Top-Tier Hong Kong Developers Cut Loan Costs by as Much as 40%
- Banks are facing lower returns on loans amid slowing dealflow
- Average loan margin falls to five-year low year to date
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The latest round of financing being raised by Hong Kong real-estate developers Wheelock & Co. Ltd and Sun Hung Kai Properties Ltd is likely to drive down loan pricing further as banks compete to lend to corporates by lowering interest rates and fees.
Despite the recent imposition of a new stamp duty, and expectations that rate hikes will curb home-buyer demand, developers are asking for 20% to 40% discounts on loan pricing compared to what they paid for similar financing in the first half of the year, knowing that banks are flooded with liquidity and craving quality assets.