Chi-kong, NWD’s executive vice-chairman and chief executive, told the 24th Credit Suisse Asian Investment Conference on Monday. NWD currently owns 5.6 million square metres of land in China, of which 62 per cent is in the bay area, he added. It has invested about 20 billion yuan (US$3.1 billion) in the zone since 2016.

“It has proven successful … We are guiding our investors that for the next two to three years, our contract sales [from mainland Chinese property] will have double-digit compound annual growth rate, and rental growth will also see a 25 per cent to 30 per cent [jump] in the next five years in China, especially in the Greater Bay Area,” Cheng said.

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The company is bullish about the development zone because Beijing wants to develop it into a new financial and business hub to rival San Francisco and Tokyo.

The zone contributed 76 per cent of NWD’s 11.2 billion yuan worth of contract sales in China in the six months to December 2020. And with the government backing it to become an international hub, Cheng said he anticipated it would need services and better quality of life, as young people flowed to cities such as Shenzhen and Guangzhou. This “will create a big potential for New World to grow” there, he added.

 Adrian Cheng Chi-kong, NWD’s executive vice-chairman and chief executive. Photo: Tory Ho
Adrian Cheng Chi-kong, NWD’s executive vice-chairman and chief executive. Photo: Tory Ho

Cheng said the company had taken part in six urban redevelopment projects in Guangzhou that would add 1.8 million square metres of developable area, sufficient for development over the next 10 years. “We also moved our China headquarters from Shanghai to Guangzhou [in January 2021], and are creating a science innovation centre in the city as well,” he added.

He said he believed the Hong Kong economy would recover fast once borders were reopened after everyone had been vaccinated. About 354,400 residents have been vaccinated according to the latest official figures for the city. Its total number of coronavirus infections stands at 11,379, with 203 related deaths.

“We need to react fast to capture opportunities. Now is a good time to prepare and plan,” Cheng told the conference.

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