By South China Morning Post | Created at 2025-03-17 02:31:24 | Updated at 2025-03-17 07:06:47
4 hours ago
Hong Kong property investment firm Gale Well Group is set to offload assets worth around HK$3 billion (US$386 million) amid banks’ wary attitude towards the real estate market, according to the firm’s founder.
“Many banks have looked down on the property market and kept on calling investors’ loans,” said Jacinto Tong Man-Leung, the firm’s founder, vice-chairman and CEO. “As a result many investors are in a very bad financial situation and have to sell some of their properties at a price lower than the market price.”
As rental incomes sink and valuations shrink, more property owners are struggling to meet their debt obligations amid high rates, leading to a surge of distressed assets. In 2024, roughly three out of four property transactions were distressed sales, according to Reeves Yan, executive director and head of capital markets at CBRE.
In addition to calling loans – demanding immediate repayment – banks are also adjusting mortgages on commercial buildings to narrow loan ratios, Tong said. “They want you to top up the difference, as prices have dropped, or they would ask you to put down enough for six to 12 months of principal and interest,” he said.
While Gale Well had not had any loans called, “we must comply with the bank’s borrowing ratio”, Tong said.
Gale Well was selling around 10 per cent of its property portfolio to make its loan ratio more secure and “put the bank’s mind at ease, although we are not very aggressive investors”, Tong said.
