New World Development (NWD) on Thursday priced its latest Hong Kong residential project at a substantial discount, as the embattled developer scrambles to generate cash to whittle down HK$123.7 billion (US$15.9 billion) in debt.
Sun Hung Kai Properties priced the first batch of flats in its Lime Gala project in August 2016 at an average of HK$17,732 per square foot.
The price was about 13 per cent lower than its accommodation value of about HK$21,500 sq ft, according to Alex Leung, a senior director at CHFT Advisory and Appraisal. The accommodation value – the land acquisition cost divided by the gross floor area permitted for the project – which in this case was about HK$6 billion and 279,600 sq ft, he said.
Additionally, the construction cost could amount to another HK$1.5 billion before interest, he added.
The Hong Kong-listed company is one of the most indebted developers in the city, with HK$123.7 billion in consolidated net debt as of June 2024, according to its annual report. NWD has one of the highest net gearing, or debt-to-equity ratios, at 55 per cent. It also held interest-bearing loans and bonds amounting to HK$151.6 billion.
