Lenders appear to be steering clear of self-storage financing in Hong Kong after two storage-facility fires last month killed two firefighters and injured another. The blazes prompted government officials to suspend self-storage development inside industrial buildings, while agencies conduct safety checks throughout the region. The Hong Kong Monetary Authority, the city’s currency board and central bank, this week indicated it had no plans to issue self-storage lending guidelines to banks since lenders already have their own procedures to manage risks, according to the source.
Derek Chung Siu-kuen, assistant general manager and head of retail banking at Wing Lung Bank, told the source the lender has stopped processing new mortgage applications from self-storage operators out of concern over compliance with potential new fire and safety requirements that may result from ongoing investigations.
Government officials have committed to spending two months examining 487 self-storage locations, primarily looking for safety violations.
A reduction or outright ban of using industrial buildings for self-storage could cause widespread vacancies and negatively impact investment values in those properties, according to Marco Chan Kam-ping, head of research for CBRE Hong Kong, Southern China and Taiwan, a commercial real estate services and investment firm.
Sources:
- The Standard: No Loan Rule Change for Mini Storages
