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n the heart of Hong Kong's bustling Causeway Bay shopping district, a commercial building with shaky financing has been thrust onto the market. Cubus, a 25-storey mixed-use building hosting high-end tenants, was put up for sale last month after its owners struggled to repay a loan from lenders led by Bank Sinopac. The public tender process started with an opening price of HK$1.4 billion (US$180 million), nearly 30% lower than its peak valuation of HK$2 billion.

    This is just one example of the turmoil engulfing Hong Kong's commercial real estate market, a key pillar of the local economy that has buckled under China's economic malaise and changing consumer habits. The exodus of global firms due to geopolitical tensions and Covid-19 controls, as well as a supply glut and high interest rates, have all taken their toll.

    The fallout is far-reaching, affecting real estate moguls, savvy investors, and banks alike. With bad debts rising, lenders are becoming increasingly cautious about extending credit, leaving many property owners struggling to stay afloat. The market's woes are a stark reminder of the challenges facing Hong Kong's economy as it navigates a complex web of global and domestic factors.