New World Development (NWD) has moved forward with plans to spin off its Shanghai K11 assets into a real estate investment trust (REIT) listed on the Shanghai Stock Exchange.

The Hong Kong-listed developer said it has received notice of acceptance from the Shanghai Stock Exchange for the proposed spin-off and separate listing of NWD C-REIT.

The REIT will hold Shanghai K11 Art Mall and Shanghai K11 Atelier NWT, two assets wholly owned by New World Development. The group will retain at least a 20 per cent interest in the REIT, with the remaining units to be subscribed for by strategic, institutional, and retail investors.

Despite the proposed spin-off, New World Development will continue to operate and manage the properties, providing operations, property management and related services. The assets will also continue to trade under the K11 brand.

Echo Huang, executive director and CEO of New World Development, said the proposed REIT would be the first among Hong Kong enterprises.

“The establishment of NWD C-REIT demonstrates the strong brand equity of NWD and K11 in the Chinese Mainland market and marks an important milestone in advancing the Group’s asset management and capital deployment capabilities,” she said. 

She added that the transaction would allow the group to unlock asset value, access new sources of capital and redirect resources towards future projects while continuing to benefit from the properties through an asset-light model.

The move is part of New World Development’s broader strategy to recycle capital, improve liquidity and reduce leverage. The group also owns mainland China assets, including Hangzhou K11 Art Mall and the K11 Elysea project in Shanghai.

• Further reading: K11 Musea hits record sales as luxury reboot pays off.