HONG KONG: Among those looking forward to the US Federal Reserve’s interest rate cuts, some are as anxious as , Hong Kong’s home tycoons who are now dealing with slow home sales, unoccupied office buildings, and insubordinate tenants demanding contract renegotiations.  ,
About 60 per share of listed property businesses ‘ loan is , borrowed at floating rates. Banks  , charge New World Development an , average 1.1 to 1.2 per cent over Hong Kong Inter-bank Offered Rate ( HIBOR ), whose movements track the fed fund rate , because of the Hong Kong dollar peg.
A one percentage-point , rate cut is keep chief executive officer Adrian Cheng, a third-generation heir , from a billionaire home, HK$ 1.1 billion ( US$ 141 million )  , and increase revenue by a third, according to Morgan Stanley quotes.
New World,  , one of Hong Kong’s most obliged engineers, paid HK$ 2.5 billion in funding costs , in the second-half of 2023,  , eroding 44 per share of the firm’s working income.  ,
But more importantly, the Fed’s easing cycle may begin to support large landowners make an investment case for the goods they try to sell, or use as collateral , for institution money. Now, the city’s overall real estate market - , from personal to financial to , offices - , suffers from bad carry, in that the rent an owner may expect to collect is nothing close to paying for financing costs.
Leasing , out Grade-A offices, for instance, yields on average only about 3.2 per cent, not enough to cover the one-month HIBOR’s 3.9 per cent.  ,