HONG KONG, Sept 5 Reuters Asset managers are increasingly looking to dispose of their commercial buildings in Hong Kong as rising interest rates take a toll on mortgage payments, which for some have now exceeded rental income.

Some of the sales plans also come as mortgage loans are due to be refinanced, which is made more difficult when equity in the asset drops, people in credit and property markets said.

While Hong Kong reopened its borders this year after the pandemic, the recovery in the city39;s commercial property sales and rental markets has been weaker than expected due to rising interest rates and a sluggish global and China economy.

Office prices have dropped over 30 since their peak in 2019 following antigovernment protests and COVID19, with many international firms scaling back or exiting the financial hub.

Average rents also dropped 34 and vacancy rates rose to 17.3 at the end of June, according to data from Cushman Wakefield.

Sources said a few larger asset managers, eager for swift disposals, were starting to sell Hong Kong assets at discounted prices. KaiLong Group is putting two of its buildings which both have loan facilities due this year on the market with the deadline for nonbinding bids later this month, two sources with knowledge of the matter said.

One asset is a new 25storey GradeA tower in the Central financial district, while the second is also a 25storey commercial building with 41 parking spaces in nearby Wan Chai.

People with…