Airport Authority in close talks with New World over 11 SKIES, positioning to align with SKYTOPIA

The Airport Authority is in close communication with developer New World Development over the 11 SKIES project, with the mall's positioning to be aligned with the overall development of SKYTOPIA to create synergies, the authority said on Wednesday night.

Earlier reports suggested that the Airport Authority has taken over 70 percent of the retail and dining space at 11 SKIES, the retail core of the project, ahead of the opening of Terminal 2.

Responding to inquiries, the Airport Authority said that due to post-pandemic changes in consumption patterns, the mall's positioning will shift, with a greater emphasis on dining and entertainment elements.

The authority expressed confidence in SKYTOPIA's development, noting that 2028 will be a good time for 11 SKIES to begin phased operations in coordination with SKYTOPIA.

According to the South China Morning Post, the Airport Authority has taken control of 2.66 million square feet of retail and dining space at 11 SKIES, about 70 percent of the project. It remains unclear whether the remaining 570,000 square feet of experiential entertainment space and Grade A office space have also been taken over.

New World won the design, build and operate contract for the project in 2018, with a total investment exceeding HK$20 billion. Under the existing agreement, New World is required to pay the Airport Authority an annual guaranteed rent of HK$1.8 billion from 2028 to 2066, or up to 30 percent of the project's annual gross revenue, whichever is higher. The huge investment in 11 SKIES has been cited as partly responsible for New World's debt crisis.

Earlier reports suggested the developer was in talks with the Airport Authority to terminate the lease agreement and transfer the HK$30 billion retail property to the authority at no cost.

The 11 SKIES project, located near Terminal 2, was originally designed to accommodate more than 800 shops and would become Hong Kong's largest shopping mall upon opening. However, most storefronts are currently boarded up, with only two restaurants operating.

 

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