New World Development Co. is seeking to sell its flagship 11 Skies mall to address liquidity constraints, according to people familiar with the matter. 

The company has held early-stage discussions with the Hong Kong airport authority on its plans, the people said, requesting not to be named because the matter is private. The talks are preliminary and subject to change, the people said.

The mall has been evaluated at a price range of HK$15 billion ($1.9 billion) to HK$17 billion, one of the people said. That means selling at a loss considering the company invested HK$20 billion for the project.

The company and the airport authority didn’t immediately respond to requests for comment.

The development of the 11 Skies mall has become a drag on New World, hampered by sluggish tenant sign-ups and concerns over weak foot traffic — fueled in part by uncertainty around airlines’ willingness to shift flights to Hong Kong’s second airport terminal next to the complex. 

Facing liquidity pressure, New World Development is accelerating asset sales — including in mainland China — as it rushes to shore up its balance sheet. The company is also seeking to raise as much as $2 billion through a new loan facility, backed by its crown jewel, the Victoria Dockside complex in Hong Kong, underscoring the urgency of its capital-raising efforts.

New World missed its self-imposed target to complete the $2 billion loan deal, people familiar said earlier this week.

The company had HK$50 billion in completed investment properties in mainland China as of Dec. 31, according to Bloomberg Intelligence. Its prospects for selling the assets are clouded by the country’s ongoing real estate downturn and slowing economy. 

In Shanghai, the company is seeking 2.85 billion yuan ($397 million) for its K11 tower, according to a property agent brochure. 

Controlled by the family empire of Hong Kong tycoon Henry Cheng, New World has one of the highest debt burdens of any big developer in the city. Its net debt reached 95.5% of shareholders’ equity as of December, according to Bloomberg Intelligence. 

The funding environment for troubled and small Hong Kong developers has become increasingly challenging given that property prices in the city are now around a nine-year low. Banks are demanding stricter refinancing terms and asking for more credit enhancements. 

The Cheng clan, worth an estimated $21 billion as of March, proposed a semi-bailout to New World about two years ago, when it offered to take a subsidiary private and give the developer about HK$21.7 billion. The firm reported its first annual loss in 20 years for the 12 months ended June 2024. 

Adrian Cheng, the eldest son of the family’s patriarch Henry Cheng, stepped down as chief executive officer soon after that, and he left the board recently. The Cheng family also owns a stake in Chow Tai Fook Jewellery Group Ltd. Adrian Cheng’s siblings include Sonia Cheng, who looks after the Rosewood Hotel and co-leads the jewelry business.