New World Development wins Shanghai bourse nod for S$570m REIT listing

Hong Kong's New World Development has received approval from the Shanghai Stock Exchange for the spinoff and listing of its REIT, with an expected offering size of 3.82 billion yuan (S$570.36 million). The company will retain 20 per cent of the units and expects net proceeds of 3.24 billion yuan fro

Hong Kong's New World Development said on Monday that the Shanghai Stock Exchange had approved the spinoff and listing of its real estate investment trust (REIT), with an expected offering size of 3.82 billion yuan (S$570.36 million).

The company said it expects to subscribe for 20 per cent of the total units at listing, while external investors will take the remaining 80 per cent for an aggregate 3.05 billion yuan.

As part of the transaction, New World will sell the holding company of Shanghai Hong Kong New World Tower to the newly listed REIT for 4.01 billion yuan. The developer expects to generate net proceeds of 3.24 billion yuan from the asset sale and the purchase of the 20 per cent stake in the REIT.

The listing comes as New World seeks to refinance debt and bolster liquidity amid weakness in Hong Kong's property sector. In May, Bloomberg News reported that Blackstone walked away from a proposed US$4 billion tie-up with New World after the property developer refused to cede control.