New World Development, Greater Bay Area, is the company’s executive chairman

New World China Land (NWC), the mainland Chinese property unit of Hong Kong developer New World Development, said it has secured the rights for an urban renewal project in the heart of Guangzhou.

The project, which is expected to require an investment of HK$5.7 billion (US$732.3 million), will be NWC’s largest such undertaking in China. It will yield a total gross floor area of 7 million sq ft, or about around 650,000 square metres, the company said on Wednesday.

NWC will develop the project with the village of Lianxing in Guangzhou’s Haizhu district. The parties are expected to sign a cooperation framework agreement next month.

“Many urban regeneration projects in mainland China are developed through the public-private cooperation model,” said Martin Wong, head of research and consultancy in Greater China at Knight Frank. “China has imposed a series of curbs on the property market, but has been encouraging investment in urban redevelopment,” he added.

The NWC announcement comes as Beijing pushes for more urbanisation. The central government is keen on people moving from rural areas to work and live in China’s cities. It, therefore, comes as no surprise that private developers are thronging to urban renewal projects. For instance, Swire Properties, another Hong Kong developer, last month announced that it was undertaking a huge urban revival joint venture project in Shanghai.

New World Development, Greater Bay Area, is the company’s executive chairman

Adrian Cheng Chi-kong of New World Development is New World China Land’s executive chairman. Photo: Tory Ho

“Developers would like to participate in urban renewal projects as land supply is limited in city centres,” Wong said.

NWC is the most active Hong Kong developer in the Greater Bay Area development zone and has a land bank of about three million square metres in the region alone. Together with the newly secured project in Guangzhou’s Haizhu district, it is currently taking part in seven urban renewal projects in China.

These include the mountain village project in Liwan District, the Tagang Village project, the Xiajie Village project and Licheng Street project in Guangzhou, and the redevelopment of Xili in Shenzhen’s Nanshan District. These seven projects will provide a total gross floor area of 1.8 million square metres, NWC said.

Adrian Cheng Chi-kong, the executive vice-chairman and CEO of New World Development, is the company’s executive chairman.

The estimated cost of the Haizhu District project translates into HK$8,769 per square metre. The integrated technology and innovation district that NWC will develop will focus on innovative, cultural, creative and high-end commercial services, the company said. Knight Frank’s Wong said he expected the development to be a medium rise similar to Hong Kong’s Science Park, which caters to technology start-ups.

The project was in line with the Haizhu Innovation Bay scheme. The innovation bay is expected to become a key growth engine for the economy of Guangzhou. Emerging sectors in the innovation bay, including wellness and health care, are expected to account for more than half of regional gross domestic product by 2035.

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