Airport Authority Hong Kong is in talks with New World Development (NWD) to get a massive commercial property project at the heart of Hong Kong’s international airport back on track, according to several sources familiar with the matter.
The authority is considering the option of seeking a new partner to undertake and complete the work at 11 Skies shopping centre, which was awarded in 2018, the sources said. The financial terms of the move are still under negotiation, they said, declining to be identified for discussing a confidential matter.
The move, viewed as a win-win solution for both parties, would offer relief to NWD, which is undergoing the biggest debt workout in three generations of ownership by the Cheng family. For the authority, it ensures that the city’s status as an aviation and tourism hub is shielded from the developer’s debt woes.
The major sticking point in the talks is the potential compensation due to the authority for the 40-year contract, one of the sources said. NWD is under contract to pay the authority HK$1.8 billion (US$229.3 million) every year in guaranteed rent, the sources said.
The authority’s press office and spokespeople at NWD did not respond to requests for comment.
The project, with 3.8 million sq ft (353,000 square metres) of gross floor area, is part of the airport authority’s SkyCity master plan, which combines shopping, entertainment, dining, commercial offices and several hotels in a 25 hectare (61.8 acre) area to undergird Hong Kong’s status as Asia’s aviation and international travel hub. The talks are focused on the retail, dining and entertainment space of 11 Skies, according to a source. The project also features three office towers that are not within the scope of discussion.
