So much for so much

13 December 2017 By Pete Sweeney Follow @petesweeneypro

A Beijing firm plans to buy a $5.2 billion Hong Kong skyscraper almost entirely using debt, much of it at high rates. That might work if it can resell floors quickly. Success would fuel fresh speculation, and undermine attempts to stop state firms dabbling in overseas property.

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China-backed C.H.M.T. Peaceful Development Asia Property is seeking to fund a $5.2 billion Hong Kong skyscraper purchase by borrowing as much as 90 percent of the sum, according to a term sheet seen by Reuters and people with knowledge of the matter.

The buyer is looking to raise 40 percent of the price via a 12-month loan at 8 percent interest from Hong Kong-based investors.

Daiwa analyst Jonas Kan recently estimated the price for "The Center" building equates to about HK$33,000 per square foot, for a gross yield of 2 percent.

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