Hong Kong's Richest Real Estate Tycoon Back Then, Lost Billions Today, Even the Company Name Has to Change

Image source: Visual China

Text | Yue Jiachen

Editor | Sun Chunfang

Produced by | Prism · Tencent Xiaoman Studio

In March 2026, Central Hong Kong, a negotiation involving trillions of wealth is at an impasse.

On one side are the Zheng family, controlling the old Hong Kong real estate empire New World Development; on the other side is Blackstone Group, the world’s largest alternative asset manager.

Blackstone plans to invest $2.5 billion through a special purpose vehicle to become the largest shareholder of New World Development; while the Zheng family is willing to inject $1 to $1.5 billion for self-rescue but is firmly opposed to relinquishing control of the real estate empire built by their father, Zheng Yutong.

In May 2025, New World Development experienced its first debt default. To repay debts, over the past year, rumors of asset sales—from Shanghai Huaihai Middle Road K11 to Rosewood Hotel Group, and even company equity—seem to signal that any asset with potential for sale might be put on the market.

The outcome of this game with Blackstone not only concerns the fate of this historic business empire but also impacts the future of Hong Kong family businesses.

Rise and Fall of the Zheng Business Empire

Victoria Harbour’s K11 MUSEA art shopping center, a landmark blending art and commerce, witnesses the rise and fall of the Zheng family over more than half a century.

The story begins with Zheng Yutong, born in 1925 in Shunde, Guangdong. In the 1940s, Zheng Yutong moved to Macau, apprenticing at his father-in-law Zhou Zhiyuan’s Chow Tai Fook jewelry store.

With keen business instincts and boldness, he started as a small apprentice in a jewelry shop and gradually built a business empire spanning jewelry, real estate, hotels, and department stores.

In 1956, at age 31, Zheng Yutong officially took over Chow Tai Fook, but his ambitions extended further. In the 1970s, he entered Hong Kong’s real estate market, founding New World Development.

At that time, Zheng Yutong developed iconic projects such as the Hong Kong Convention and Exhibition Centre, New World Centre, and Sogo Department Store in Tsim Sha Tsui. By 1990, his personal assets were estimated at HKD 13 billion, making him one of Hong Kong’s “Four Heavenly Kings” of real estate.

In September 2016, Zheng Yutong passed away in Hong Kong at age 91. He left behind a vast business empire and over HKD 200 billion in family wealth. After his death, his eldest son Zheng Jiachun inherited the family business leadership, becoming the new generation head.

However, just nine years later, this business empire plunged into a severe debt crisis.

On December 31, 2024, New World Development released a shocking interim financial report. Data showed total group borrowings of HKD 146.488 billion, with HKD 32.21 billion due within a year, while cash and bank deposits amounted to only HKD 21.418 billion. This means short-term debt coverage by cash was only 66.49%.

Regarding leverage, the group’s net debt ratio rose to 57.5%, far exceeding the traditional 30% safety line for Hong Kong property companies.

On May 30, 2025, New World Development announced that four perpetual securities issued by its subsidiaries would defer distributions, involving up to USD 3.4 billion. This was the first debt default since the company’s listing.

Profit-wise, in the second half of 2025, New World Development’s revenue fell 50% year-on-year to HKD 8.391 billion; core operating profit dropped 18% to HKD 3.636 billion; and shareholder attributable loss was HKD 3.73 billion.

Over the past two and a half fiscal years, this once “wealthy giant” of Hong Kong real estate recorded cumulative shareholder losses exceeding HKD 31.8 billion.

The company explained the revenue decline as due to reduced construction income and fewer property deliveries in Mainland China.

The decreased sales mainly stemmed from the Mainland market. Management mentioned at the earnings conference that the first half of the fiscal year saw HKD 10.3 billion in sales in Hong Kong, the highest since 2021, while Mainland sales only reached HKD 3.2 billion.

At the same conference, management emphasized that reducing overall debt was the company’s top priority.

The Heavy Burden of Trillions in Debt

What caused New World Development’s debt crisis?

The deeper reason may lie in the Zheng family’s aggressive expansion strategy.

After Zheng Yutong’s grandson Zheng Zhigang took over in 2016, he proposed bold transformation strategies. He founded the K11 brand, blending art and commerce, and expanded large-scale projects in Shanghai, Guangzhou, Wuhan, and other first-tier cities; simultaneously, the group made substantial land acquisitions in Mainland China, planning to invest about HKD 10 billion within a year.

At that time, many Hong Kong developers, such as Cheung Kong and Henderson Land, began to shrink. But New World chose to increase its holdings.

In that year, New World’s subsidiaries and Chow Tai Fook jointly acquired land in Qianhai Guiwan, Shenzhen, for HKD 4.207 billion, and in December, partnered with China Merchants Shekou to buy the Prince Bay area in Shekou for HKD 8.9 billion.

In July and August 2019, New World invested a total of HKD 13.8 billion over four days in Hangzhou, Ningbo, and other cities, including “land king” projects.

Additionally, New World announced plans to spend HKD 2 billion on land acquisitions in Mainland China and began to intervene in projects in Shenzhen Longgang, Xili Xinwei, Guangming Guangqiao Food Factory, and old districts in Haizhu and Zengcheng, Guangzhou.

Reviewing its past financial reports, by the end of 2016, New World’s land reserves in Mainland China peaked at 1.1 million square meters, with residential floor area reaching 5.7 million square meters. These large investments laid the groundwork for later difficulties.

In response to the debt crisis, New World adopted a “seven-pronged debt reduction” strategy: selling development projects and non-core assets, unlocking farmland value, increasing rental income, cutting costs, suspending dividends, and strengthening financial management.

In recent years, the company has been constantly seeking funds. In September 2024, it secured a HKD 5.9 billion loan led by Deutsche Bank. To obtain this financing, New World mortgaged its core assets—Victoria Harbour Cultural Centre—including Tsim Sha Tsui’s K11 MUSEA and the Rosewood Hong Kong hotel, with first priority.

In November 2025, New World launched an urgent USD 1.9 billion bond exchange offer. However, only 71.7% of bondholders participated.

These measures, however, seem insufficient to address the fundamental issues. Market expectations suggest that New World may ultimately need a more thorough restructuring—selling core assets, bringing in strategic investors, or even relinquishing control.

Beyond financial difficulties, succession battles are also a concern.

After Zheng Yutong’s death, his eldest son Zheng Jiachun took over leadership. But Zheng’s four children—eldest daughter Zheng Zhuwen, eldest son Zheng Zhigang, second son Zheng Zhiming, and third son Zheng Zhilang—have gradually entered the family business, each responsible for different sectors.

Zheng Zhuwen oversees Chow Tai Fook Jewelry and Rosewood Hotel Group, having driven the expansion of Chow Tai Fook in Mainland China; Zheng Zhigang, former CEO of New World, is the founder of K11; Zheng Zhiming and Zheng Zhilang serve as co-CEOs of New Creation and co-CEOs of Chow Tai Fook Enterprises, respectively.

On the surface, this appears to be a clear division of responsibilities within a family governance structure. But in reality, balancing power is challenging.

On September 26, 2024, New World announced Zheng Zhigang’s resignation as CEO, replaced by professional manager Ma Shaoxiang.

Subsequently, Zheng Zhuwen joined the company’s nomination committee, marking a new governance phase. Zheng Zhigang chose to start anew, founding the Hong Kong-based conglomerate ALMAD Group.

“This seemingly fragmented arrangement may reflect strategic differences within the Zheng family,” commented a Hong Kong investment industry insider.

Blackstone’s Strategy

For Blackstone, this might be a once-in-a-lifetime opportunity.

Blackstone’s proposed investment plan implies that the Zheng family will lose control of New World Development. For a family that has held onto this empire for over half a century, it’s undoubtedly a difficult choice.

As the world’s largest alternative asset manager, Blackstone manages over USD 900 billion. It specializes in acquiring undervalued assets during market downturns. Assets under its control include Hong Kong’s Convention and Exhibition Centre, K11 malls, Guangzhou Chow Tai Fook Financial Center, and others—all attractive targets.

Blackstone plans to increase its stake through a combination of “cash subscription for new shares + transfer of old Zheng family shares,” potentially exceeding 30%. This would make Blackstone the largest shareholder, reducing the Zheng family’s stake to below 15%.

For the Zheng family, this means losing control of the real estate empire built by Zheng Yutong.

They are seeking solutions that can ease debt while preserving control; meanwhile, Blackstone aims to acquire maximum control at minimal cost.

The Zheng family’s predicament reflects a broader challenge faced by Hong Kong’s family businesses.

Hong Kong’s “Big Four” families—Li Ka-shing, Kwok family, Lee Shau Kee, and Zheng Yutong—rose during Hong Kong’s golden era of economic growth, accumulating vast wealth through real estate, infrastructure, and utilities.

In recent years, as Hong Kong’s economy shifts and Mainland China’s rise accelerates, these families face unprecedented challenges.

New World is only part of the Zheng family’s assets. The group also includes Chow Tai Fook Jewelry, New Creation Group, Chow Tai Fook Enterprises, and others. Industry insiders note that balancing interests across different sectors, managing family power dynamics, and maintaining competitiveness amid rapid market changes are key issues the Zheng family must address.

For Hong Kong’s real estate industry, New World’s story may just be the beginning. Under market adjustments and industry transformation pressures, more companies could face similar predicaments.