New World Department Store China Limited (NWDS China) has executed two new framework agreements effective 1 July 2026, subject to independent shareholders’ approval at an upcoming EGM:
1. 2026 Master Leasing Agreement with major shareholder New World Development Company Limited (NWD). 2. 2026 Master Services Agreement with Mr. Doo Wai-hoi and his associated Services Group.
Key terms and financial metrics:
Leasing Framework • Scope: Ongoing and future leases of premises and related services between NWDS China and NWD Group. • Tenor: 1 July 2026 – 30 June 2029, with automatic three-year renewals. • Caps (RMB): – Fixed Lease Payments: 417.00 million (FY27), 389.00 million (FY28), 369.00 million (FY29). – Variable Lease & Service Payments: 119.00 million, 127.00 million, 137.00 million. • Historical lease outflows as lessee: 146.68 million (FY24), 62.54 million (FY25), 3.69 million (1H FY26) for fixed payments; 86.43 million, 73.62 million, 30.30 million for variable components. • Rationale: Maintain store locations within NWD premises and consolidate all future lease dealings under a single framework.
Services Framework • Scope: Contracting, cleaning, landscaping, property management and related services between NWDS China and the Services Group. • Tenor: 1 July 2026 – 30 June 2029, with automatic three-year renewals. • Caps (RMB): 68.00 million (FY27), 58.00 million (FY28), 57.00 million (FY29). • Historical service transactions: 13.91 million (FY24), 0.13 million (FY25), nil (1H FY26). • Purpose: Streamline recurrent service arrangements and reduce administrative overhead through a common agreement.
Regulatory & Governance • Both agreements are classified as continuing connected transactions under Chapter 14A of the Hong Kong Listing Rules. • All applicable percentage ratios exceed 5% and HK$10 million thresholds, triggering disclosure, annual review and independent shareholders’ approval requirements. • NWD and its associates will abstain from voting on the leasing resolutions; Mr. Doo and his associates will abstain on the services resolutions. • An Independent Board Committee and Ballas Capital Limited (independent financial adviser) have been appointed to evaluate the terms and caps. • The circular is scheduled for despatch on or before 4 June 2026.
Internal Controls NWDS China has outlined multi-layered controls—including quote benchmarking, transaction monitoring, biannual internal audits and annual external reviews—to ensure pricing remains on normal commercial terms and annual caps are not breached.