According to reports, New World is negotiating a rent reduction for 11 Skies with the Airport Authority

According to Bloomberg, informed sources revealed that New World Development (00017.HK) is in talks with the Airport Authority, hoping to reduce part of the rent for its 11 Skies commercial center. New World opened 1.3% higher this morning, but has since softened, currently reported at HKD 8.23, down 0.84%, with a transaction volume of HKD 49.1695 million.

The report cites informed sources stating that New World is seeking to at least waive part of the guaranteed rent, while still sharing a portion of the annual revenue from the shopping mall and office complex with the Airport Authority. Both parties are negotiating the returns the Airport Authority would receive if they agree, with one proposal being to obtain shares in the project.

Public information shows that New World has invested HKD 20 billion (approximately USD 2.6 billion) to develop this 3.8 million square feet commercial center on a plot leased from the Airport Authority near the airport. According to documents disclosed on the Hong Kong Stock Exchange and a UBS report in July, under the existing agreement, New World Development will pay HKD 1.8 billion in guaranteed rent annually, or up to 30% of the project's total annual revenue (whichever is higher), with rent payments starting in 2028 and continuing until 2066.

The report cites informed sources indicating that the Airport Authority is referencing past transactions, including acquiring a minority stake in the AsiaWorld-Expo for HKD 900 million in 2018, as a point of reference for negotiations, but the details of the agreement may change.

The Airport Authority stated in a statement that it has been in close communication with New World regarding the 11 Skies project and is confident about the development prospects of the "Airport City."