No loan rule change for mini storages

Business | Dominique Nguy 26 Jul 2016

The Hong Kong Monetary Authority has no plans to issue guidelines to banks on mortgage lending for mini-storage facilities.

Its statement comes after Sing Tao Daily reported yesterday that banks are keeping their distance from mini-storage premises on mortgages after a recent blaze at a Ngau Tau Kok storage that killed two firemen.

An HKMA spokesman said banks have procedures to manage risks in mortgages, adding that it is up to banks to decide on whether mortgages will be provided to individuals or certain groups of clients using their risk assessment guidelines.

Derek Chung Siu-kuen, assistant general manager and head of retail banking at Wing Lung Bank, said yesterday it has stopped processing new mortgage applications from operators of mini-storage facilities out of concern if their operations comply with rules laid down by the buildings and fires services departments.

Marcos Chan Kam-ping, head of research at CBRE Hong Kong, Southern China and Taiwan, said he expects the government to introduce additional measures to further regulate the safety and usage of old industrial buildings.

He believes that in the long run, a reduction in the flexibility of usage of industrial premises will increase the vacancy risk in industrial buildings and pose a negative impact on investment values.

Meanwhile, Citibank will continue to rent the ground and first floors of the Hongkong Chinese Bank Causeway Bay Centre along Yee Wo Street for about HK$1.3 million a month, 7.1 percent lower from HK$1.4 million three years ago.

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