Airport Authority Takes Full Control of 11 SKIES as New World Exits with HK$18.3 Billion Loss
AM730 · 10 SOURCES1 day ago3 MIN
Summary
New World Development announced on Wednesday that it has entered into a termination deed with the Hong Kong Airport Authority regarding the 11 SKIES project at Hong Kong International Airport. Under the agreement, New World will return the project to the Airport Authority by April 1, 2027, transferring ownership of the shopping mall, three office towers, and entertainment hub without charge . The developer will compensate the Airport Authority with over HK$30 billion, including a HK$2.3 billion early termination fee and up to HK$10.5 billion for outstanding works . The project has recorded confirmed net losses of HK$18.32 billion according to New World's management assessment . The Airport Authority plans to establish a dedicated subsidiary to manage the development, targeting global entertainment operators and commercial partners with operations expected to begin from 2028-29 .
Key Points
- New World subsidiary Luxe (HK) Limited will surrender relevant leases and transfer assets including three office buildings and an entertainment hub to the Airport Authority
- The developer will pay HK$2.3 billion in early termination fees plus up to HK$10.5 billion for completing outstanding works, with the Airport Authority assuming zero additional costs
- New World must provide property management services for up to five years after handover if requested, while also operating two entertainment facilities post-termination
- Chow Tai Fook Enterprises, New World's major shareholder, has granted the Airport Authority a one-time option to acquire New World shares for HK$1, exercisable within three years
- The Airport Authority will reposition 11 SKIES as the core of SKYTOPIA, which includes a 20,000-seat performance venue, Hong Kong's largest marina, and automated transport links
Why It Matters
The handover marks a significant restructuring of Hong Kong's airport city development strategy, as the Airport Authority assumes direct control of what it envisions as a unique entertainment hub that could attract travelers to extend layovers in Hong Kong . Industry sources suggest the agreement allows both parties to avoid lengthy litigation that could have taken 3-7 years, with outcomes potentially less favorable than the current settlement . The government has welcomed the agreement, expressing hope that the Airport Authority will quickly reposition the project and align it with the broader SKYTOPIA development expected to gradually launch from 2028 .
The handover marks a significant restructuring of Hong Kong's airport city development strategy, as the Airport Authority assumes direct control of what it envisions as a unique entertainment hub that could attract travelers to extend layovers in Hong Kong . Industry sources suggest the agreement allows both parties to avoid lengthy litigation that could have taken 3-7 years, with outcomes potentially less favorable than the current settlement . The government has welcomed the agreement, expressing hope that the Airport Authority will quickly reposition the project and align it with the broader SKYTOPIA development expected to gradually launch from 2028 .