How many Guangzhou urban redevelopment projects with a total investment of 36 billion yuan are still in the hands of Hong Kong's Cheng family?

When the tide of era-driven dividends recedes, what exactly is left on the shore: rare valuable assets or utter chaos?

Recently, market sources indicate that the Cheng family of Hong Kong has withdrawn from the Nanji old renovation project in Haizhu District, Guangzhou, a project they once regarded as one of their "high gross margin" assets.

In 2021, New World China, under the Hong Kong Cheng family, won the old renovation project of Lianxing Village (Nanji Community and Dongfanghong Community) in Haizhu with a total planned investment of about 4.771 billion yuan. At that time, the market interpreted this move as a landmark action by Adrian Cheng, the third generation of the Cheng family, to heavily bet on the Guangdong-Hong Kong-Macao Greater Bay Area and Guangzhou's urban renewal.

Looking back on the period from 2019 to 2022, Adrian Cheng aggressively bottom-fished Guangzhou's old renovation projects, securing five major projects in Lishan Village of Liwan, Nanji of Haizhu, Xiajie of Zengcheng, Dagangwanggang of Tagang, and the urban renovation of Guangdong Second Provincial General Hospital, with a total investment of over 36 billion yuan, making it the Hong Kong-funded real estate enterprise with the largest number of old renovation projects laid out in Guangzhou for a time.

Unexpectedly, only a few years later, the situation has completely reversed.

Historical Retrospection

From entering the market full of ambition to leaving quietly, old urban renovation is like a long-term game intertwined with multiple factors including capital, market and policies.

Any large-scale old renovation project was once highly expected by the market. The Nanji old renovation project belongs to Lianxing Village in Haizhu District, Guangzhou, covering two economic cooperatives of Nanji and Dongfanghong. It is located on the golden shoreline of the post-channel of the Pearl River, facing Guanggang New Town across the river, and is the core leading plot of Haizhu Innovation Bay designated by the local government.

According to the 2021 transaction announcement, the total land for renovation of this project is 21.3 hectares, with a total existing floor area of 331,400 square meters and a total planned floor area of 650,000 square meters. The renovation scope covers 1,079 villager households, making it the second largest old village renovation project in Haizhu District by investment scale that year.

Although the project has spanned nearly eight years from the preliminary preparation of the area to the change of the renovation subject, in fact, villagers fully support the old renovation, and the preliminary work was carried out very smoothly, which can be called one of the old villages with the most smooth promotion process in Haizhu.

In August 2018, the collective vote of Lianxing Village passed the intention of comprehensive renovation, with 98% of villagers agreeing to launch the old renovation; in April 2019, the Nanji Community and Dongfanghong Community held separate old renovation voting meetings at the same time, agreeing to select New World China as the intended cooperative enterprise for the old renovation; in May, the two sides formally signed the cooperation intention agreement for the old village renovation.

At that time, villagers trusted New World extremely. On August 15, 2021, Lianxing Village announced that only one applying enterprise, New World China, passed the qualification review and became the candidate cooperative enterprise for the village's old renovation project; on August 22, New World China obtained an approval rate of about 80% from the Lianxing Nanji Economic Cooperative, and became the official cooperative enterprise of the old renovation project of Lianxing Village in Haizhu District.

At that time, the bidding document mentioned that the winner must strictly implement the task nodes of the whole renovation cycle, ensure the start of construction of resettlement housing before December 31, 2025, and basically complete the construction of resettlement housing before December 31, 2030.

However, up to now, this old renovation project has only completed the regulatory detailed planning approval of the area.

The game over the demolition and compensation scheme is the most direct and heavy capital burden in old renovation. Nanji adopts the village-enterprise cooperative renovation mode, and there is no unified government template for the compensation standard, which all needs to be passed by the villagers' congress vote.

In June 2024, the detailed planning of the area was reviewed and approved by the Municipal Planning Commission, but the schemes for resettlement, temporary relocation allowance and property replacement kept deadlocked. Villagers had obvious differences on the share of commercial properties and the standard of resettlement house types, and the schemes were revised for many times but failed to pass the vote, which directly delayed the approval progress of the implementation plan.

At the same time, Lianxing Village released the latest regulatory detailed planning, splitting the original commercial and financial land, adding two pure residential plots facing south to the river without high-rise obstruction, increasing the land for public management and public service facilities and park green space, and optimizing the road traffic.

The planning document also clarified the development orientation and renewal goals, focusing on the two major directions of "flexible intelligent manufacturing + producer services", and prioritizing the development of industries such as "high-end manufacturing of intelligent terminals, artificial intelligence, and biotechnology".

Although on the surface the value of commercial residential properties in the area has increased significantly, in fact, it has deviated from New World's original aspiration -- to build a riverside art and finance complex relying on the operational advantages of K11 commercial and K11 ATELIER office buildings, which greatly reduced the brand value.

At this point, even if New World has enough capital to continue the stalemate, it is better to let go and make a concession.

Exclusive Favor for the Greater Bay Area

Regarding the old renovation planning, Huang Shaomei, then Director and Deputy Chief Executive of New World China, emphasized many times that the group will still be based in the Greater Bay Area in the future, but mainly focus on advantageous development areas that can accommodate the Rosewood Hotel and K11 brands.

As early as June 2018, Adrian Cheng said that he would invest about 20 billion yuan to expand the land reserve in the Greater Bay Area, "especially in some areas such as Guangzhou, Foshan and Dongguan, we will carry out urban old village renovation, and vigorously add about 8 to 10 projects."

As for why he made such a large-scale layout in the Greater Bay Area, Adrian Cheng also gave the answer at the performance meeting that year. He said that the gross profit margin of New World China in the mainland was as high as 60%, and the gross profit margin of the Greater Bay Area even reached 73%.

Therefore, from 2019 to 2022, Adrian Cheng took five major projects in Guangzhou at one go: Lishan Village of Liwan, Nanji of Haizhu, Xiajie of Zengcheng, Dagangwanggang of Tagang, and the urban renovation of Guangdong Second Provincial General Hospital, with a total investment of over 36 billion yuan and a total planned floor area of over 2.7 million square meters.

Among them, the old renovation project of Lishan Village in Liwan has a total investment of 10.79 billion yuan and a floor area of 1.75 million square meters. It is the first large-scale complex renovation project of old factories and old villages in the core area of Guangzhou; while the total investment of the old renovation project of Xiajie Village in Zengcheng is also nearly 7 billion yuan.

These old renovation projects also became the reassurance for Adrian Cheng under the double impact of the social incidents in Hong Kong and the COVID-19 epidemic at that time. At the 2020 fiscal year interim performance meeting, Adrian Cheng said: "These high gross margin old renovation projects are expected to be released in 2022-2023." Therefore, he was not worried about the subsequent performance.

But the gap between ideal and reality is often tiny but huge. As of August 2026, New World has substantially withdrawn from 3 of the 5 old renovation projects in Guangzhou, 1 project is stagnant and slowed down, and only the Dagangwanggang project in Zengcheng Tagang is operating normally.

Lishan Village in Liwan is the first old renovation project that New World withdrew from in Guangzhou -- it completely withdrew in 2024, and handed over the project to the state-owned enterprise Huadihe Urban Construction to promote it with the land development model. The original Hong Kong-style industry-city planning was fully adjusted, only the regulatory detailed planning of partial plots was completed, and there was no sign of large-scale construction.

The old renovation project of Xiajie Village in Zengcheng also quietly withdrew in 2024. Due to no progress in the negotiation on villagers' compensation, the project only stays at the stage of area planning, and no new developer has taken over so far.

As for the only progressing project, the Dagangwanggang project in Zengcheng Tagang, the residential part New World Starry was launched in 2021, becoming the only on-sale project of New World's Guangzhou old renovation. However, according to the Sunshine Home website, as of the press time in August 2026, 1021 residential units have been sold, 2124 units are unsold, and the inventory backlog is serious.

From exclusively winning the core riverside Nanji old renovation project to withdrawing from a number of Guangzhou main city renewal projects, the exit of New World China is just a microcosm of real estate enterprises' strategic focus under the market adjustment cycle.

At the end of June 2025, New World completed the resolution of the huge HK$88.2 billion debt crisis. The management explicitly required to reduce the leverage of mainland assets and strictly control the investment in long-cycle, high-advance-payment old renovation projects; during the 2025 fiscal year (July 1, 2024 - June 30, 2025), the group concentrated on selling the equity of multiple office buildings, commercial properties and urban renewal projects in the mainland, recovering more than HK$12.8 billion.

In recent years, mainland sales have fallen short of expectations, and the return of funds from old renovation projects has further failed.

In the 2025 fiscal year, New World China's mainland contract sales reached 14 billion yuan, of which the Greater Bay Area (southern region) contributed about 52%. Although it rebounded from 12.5 billion yuan in the previous fiscal year, the mainland contract sales in the first half of the 2026 fiscal year (July 1, 2025 - December 31, 2025) directly halved, down 57% year-on-year to 4.3 billion yuan.

At the same time, New World's land reserve in the mainland is also shrinking simultaneously, from 6.67 million square meters at its peak in 2019 to only 2.89 million square meters at the end of 2025, a reduction of nearly 60%.

Although old renovation can achieve high gross margin returns through low land prices, it is actually like a money bag with water leakage: the longer it drags on, the less you can get, and even the more you consume, the more you lose.

This article is from the WeChat official account "Vision", author: Vision New Media, published with authorization from 36Kr.