Distressed assets drawing out bargain hunters in real estate, old-economy sectors as higher debt costs bite

PROPERTY players in China and South-east Asia are feeling the squeeze as higher interest rates raise their costs of borrowing and reduce buyer demand.

The bonds of several Chinese property companies are trading at deeply discounted levels, and market watchers expect to see more players come under pressure. Old-economy industries, particularly those without green credentials, may face stresses too.

Despite risky macroeconomic conditions, however, industry observers see sufficient appetite for distressed assets from private equity funds, family offices and high net worth investors. Distressed debt funds in the United States and Europe, as well as companies with strong balance sheets, are also among the bargain hunters.