(Bloomberg) -- The Parkview Group, a real estate developer in Hong Kong, is seeking private credit funding of at least HK$2.8 billion ($360 million) to refinance a bank loan, according to people familiar with the matter.
The firm is offering two towers and a car park in Hong Kong Parkview, an apartment complex in a southern section of Hong Kong Island, and other assets as collateral, said the people, who asked not to be identified as the matter is private. The loan could carry a tenor of between two to three years, the people said. Discussions are ongoing and details could change, they added.
Its push for private credit — which charges higher interest rates than bank financing — comes as Nanyang Commercial Bank Ltd. is unwilling to roll over a loan, the people said.
The talks reflect the Hong Kong property market’s continuing struggles stemming from the city’s sluggish economy and changing demographics. After declining more than 6% this year, home prices are close to the lowest level in eight years.
Nanyang and the Parkview Group didn’t immediately reply to requests for comment.
Compounding the problem is an expat exodus, with rents in areas favored by foreigners dropping as much as 12% in the first 10 months of the year, according to data from listings firm Spacious.hk.
The real estate assets put up for collateral is a large private housing estate that’s nestled near the city’s Tai Tam reservoir and a short distance away from Stanley, a beach neighborhood favored by expats. The rents in Stanley have dropped 9.2% in the first 10 months of this year, according to Spacious.hk data.
©2024 Bloomberg L.P.