A HK$100 billion ($12.8 billion) urban development plan near Hong Kong International Airport is running into turbulence, with its flagship retail complex struggling to attract tenants and developer New World Development (NWD) weighed down by mounting financial pressures.
The project’s centerpiece, 11 Skies, is a massive commercial complex situated just west of the airport. With 350,000 square meters of space and plans for more than 800 tenants, the HK$20 billion development is positioned as one of Hong Kong’s largest malls. Attractions include KidZania, a children’s indoor role-play amusement park, which appears ready to open. The mall is slated for phased openings starting in 2026.
The airport city scheme is a cornerstone of Hong Kong’s government strategy to boost tourism and stimulate the economy by building a new hub around the airport. However, its prospects are increasingly uncertain. A local newspaper reported in June that only about 40% of retail space in 11 Skies has been leased, raising concerns about whether travelers will stop at the complex instead of heading into Hong Kong’s city center, just 30 minutes away by high-speed rail.
Compounding the problem, NWD is grappling with severe debt challenges. The developer revealed earlier this year that it would delay interest payments on its perpetual bonds, sparking fears of potential default. Its debt load reached HK$210 billion, prompting authorities and banks to step in with refinancing support worth HK$88.2 billion.
Even with this lifeline, the company’s finances remain fragile. For the year ending June, NWD reported a 20% drop in sales to HK$27.6 billion and posted a net loss of HK$16.3 billion, after an even steeper loss a year earlier. Impairment charges from weakening property values added to the strain, including a HK$2.7 billion writedown on 11 Skies itself.
To shore up liquidity, NWD recently secured a HK$5.9 billion loan from a consortium of banks led by Deutsche Bank, pledging prime assets such as the Victoria Dockside development on Victoria Harbour as collateral. CEO Echo Huang insisted during Friday’s earnings briefing that cash flow has improved and the outlook is “brighter,” though cash reserves remain significantly depleted compared to two years ago.
Analysts warn that the future of 11 Skies—and the government’s wider airport city vision—hinges on whether NWD can stabilize. While authorities are reportedly considering transferring the project to another developer, major firms remain cautious about stepping in.
The Cheng family, owners of NWD and one of Hong Kong’s wealthiest clans with assets worth $19.5 billion in 2025, also controls Chow Tai Fook Jewellery, Rosewood Hotel Group, and infrastructure giant CTF Services. Despite the family’s deep pockets, investor confidence in NWD remains fragile amid the broader downturn in Hong Kong and mainland China’s property markets.
