Hong Kong property: fire sales dominate 1st-half commercial deals as debt weighs on owners
- Distressed commercial property sales made up HK$16.8 billion, or 73 per cent of the total deal value, in the first half, versus 10 per cent in previous years, CBRE says
![Creditors of China Evergrande sold a luxury house owned by the developer’s founder in May to recover debt. Photo: Handout](https://cdn.i-scmp.com/sites/default/files/styles/1020x680/public/d8/images/canvas/2024/07/08/063147e5-9aaa-4e07-9d5b-c85cf872662a_d5312a53.jpg?itok=eNg8nWU8&v=1720445408)
Sales of distressed commercial real estate in Hong Kong jumped in the first half of the year, accounting for about three quarters of the volume, with the coming months likely to see an unusually high number of such transactions, according to CBRE.
In the first six months of the year, overall commercial property deals amounted to HK$23.1 billion (US$2.95 billion), the second-lowest half-year total since the second quarter of 2008, CBRE said. Fire sales accounted for HK$16.8 billion or 73 per cent of the total investment in the period. The data encompassed commercial property deals each valued at more than HK$77 million.
“In the second half, there will be something like 50 per cent of [distressed sales] because interest rates are still at a high level and a rate cut is unlikely to happen earlier than September,” said Reeves Yan, executive director and head of capital markets at CBRE Hong Kong.
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