New World Development sells Pentahotel in Hong Kong for US$257 million as it disposes of non-core assets to reduce debt
- Local developer Wang On Properties teams up with New York-based Angelo, Gordon & Co to take over the 695-room hotel in east Kowloon
- New World aims to unload US$1.28 billion worth of non-core assets during the financial year ending September 2023
New World Development is selling a Hong Kong hotel for HK$2 billion (US$257 million) as the company owned by the family of billionaire Henry Cheng Kar-shun steps up its disposal of non-core assets to reduce its debt load amid spiralling interest rates and slumping property sales.
Local developer Wang On Properties (WOP) has teamed up with New York-based alternative investment manager Angelo, Gordon & Co to take over the 695-room Pentahotel in Kowloon from New World, according to a filing with the Hong Kong stock exchange on Thursday.
The move is part of New World’s strategy to stay resilient amid plunging property sales and the growing cost of debt. The property titan aims to unload HK$10 billion worth of non-core assets during the financial year ending in September 2023, CEO and executive vice chairman Adrian Cheng Chi-kong told investors on a call in July.
Cheng, whose billionaire father Henry Cheng is the third-richest person in Hong Kong, cited car parking bays, unprofitable hotels and projects New World does not control as examples.
New World is the city’s most indebted developer, according to financial reports that show its net gearing stood at 43.2 per cent in financial year 2022, compared with 27.5 per cent for Henderson Land Development as of the end of last year.