The yearslong property slump in mainland China and Hong Kong has triggered hundreds of billions of dollars in bond defaults. Bank creditors, once considered relatively insulated for holding real estate projects as collateral, are now increasingly feeling the strain.<\/p>\n
While many banks don\u2019t want to prolong their exposure to China\u2019s property sector, selling off property in the event of default may not be appealing either. Distressed sales of Chinese commercial real estate assets totaled 114 billion yuan ($16 billion) over 2023 and 2024, and made up a record 22% of total transactions last year, according to a report by Bloomberg Intelligence.<\/p>\n
Parkview secured a three-month reprieve on the UOB-led loan in August. The borrowing is backed by the Parkview Green complex in Beijing\u2019s Chaoyang district, a mixed-use development known for its sleek glass architecture and collection of contemporary art.<\/p>\n
Parkview Green in Beijing. <\/p>\n
In earlier talks, banks were concerned about extending Parkview\u2019s loan because Parkview Green wasn\u2019t generating enough cashflow to service its debt obligations. Parkview put the asset up for sale last year, but so far there is no potential buyer, the people said.<\/p>\n
HSBC, UOB, Hang Seng Bank and Gaw Capital declined to comment. Parkview didn\u2019t respond to requests for comment. In an emailed response Wednesday, Panhsin said that it is still evaluating the Parkview loan refinancing and hasn\u2019t made a final decision. The bank didn\u2019t respond to further inquiries on Friday.<\/p>\n
The Gaw fund loan is backed by a 25-story office building called Ocean Towers, near Shanghai\u2019s famed Nanjing East Road shopping area. A Gaw-led consortium bought Ocean Towers from ARA Asset Management for around 3 billion yuan ($421 million) in 2018, real estate publication Mingtiandi reported at the time. The fund had sought to sell the asset to repay the loan, but also didn\u2019t secure a deal before the borrowing matured, people familiar with the matter said earlier.<\/p>\n
Major lenders on the Gaw fund loan include HSBC and Hang Seng Bank.<\/p>\n
Both loans are among a clutch of cross-border property-backed facilities completed during China\u2019s real estate boom that are coming due during the sector\u2019s deep downturn. These borrowings are typically backed by onshore assets and structured so offshore lenders have limited recourse if the company can\u2019t repay the loan.<\/p>\n
Separately, Gaw is also nearing a deal to refinance a $110 million-equivalent loan backing a life science park project in Shanghai that is set to mature on Nov. 24. The firm is in talks with existing lenders about a potential new three year facility.<\/p>\n
Most Read from Bloomberg Businessweek<\/p>\n
\u00a92025 Bloomberg L.P.<\/p>\n","protected":false},"excerpt":{"rendered":"(Bloomberg) \u2014 Banks in Asia are getting caught in the latest flare-ups in China\u2019s real estate crisis, as…\n","protected":false},"author":2,"featured_media":284598,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,1071,99,512,164,164448,101515,61283,16941,164449,164450,1003],"class_list":["post-284597","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-bloomberg","tag-business","tag-china","tag-economy","tag-gaw-capital","tag-hang-seng-bank","tag-hsbc-holdings-plc","tag-mainland-china","tag-parkview","tag-parkview-group-ltd","tag-real-estate"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/284597","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=284597"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/284597\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/284598"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=284597"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=284597"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=284597"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}