Private equity giant Blackstone is reportedly close to securing a deal that would make it the largest shareholder in Hong Kong property developer New World Development, according to a Bloomberg report citing sources familiar with the matter.
New World, controlled by the wealthy Cheng family through their conglomerate Chow Tai Fook Enterprises (CTFE), currently sees the family holding 45.24% of the company. It is not yet clear how large a stake Blackstone would acquire or what the terms of the transaction might be.
In a statement, New World confirmed that CTFE had been approached by multiple potential investors regarding possible investment in the company, but stressed that no agreements have been finalised and there is no certainty a deal will materialise.
The potential investment comes as New World – the most indebted among its Hong Kong-listed peers – seeks to strengthen its balance sheet amid ongoing pressure on the property sector from tighter credit conditions and a soft office market. The developer’s debt issues stem from an ambitious expansion drive disrupted by Hong Kong’s political unrest, the Covid-19 pandemic, and a prolonged real estate slump.
Blackstone, one of the world’s largest alternative asset managers with over $1tn under management, has been steadily increasing its exposure to Asian real estate and infrastructure assets. A deal for a controlling stake in New World would mark one of the firm’s highest-profile investments in the region’s property sector to date.
As of Thursday, New World had a market capitalisation of HK$28.01bn ($3.59bn), according to LSEG data.
