Squeeze play

There will be 7.7 million square feet of empty office space in Hong Kong in 1998, which is twice the normal office space available to rent. Rent on retail units are also between 15%-20% less than June 1997 and shopkeepers are campaigning to have rents reduced because of the downturn in consumer spending. Property companies will be the worst hit by the slump because they need income from rented property to pay their debts. Small developers could go out of business but larger ones will be secure as they only have a debt-to-equity average of 30%.