More of Hong Kong’s small and medium-sized property developers will face default risks, market experts said, adding that they hoped the government would provide more capital support as banks remained cautious about issuing new loans.
“There is no white knight in the market, so investors and companies that are in financial distress have to self-rescue,” said Glen Ho, national turnaround and restructuring leader at consulting firm Deloitte.
“The market is very rigid, lacking new capital, as banks are reluctant to grant new loans,” he said.
The multi-year price slump in the city’s commercial real estate sector, which has caused considerable financial strain for developers, has raised concerns among banks over growing non-performing loan (NPL) ratios.
Joseph Tsang, the chairman of JLL Hong Kong, said banks that are cautious about lending create problems for the real estate market.
