Bloomberg 23-06-2023
https://www.bloomberg.com/news/articles/2023-06-23/commercial-real-estate-reset-is-causing-distress-from-san-francisco-to-hong-kong
From San Francisco to Hong Kong, higher interest rates and falling property values are bringing the commercial real estate market to a perilous precipice.
(..) Unlike landlords in New York and London,
Hong Kong’s can’t blame remote work for the slump. The city’s highly efficient
public transport system and tiny apartments have given residents fewer reasons
to work from home. The city is already back at the office; subway ridership
surpassed 2019 levels in March.
But the commercial market slump in a rising
interest-rate environment still has property owners such as Evergrande in a
tough situation. They can’t refinance buildings because of falling values, nor
can they easily find buyers for them. The choice is to sell at a steep discount
or stomach interest payments. Instead of providing liquidity and stability,
real estate assets have become a burden.
2023-06-28
