Mega-collector Adrian Cheng has stepped down as CEO of one of Asia’s leading property development firms after recent reports of the company’s financial woes. A third-generation scion of one of Hong Kong’s wealthiest families, the 44-year-old is well known for his creation of the K11 brand that fuses art and culture with commerce.
Cheng said he will focus on public services after leaving his executive vice-chairman and CEO roles of New World Development (NWD), the Hong Kong-listed property developer founded by his late grandfather Cheng Yu-tung. The move comes as the company, one of the region’s biggest real estate groups, posts its first annual loss in more than 20 years.
“Life should be a continuous process of learning and fully utilizing one’s strengths,” Cheng said at NWD’s annual results media briefing today. “After serious consideration, I have decided to devote more time to public services and to continue to serve Hong Kong and the motherland.”
He noted that he tendered his resignation a few weeks ago to his father Henry Cheng, chairman of NWD. “I am glad that my father is supportive and respects my decision,” he said.
A major figure in Hong Kong and Asia’s art world, Cheng is known for his passion for culture, showcasing contemporary artworks at his shopping malls and properties under his “cultural commerce” concept. He is also a patron of many art and cultural institutions around the globe. He founded the K11 Art Foundation and supports several major international institutions, including MoMA PS1 and the Metropolitan Museum of Art in New York, Centre Pompidou in Paris, and the Royal Academy of Arts and Tate in the U.K. His K11 Art Foundation will be co-hosting an event with Serpentine in London on October 7 during Frieze week.
Adrian Cheng and gallerist Jeffrey Deitch attend the opening night of City as Studio at K11 MUSEA on March 19, 2023 in Hong Kong, China. Photo: Keith Tsuji/Getty Images for K11.
He’s currently chair of the Mega Arts and Cultural Events Committee, advising the Hong Kong SAR government’s funding for major international events staged in the city, such as as Art Basel, Art Central, and Shanghai Art021’s Hong Kong edition, which debuted in August. Cheng was seen attending one of its opening events. He also leads the Hong Kong Academy for Wealth Legacy which helps to develop and promote the city as a hub for the world’s wealthiest.
Cheng will keep the K11 brand—for a price. According to NWD’s company filings, AC Group, a company directly and wholly-owned by Cheng, will purchase five companies from NWD, including three carrying the K11 brand, as well as the K11 rights for HK$209 million ($26.87 million). NWD continues to be the asset owner of all K11 properties, including K11 Art Mall and K11 Musea in Hong Kong, while AC Group will become the asset operator of these properties.
The restructure aims to reposition NWD’s core business, the developer said. Cheng will remain as NWD’s non-executive vice-chairman and will continue to advise on K11’s business strategies. NWD has appointed former Hong Kong government official Ma Siu-Cheung as its CEO.
The firm did not respond to request for comments on the future of K11’s art endeavors before publication time.
NWD has reportedly been embroiled in financial troubles, suffering from HK$20 billion ($2.6 billion) loss. There were also reports of selling the company’s K11 Art Mall, the outlet that Cheng founded to launch the K11 brand in 2009. NWD declined to comment on the reported sale of K11 Art Mall. The company has other K11 properties across China, such as Shanghai K11, and K11 ECOAST in Shenzhen, a $1.4 billion development which is expected to open towards the end of this year.
At the media briefing, Cheng clarified that company did not lose HK$20 billion in cash, but rather provisions that were one-off, non-cash. He said the company recorded a core profit of HK$6.9 billion ($887 million), 18 percent down year-on-year. The company said it records a loss attributed to shareholders at HK$19.7 billion ($2.5 billion) in the financial year 2023/24.
K11 Art Mall in Tsim Sha Tsui. Photo: K. Y. Cheng/South China Morning Post via Getty Images.
The eldest son of the family’s third generation, Cheng has been a high-profile public figure since he joined NWD in 2007 as executive director after working as a banker at Goldman Sachs and UBS. The Harvard graduate has more than 132,000 followers on his Instagram and has been seen socializing with international celebrities such as Pharrell Williams, American hip-hop star and Louis Vuitton’s menswear creative director, with whom he teamed up to stage the French brand’s first men’s pre-fall 2024 fashion show at his property K11 Victoria Dockside. He also befriended Taiwan pop star and collector Jay Chou, singing a duet with the celebrity at his 2023 concert in Hong Kong, as well as the K-pop outfit Blackpink. His malls are notable for displaying a diverse range of artworks by all-star artists ranging from Hong Kong’s Samson Young to American artists Sterling Ruby and John Baldessari.
But behind the high-profile persona, Cheng appeared to be conscious about his actions. “People criticized me, saying that the art was not good enough, questioning if I was profiting from art-market speculation, or using art to increase the value of the property,” Cheng said in an interview with Artnet News in 2019. “It’s important to take note of what other people say, so that you can become better. I started the K11 Art Foundation in 2010—sincerely, authentically—to promote art.”
In addition to art, Cheng also supports cultural development, such as the preservation Chinese handicrafts guangcai, or Chinese porcelain painting, and the restoration of the historic State Theatre in Hong Kong. In 2022, he was awarded Officier de l’Ordre National du Mérite by the French government in recognition for his contributions to arts and culture.
However, NWD’s financial troubles and Cheng’s fate have placed have placed the family’s drama in the spotlight. Last year, his father Henry Cheng, who has an estimated net worth of $17.7 billion according to Bloomberg, told the media that he was still in search of a successor. A recent Financial Times report noted that Adrian Cheng was handpicked by his grandfather to succeed the business, citing sources, but that did not stop the news about his replacement spreading ahead of Thursday’s announcement. When asked about the rumor on Wednesday, his younger brother Brian, who was recently appointed to be the co-CEO of the family’s other company CTF Services Limited, said, “If I did not do a good job, it would be normal to replace me.”
From left to right, Adrian Cheng, singer Pharrell Williams, and a guest attend the celebrating party of The Jewelry of Lorraine Schwartz, “Arts In All Its Forms” at Artus on March 24, 2019 in Hong Kong, China. Photo: Visual China Group via Getty Images/Visual China Group via Getty Images.
Local and regional art-world insiders have divided opinions about Cheng’s move. Some thought that the public display of family feud was unnecessary, suggesting that the market turmoil since the lockdowns played a role in the business’s lackluster performance. Others suggested that his conspicuous persona may be an issue for the family’s business.
Some art workers believed that this may signify an end of an era, worrying that K11 may tighten its purse strings on funding for art projects and other property developers may follow suit amid economic difficulties in China. The news may also impact younger generations of Asia’s wealthiest families who may be considering supporting the arts.
“As a descendent of one of Asia’s prominent families, Adrian indeed has a lot of ideas. However, balancing art with commercial metrics, such as shopping mall sales conversion rates, remains a challenge in Asia,” said art advisor Gladys Lin. “Whether the values and tastes of the new wealthy class can keep up is still uncertain.”
She added that she hopes “to see more entrepreneurs with a vision like Adrian’s, continuing to influence Asia’s new wealthy class, to help to integrate art into everyday life rather than viewing art collecting as an investment or a tool for profit.”
Ongoing projects such as the restoration of State Theater is not yet affected, sources said.