China approves New World REIT listing worth $570 million — Channel NewsAsia

In China, Hong Kong developer New World Development said that the Shanghai Stock Exchange had approved the spin-off and listing of its real estate investment trust, REIT. The expected offering size will amount to 3.82 billion yuan, or about $570.36 million.

Offering terms

New World Development plans to subscribe for 20% of all REIT units at the time of listing. The remaining 80% is to be purchased by external investors for a total of 3.05 billion yuan, Channel NewsAsia reports.

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As part of the deal, the company will sell the holding company Shanghai Hong Kong New World Tower to the new REIT for 4.01 billion yuan. New World expects that net proceeds from the asset sale and the subscription for 20% of the fund's units will amount to 3.24 billion yuan.

Debt refinancing

The REIT listing comes as New World Development seeks to refinance debt and strengthen liquidity amid weakness in Hong Kong's real estate market. In May, Bloomberg News reported that Blackstone had walked away from a proposed $4 billion deal with New World after the developer did not agree to hand over control of the company.