New World Development (0017) has received a HK$9 billion bid for its K11 Art Mall in Tsim Sha Tsui from a unit under state-backed China Resources.

The offer was made by CR Longdation, a subsidiary of China Resources Holdings.

The property generates HK$40 million in rental income a month. Combined with the reported bidding price, the purchase could record a return of over 5 percent.

CR Longdation may be the only buyer of shopping malls in Hong Kong, sources said. The state-backed company was also said to have proposed a HK$2 billion bid for a batch of shops at Cityplaza in Quarry Bay, an office and shopping mall complex developed by Swire Properties (1972).

Swire Properties responded that it makes no comment on market rumors.

News of the bids come at a time when Hong Kong's retail market continues to suffer from an ongoing northbound wave of Hongkongers across the border and changed consumption patterns among mainland tourists.

K11 Art Mall , which fully opened in 2009, is one of the landmark buildings at the heart of Hong Kong's shopping district Tsim Sha Tsui.

The property and other malls under the brand K11 feature a combination of luxury and art.

The sale would provide much-needed capital for New World to improve its debt levels, currently the highest among peers.

"The company might need to sell more non-core assets to reduce debt due to high leverage and borrowing costs," said Bloomberg Intelligence analyst Patrick Wong, who added that it will lose rental income as a tradeoff.

The potential transaction could reduce about 4.7 percentage points from its ratio of net debt to shareholders' equity, to 78 percent, Wong estimates.

New World, led by Adrian Cheng Chi-kong, has been offloading its assets to trim leverage for the past few years.

The company had expected to complete the sale of HK$8 billion of non-core assets by the end of June.