27FEBRUARY 20 20 FORBES ASIA
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ooking beyond K11 and Victoria Dockside, Cheng is
continuing to expand New World through other real
estate projects. Two of New World’s biggest projects
under way are the HK$20 billion Skycity and the
HK$30 billion Kai Tak Sports Park. The first will cov-
er 25 hectares, and when fully completed in 2027, will be one of the
largest mixed-use complexes in Hong Kong. The Kai Tak Sports Park,
meanwhile, will be on the site of the former Kai Tak airport. The com-
plex will be home to a 50,000-seat main stadium, a 10,000-seat in-
door sports center, a 5,000-seat public sports ground and other facil-
ities, and is slated for completion in 2023.
Over the next five years, New World would like to more than tri-
ple its portfolio of investment properties in Hong Kong, from 2.3 mil-
lion square feet to 9.8 million. In mainland China, the company’s
rental portfolio is expected to grow from 0.2 million square meters to
1.3 million. The company, he says, wants to reposition itself to focus
on China’s “greater bay area”—an area within about a 100km radius
around Hong Kong that China would like to develop into an integrat-
ed megalopolis, including Guangzhou, Shenzhen and Zhuhai.
Demonstrating China’s importance to New World, the family priva-
tized its formerly listed New World China Land in 2016 so it could
have more direct control over its mainland strategy. More than 50% of
its China landbank is now located in Guangzhou and Shenzhen.
All this expansion comes at a cost. Among Hong Kong’s big devel-
opers, New World has one of the higher ratios of debt to equity, at
32% in 2019 compared with the previous year’s 29%. Yet Cheng is
confident that New World can handle the debt load. For the fiscal year
ended in June, the company’s revenues—generated through a mix of
property sales and its rental business—rose 26% to HK$77 billion,
while underlying profit was up 10% to HK$8.8 billion.
In December 2018, New World diversified its business further when
it bought FTLife Insurance for HK$22 billion through its infrastruc-
ture subsidiary NWS Holdings. The acquisition was aimed at expand-
ing the firm’s life and medical insurance business after it launched in
the same year Humansa, a Hong Kong-based healthcare service for
the elderly in the greater bay area.
To help with the need for more affordable housing in Hong Kong,
New World announced last September that it would donate around
20% of its agricultural landbank, some 280,000 square meters, to the
government, where it will construct over 100 apartments for low-in-
come families by 2022. Explaining this act of generosity, Cheng says:
“What I learned from my father and my grandfather is that you need
to have a very big heart.”
“I’m not inheriting a
50-year-old family business
and trying to preserve it and
hold it tight. That’s not me.”
Source: Company data
NEW WORLD’S UNDERLYING PROFIT
(HK$ BILLIONS)
20
15
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16
20
17
20
18
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19
10
8
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4
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To further his interest in art, Cheng has taken
high-level roles at some of the world’s leading
art institutions, including being a board mem-
ber of New York’s Museum of Modern Art PS1
and a trustee of London’s Royal Academy of
Arts. He likes to pepper his social media with
posts about art.
On the business side, Cheng also runs two pri-
vate investment ventures from Hong Kong. The
first is C Ventures, which he runs with Clive Ng, a
veteran entrepreneur and investor in media and
internet companies in Asia.
C Ventures has investments in about 20 fash-
ion, media and lifestyle startups. Among them
is Golong, a Hangzhou-based site selling cos-
metics from trendy brands such as British brand
Man Cave and Korean brand SNP. The company
claims to be valued after its latest financing round
at over $300 million. The K11 Investment fund
invests in tech firms in areas such as AI, virtual
reality and big data.
Beyond making money on the investments,
Cheng sees these funds as a way to stay on top of
quickly evolving tastes and technology, especial-
ly among China’s younger generation. “The par-
adigm shifts very fast,” says Cheng. “We’re look-
ing at the consumer habits of millennials and
Generation Z.”
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(EXCLUDING PROPERTY REVALUATIONS)