Hong Kong Property Woes Weigh on Schroders as Banks Seize Assets
(Bloomberg) – Schroders PLC has become the last global asset manager captured by Hong Kong’s commercial property melting.
Within a few months, two assets managed by the Real Estate Investment Branch were seized by bank creditors.
Now faces a new challenge for a loan for a three -storey commercial area at the Harbourfront point in the Hung Hung Hung Hung region of Hong Kong. The facility was not repaid on the original maturity date. The lender, Bank of Communication (Hong Kong) Ltd., according to people familiar with the issue, weighing various options for the loan, including potentially requesting to repay immediately and then implementing it. The final decision was not made.
Schroders’ losses underline the increasing tension of global companies from Hong Kong’s Slumping real estate market. Like many other financial sponsors, Schroders are also using special purpose tools to act as a debtor for credit against Hong Kong property assets. When the problems arise, the main option of the loans is to seize the underlying guarantee, even if it does not cover the unpaid debt.
In recent months, some bank creditors have put pressure on firms in the city that owed property in the city because they have seen several signs of healing in the market and are willing to evacuate problematic assets. According to Hong Kong government data, it fell by 48% and 39%, respectively from the highest levels of the average office buildings in the city and the retail areas in the city, respectively, respectively, and eroded the value of the collateral supporting many bank facilities.
Schroders’ three-problem presence was a part of the Pamfleet portfolio, which the company bought in 2020, a pressure on Covid-19 pandemia and social unrest in Hong Kong. Pamfleet had $ 1.1 billion in the management during the purchase and said Schroders would add expertise in the Asian real estate market.
However, according to people who knew the issue, the cash flow produced by property was below expectations.
The first property of the three problems was Nate, a servant apartment tower in the TSIM Sha Tsui region, which entered the buyer in July. A buyer then agreed to pay $ 272 million HK for the asset. The occupancy in Nate fell during the 2019 protests in Hong Kong and said it was not gathered between the city’s economic challenges.
A Schroders spokesman said that Nate’s sale is progressing and that the company has provided a lease agreement for three times the Harbourfront turning point, but refused to comment more on other issues. The communication bank did not respond to the request for comments.
In August, the bank creditors appointed buyers for another asset in the Worfu Mall portfolio in the North Point region, according to company registrations. The shopping center was used as a guarantee for $ 1.5 billion HK, which was supported by Schroders and Chelsfield Asia Fund 1, which was default earlier this year. The shopping center was launched in January, but no agreement was reached.
In 2018, the initiative paid $ 2 billion HK for the shopping center around the city’s commercial property explosion, at that time, over 88% of the valued value. The Fund spent about $ 250 million HK on the renovations of the property by aiming to increase rent prices. The work ended in 2020 just as pandema was kept.
While the real estate market in Hong Kong continues to stop, Brian Wong, Director of Quantuma International, a restructuring and bankruptcy services consulting company, said that his company has been investigating the potential receiving appointments.
Uz We expect more execution to take place in the next six months, ”he added.
-Help from ECHO Wong and Zheng Li.
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