Exclusive | Hong Kong property: New World and China Merchants Shekou to jointly develop Northern Metropolis project
- The mixed-use project, close to Fanling and Sheung Shui, will include a residential component with some 2,000 flats
- The Northern Metropolis project will cover an area of about 150,000 sq ft and will have a total buildable floor area of over 1 million sq ft, a source says
State-owned conglomerate China Merchants Shekou Group has formed a partnership with New World Development to jointly develop a mixed-use project in the Northern Metropolis, with the residential component set to provide some 2,000 flats.
The investment comes as Hong Kong pushes the Northern Metropolis as a new engine of Hong Kong’s future growth and to integrate the area’s development with that of Shenzhen and other cities in the Greater Bay Area.
“New World has a land bank of 15 million sq ft in the Northern Metropolis, much of which is well positioned and adjacent to the San Tin Technopole,” said Adrian Cheng Chi-kong, CEO of New World Development. “We will accelerate the release of the farmland value through different means, actively support the national planning, and inject energy into the development of the Northern Metropolis.”
This is New World’s second collaboration with a Chinese state-owned conglomerate in the Northern Metropolis, following its venture with China Resources Group last year.
The Northern Metropolis project will cover an area of about 150,000 sq ft, close to Fanling and Sheung Shui. It will have a total buildable floor area of over 1 million sq ft and is estimated by the companies to have a market value of HK$15 billion (US$1.9 billion), according to sources familiar with the matter.
The site falls within the “Boundary Commerce and Industry Zone”, one of the four development zones outlined in the “Northern Metropolitan Area Action Plan” by Chief Executive John Lee Kar-chiu in his Policy Address last October.
The Northern Metropolis will provide around 500,000 new housing units and generate some 500,000 jobs upon completion.
Under the North Metropolis plan, the zone will promote advanced manufacturing industry andemerging industries such as food technology and modern logistics.
The formation work has been completed, including road connections, water, electricity and other infrastructure, so it can attract investment from central enterprises and accelerate the return of funds, according to sources familiar with the matter.
The zone has the potential to develop into an industrial centre for cross-border commercial services, retail financial services, medical services and leisure consumption, the source added.
“China Merchants has always paid close attention to the development opportunities of the Northern Metropolis since the announcement of its development plans,” said Miao Jianmin, chairman of China Merchants Group, the parent of China Merchants Shekou.
Miao said the group hopes to fully leverage and utilise the group’s resources to support the area’s development, adding that China Merchants Shekou and New World will “work together to create a new benchmark for cooperation between state-owned enterprises and Hong Kong companies and jointly foster the long-term prosperity and stability of Hong Kong”.
New World has teamed up with China Merchants Shekou a couple of times in the past, including in 2022 on the MTR’s Tseung Kwan O Pak Shing Kok project. On the mainland, they jointly developed the K11 project in Shenzhen’s Prince Bay.
Last December, New World teamed up with China Resources Land to develop a project which is expected to have a total buildable floor area of about 720,000 sq ft and provide some 1,800 residential units. Construction is expected to start this year.
These joint venture projects will help New World ease its financial burden.
New World has set an ambitious target of reducing its gearing ratio to below 40 per cent by 2027, from the current level of around 50 per cent.
