New World Development Terminates 11 SKIES Contract with Airport Authority, Pay HK$2.3 Billion Fee
Thestandard · 1 SOURCESabout 2 hours ago2 MIN
Summary
New World Development (NWD) has announced it will terminate its agreement for the 11 SKIES project with the Airport Authority Hong Kong effective April 1, 2027. The developer will pay an early termination fee of HK$2.3 billion and transfer all project assets—including three office towers and an entertainment hub—to the Airport Authority at no cost. NWD will additionally pay more than HK$3 billion in cash and cash equivalents. While the company reported a significant loss driven by impairments on the project, it achieved a net profit of HK$2.23 billion in the 2025-2026 period, representing a turnaround from the previous period.
Key Points
- NWD will end 11 SKIES project contract on April 1, 2027, paying HK$2.3 billion early termination fee to Airport Authority
- Three office towers and entertainment hub will transfer to Airport Authority free of charge under the termination agreement
- NWD to pay Airport Authority over HK$3 billion in cash and cash equivalents upon contract termination
- Developer recorded HK$26.8 billion loss for 2025-2026 period, primarily from non-cash impairment on 11 SKIES project
- NWD achieved turnaround to HK$2.23 billion net profit in 2025-2026 despite overall loss, with revenue down 28 percent to HK$20 billion
- Airport Authority CEO Vivian Cheung Kar-fay stated assets are excellent quality and operations expected from 2028/29
Why It Matters
The termination marks a significant restructuring of one of Hong Kong's largest airport-linked development projects, with the Airport Authority assuming direct control and planning to set up a dedicated subsidiary to operate 11 SKIES. The deal provides NWD with a path to restore profitability after substantial write-downs while giving the government-backed authority full ownership of premium commercial and entertainment assets near Hong Kong International Airport.
The termination marks a significant restructuring of one of Hong Kong's largest airport-linked development projects, with the Airport Authority assuming direct control and planning to set up a dedicated subsidiary to operate 11 SKIES. The deal provides NWD with a path to restore profitability after substantial write-downs while giving the government-backed authority full ownership of premium commercial and entertainment assets near Hong Kong International Airport.