Hong Kong property: fire sales dominate first-half deals as debt stress weighs on owners

“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.

In May, a 5,171 sq ft mansion, 10B at Black’s Link on The Peak, linked to Hui Ka-yan, the founder of the liquidated China Evergrande Group, was sold by creditors to a privately owned company for HK$448 million. The amount was 44 per cent less than the HK$800 million that appraisers had estimated the property to be worth.

One HarbourGate East Tower in Hung Hom, one of the many assets seized last year from Chinese tycoon Chen Hongtian, has been put on sale for a second time amid weak office market sentiment.

Receivers put the tower back on the market for a new round of bidding, according to a statement last week by Savills, the sole agent for the sale.

The prime harbourfront property was valued at around HK$7 billion in 2022, Savills said when it was first put on the market in May 2023. The property was bought for HK$4.5 billion in 2016.

Other market observers noted that with interest rates remaining higher for longer, more distressed transactions were likely and banks would be pressed to start seizing assets to satisfy debt obligations.