On September 21st, New World Development announced that its application for a proposed spin-off and listing of the NWD C-REIT fund on the Shanghai Stock Exchange has been formally accepted by the exchange.

The underlying assets of NWD C-REIT include the Shanghai K11 Art Mall and Shanghai K11 ATELIER New World Tower, which are wholly owned by New World Development. Upon completion of the proposed spin-off, the group will continue to serve as the operating manager of the underlying assets, providing operational management, property management, and related services. The assets will continue to be marketed under the group's "K11" brand.

The expected issuance scale for NWD C-REIT is approximately RMB 3.818 billion. New World Development will subscribe to at least 20% of the interests, with the remainder to be taken up by strategic investors, institutional investors, and public investors.

Following the subscription, the group is expected to generate net proceeds of approximately RMB 3.24 billion. The Executive Director and Chief Executive Officer of New World Development, Ms. Huang Shaomei, noted that NWD C-REIT will be the first mainland China commercial property REIT led by a Hong Kong enterprise.

Ms. Huang added that the spin-off is expected to broaden the group's capital channels, unlock asset value, and allow the group to redeploy resources into other projects to support future growth. The income distributions will position NWD C-REIT as a stable-return capital vehicle, while the group will continue to benefit from the business prospects and performance of the underlying assets through its asset-light model.

The group owns and operates a range of premium assets in mainland China, including upcoming projects such as the Hangzhou K11 Art Mall and Shanghai K11 ELYSEA. The continued securitization of such assets is particularly important for the group's strategy of capital recovery, liquidity enhancement, and deleveraging.

The group has also obtained an irrevocable undertaking from its controlling shareholder, Chow Tai Fook Enterprises Limited, to vote in favor of any related resolutions should an extraordinary general meeting be convened for the proposed spin-off.