The "Succession Battle" in Hong Kong's Real Estate Industry: Can the Third Generation Take Over?-Part 2

What Retail Businesses Do Real Estate Giants Own?

The Lee Shau Kee family built its fortune entirely on real estate. Its flagship project under Henderson Land is The Henderson in Central, designed by Zaha Hadid Architects. Henderson Land mainly focuses on residential properties, with retail assets like Metro City and Sha Tin Plaza, which cater to mass-market consumers. Its mainland retail presence is minimal, with only a few properties like Henderson Celebrity Shopping Center and Beijing Global Financial Center.

The Pao Yue-kong and Robert Kuok families have a much stronger retail presence than the Lee family. Pao, originally known as the “Shipping King,” entered real estate in the 1980s by acquiring Wharf Holdings and Wheelock & Co. Today, the Pao family’s retail empire is driven by Wharf, which owns Harbour City in Tsim Sha Tsui and Times Square in Causeway Bay—two of Hong Kong’s most iconic luxury shopping malls. In mainland China, Wharf operates IFS (International Finance Square) in Changsha, Chengdu, and Chongqing, with further expansion into Suzhou. The family also holds shares in the luxury department store Lane Crawford.

The Robert Kuok family, representing Malaysian-Chinese business success in Hong Kong, built its empire on sugar trading, earning Kuok the title of “Asian Sugar King.” Today, the family runs Kerry Group, a diversified conglomerate spanning food, real estate, hotels, and shipping. Its flagship retail brands include Kerry Centre and Kerry Parkside.

The Chan Tseng-hsi family started in construction before founding Hang Lung Group in the 1960s and moving into real estate. Hang Lung Plaza has since become one of China’s most influential luxury retail brands, with locations in Shanghai, Shenyang, Jinan, Wuxi, Tianjin, Kunming, Dalian, Wuhan, and Hangzhou.

Can Real Estate Giants Successfully Pass Their Wealth to the Third Generation?

In the race for third-generation leadership, Adrian Cheng was both the first to enter and the first to exit. In a surprising move, he stepped down as CEO of New World Development, resigned from the boards of Chow Tai Fook and NWS Holdings, and effectively withdrew from the “succession battle.” His position as CEO was handed over to professional manager Marco Mak, marking a significant shift for the Cheng family.

Meanwhile, other third-generation Cheng family members remain involved. Adrian’s cousin, Sonia Cheng, continues to oversee Chow Tai Fook Jewellery as Executive Director and Vice Chairman. Adrian’s brother, Christopher Cheng, was promoted to Co-CEO of NWS Holdings last year. Another cousin, Jonathan Cheng, was appointed Co-CEO of Chow Tai Fook Enterprises in September 2024 (distinct from Chow Tai Fook Jewellery).

At a September earnings conference, Adrian Cheng stated that he would now focus on social initiatives. However, the Cheng family's succession plan remains unclear. Henry Cheng, now 77, has four children and previously hinted in an interview that the “successor is still being observed,” even suggesting that an external candidate might be recruited.

Li Sze-tse, Li Ka-shing’s eldest granddaughter, has maintained a relatively low profile. However, according to Sing Tao Daily, Li Ka-shing has personally mentored her in the succession process and praised her as “obedient and sensible.” Now around 28 years old, Li studied at King’s College London and returned to Hong Kong in 2017 after graduation. Since retiring, Li Ka-shing has focused on his family foundation, where Li Sze-tse has been appointed a board director. She has also joined Express Motor, a subsidiary of CK Asset, signaling her early involvement in the family business—particularly in expanding European operations.

The Li family’s Cheung Kong Holdings has increasingly prioritized European markets, where revenue now accounts for half of the group's total earnings. They have acquired extensive real estate holdings in the UK, and by assigning Li Sze-tse to European affairs, Li Ka-shing demonstrates his determination to expose her to core business operations early on. However, her younger brother, Li Chang-hei, remains another potential successor.

In contrast, the Kwok family (founders of Sun Hung Kai Properties) remains under second-generation control. Among the third generation, Raymond Kwok’s sons, Christopher Kwok and Edward Kwok, serve as executive directors, as does Thomas Kwok’s son, Adam Kwok. However, Walter Kwok’s son, Geoffrey Kwok, has only been appointed as a non-executive director, suggesting that while the third generation is entering the boardroom, the real power still lies with Raymond Kwok. Given that he remains in control and has two sons in executive positions, the future leadership is most likely to emerge from this pair.

So far, only two major real estate families—the Pao Yue-kong family (Wharf Holdings) and the Chan Tseng-hsi family (Hang Lung Group)—have fully transitioned power to the third generation. The Robert Kuok family has yet to introduce any third-generation members into the business.

The Pao family, lacking a male heir, passed its legacy to grandsons. Douglas Woo, son of Pao’s second daughter, Payson Pao, has taken over as Chairman of Wheelock & Co., managing the family’s real estate empire. Meanwhile, Brian Pao, son of the eldest daughter, Marjorie Pao, oversees the family’s shipping business. The Pao family’s succession process was smooth due to its early financial planning, clear wealth distribution, and strong family education, all reinforced through a family foundation.

At Hang Lung Group, the third-generation leader is Adriel Chan, the eldest grandson of founder Chan Tseng-hsi. He succeeded his father, Ronnie Chan, who officially retired in January 2024, resigning from his position as Chairman of Hang Lung Group and Hang Lung Properties. Adriel Chan was immediately appointed Chairman of both companies.

Can the Third Generation Handle the Crisis?

While most of Hong Kong’s real estate groups remain under second-generation leadership, it is only a matter of time before the third generation takes over. However, they face much greater challenges than their predecessors.

The Hong Kong real estate market is in an increasingly painful downturn. New World Development reported a HKD 20 billion loss in 2024, while Hang Lung Group’s mid-year net profit fell by approximately 47% year-on-year.

Compared to the founders—who were pioneers with entrepreneurial ambition and drive—the second generation managed to stabilize assets under their parents’ close supervision. However, the third generation is largely detached from the founders’ influence, and having grown up in privileged environments, they often lack a strong sense of crisis management.

Most Hong Kong real estate conglomerates remain family-run businesses, relying on the founders' reputation, personal networks, and strategic vision. According to Professor Fan Bohong of the Chinese University of Hong Kong Business School, family businesses tend to lose up to 60% of their value during generational transitions.

In Asia, a company’s value is often strongly tied to the leader’s identity and vision, meaning that when investors sense a leadership change, they often exit. This structural challenge—rooted in the nature of family-run enterprises—will continue to complicate succession planning, ensuring that the third generation’s rise to power will be anything but straightforward.

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