New World aiming to generate 30pc income from non-property business

New World Development, is accelerating its expansion into areas such as healthcare and insurance as it targets more business in mainland China.

Chief Executive, Adrian Cheng Chi-kong, wants non-property services to generate 30 percent of income in five to seven years, he said in an interview on Bloomberg Television. While he did not elaborate, revenues from insurance and other non-property strategic investments made up about 21 percent of the group’s income for the six months ended December.

The builder operates a range of other businesses including retail, aviation, infrastructure and transport. By doubling down on services including healthcare, education and insurance, it is seeking to boost its presence on the mainland, the location for some of the group’s fastest-growing projects.

“The branding effect for New World is very important,” said Cheng, 41. “Because we are creating these integrated projects, we are also creating this ecosystem where you are able to cover all aspects of your life.”

New World has been betting on services outside of property development since 2017, when Cheng officially took the helm of the company founded by his late grandfather. In 2018, it agreed to acquire FTLife Insurance for US$2.75 billion and launched a healthcare brand targeting seniors in Hong Kong.

The company is expanding in the Greater Bay Area by preparing for an insurance license in China and building a school, Cheng said. New World aims to be the largest Hong Kong developer in the economic hub, where it has spent more than HK$30 billion (US$3.9 billion) acquiring 1.5 million square meters (16 million square feet) of land since 2016.

New World is also planning to open 36 of its K11-brand retail and commercial projects in nine mainland cities as well as Hong Kong by 2025. The firm targets double-digit growth for its K11 rental projects and home sales in the next five years, according to Cheng.

Despite concerns about a growing number of people leaving Hong Kong, CHeng remains confident in the housing sector. He said there is strong demand from the middle and upper segments of the residential market.