(Bloomberg) -- A consortium of investors led by Hong Kong-based fund manager Gaw Capital Partners is seeking a HK$5.4 billion ($694 million) loan to refinance the debt used to back the acquisition of Cityplaza One office tower.
Sponsors of the consortium — including Gateway Real Estate Fund VI Ltd., the real estate fund managed by Gaw Capital — have appointed banks to arrange the three-year financing, which is split into a HK$5 billion term loan and HK$410 million revolving credit facility, according to a person familiar with the matter, who asked not to be named discussing a private matter.
The loan pays an interest margin of around 150 basis points over the risk-free Hong Kong interbank offered rate, the person said. This is the second time the fully-underwritten facility is being syndicated to the broader market, according to another person familiar. A Gaw Capital spokesperson declined to comment on the matter.
The refinancing comes amid a slump in Hong Kong’s commercial real estate as lofty vacancies and a supply boom push office vacancy rates near historical highs, Bloomberg Intelligence reported.
The special administrative region’s prime office vacancy rate rose to 16.9% in September from 15.9% as of late 2023, according to Colliers’ data, with the Central district’s rate climbing to 15.1% from 12.2%.
In 2020, Gaw Capital and partners had paid HK$9.85 billion to purchase the office building from Swire Properties Ltd. A loan of HK$6 billion had funded the acquisition.
Separately, Gaw Capital had sought to take full ownership of two other towers in the area from a minority stake partner via a public tender, Bloomberg reported in June, but it opted not to proceed with the purchase and the tender lapsed in September.
The consortium of investors backing Cityplaza One, a property complex in eastern Hong Kong island, include Manulife Financial Corp. and BOC Group Life Assurance Co., according to a 2020 announcement.
(Updates the third paragraph to say that Gaw Capital’s spokesperson declined to comment.)
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