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European Real Estate Lending Update - H1 2014

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According to Cushman & Wakefield Corporate Finance (CWCF), the number of active European real estate lenders has increased by almost 47% since Q1 2012.

The drive into the previously labelled “non-core” markets has continued throughout H1 2014, with interest in Spain, Portugal and Italy growing considerably.

Today’s market is market is by the increasingly diversified mix of active lenders, with non-bank financial institutions taking up a larger share of the European lending landscape.

CWCF has tracked €32.7bn of real estate lending across H1 2014, of which €27.3bn is origination (made up of new investment lending, new development lending and refinancing.)

Whole loan financing is becoming increasing popular with many senior debt providers, whilst the gap between LTVs offered across Western European and CEE markets is closing.

Whilst margins in the majority of markets have continued to compress, the pressure has eased during the second quarter.

According to CWCF research, the all-in-cost of financing in the UK for a 50% leveraged transaction, secured on a prime UK asset has fallen from 6.53% in H1 2008, to approximately 3.39% in Q2 2014.

European property debt funds continue to play a vital role, with CWCF currently tracking 39 funds looking to raise €22.1bn to target Real estate debt.

After a promising 2013, the European CMBS market has slowed in H1 2014. Despite this, investor demand remains strong and market commentators see further issuance in the near term.

The availability of loan-on-loan financing has grown rapidly during H1 2014, with CWCF recording over €5.5bn of debt being secured across nine transaction in the first half of 2014.

Source : Cushman & Wakefield

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Keywords : Cushman & Wakefield