Is the European real estate lending market still pausing, or is it beginning to move on?
In the early months of 2016, we have grown accustomed to lenders explaining that the drop-off in activity levels since last year can be explained by numerous factors including the UK’s European Union referendum, stock market and currency volatility, political risk and much else besides. In short, when the world appears to be a rather scary and uncertain place, probably best that your lending strategy is not too adventurous.
The latest apparent confirmation of a subdued market, in Europe at least, came with the most recent Cushman & Wakefield report into loan sales. This showed the market at its quietest since mid-2013, with a huge 91 percent drop in total sales compared with the same period last year.
However, at the recent CREFC Europe Spring Conference we heard some lenders insist that things are now beginning to pick up somewhat. This would be a timely and in some ways unexpected boost – after all, we have previously detected something approaching a unanimous view that lending levels are unlikely to perk up until after the outcome of the UK’s big vote is known. Cynics may suggest that lenders are simply trying to convey a sense of normality – or perhaps give themselves a bit of a pep talk – but time (and statistics) will tell.
One thing is for sure: as European lenders have reined back a little, so Asian-headquartered organisations (mainly banks) have ventured into European lending in increasing numbers. In a special report, we look at some of the landmark deals that the Asian newcomers have struck and we also list and profile more than 20 firms that have made an impact – mostly so far in the UK, but with signs that they may venture onto the continental mainland as well.
This month’s Profile is with New York-based Pembrook Capital Management. In conversation with Stuart Boesky and other senior executives, we discover how the rules and regulations constraining the banks have opened up a wider opportunity set for debt-focused fund managers such as Pembrook.
Also in this issue, we have features exploring current market conditions in the Netherlands; the implications of the energy slump for real estate lending in the most affected US cities; and a guest feature on the applicability of W&I insurance to real estate lending; as well as our regular data coverage.