Commercial real estate and financial services companies in Asia are set to bear the brunt of corporate distress this year and next, with the Greater China region most likely to see a wave of financial restructurings, according to AlixPartners.
Restructuring professionals are bracing for an uptick in activity across Asia this year, with about 62 per cent of respondents anticipating more out-of-court restructurings, according to a survey published by the restructuring specialist on Wednesday. An equal number of professionals expect a rise in distressed merger and acquisition transactions as an alternative to formal insolvency proceedings.
At the same time, 92 per cent of respondents said geopolitical disruptions – including elections, leadership transitions and regional conflicts – were likely to drive more distressed situations in the next 12 months, the survey found.
The survey of 200 professionals – including investors, bankers and financial advisers – also found that Greater China was likely to see the most restructuring activity in the coming 12 months, with 33 per cent of respondents expecting heightened workout activity in the market. Some 22 per cent of respondents expect Singapore and Japan to follow.
About 39 per cent of respondents believed commercial real estate to be the sector most likely to face significant distress in 2025, followed by financial services at 35 per cent. This comes amid lingering high interest rates, tighter credit conditions, and a pullback in investor appetite for real estate and financial assets across the region.
