Interest rates

A debt funding gap looms across Europe’s property markets. Yet banks and debt funds are well capitalised. Will their funding end up where it is most needed?

The country’s real estate financing market is much better positioned to weather this economic crisis than the last one, argue the participants in Real Estate Capital Europe’s Spain roundtable.

Providers of loan-on-loan finance are pricing in higher interest rates.

Panellists at CREFC Europe’s London conference said uncertainty around interest rates and property values is making debt transactions difficult to underwrite.

The region’s well-developed banking market and strong macroeconomic features are creating a stable lending environment.

The New York-based mega manager expects deployment activity to become muted but more creative dealmaking to emerge in the near term.

UK offices and retail are sectors of most concern as interest coverage ratios plummet.

Private real estate managers are being cautioned to garner a greater understanding of the vitality of their tenants to avoid triggering income clauses in their borrowing terms.

The latest Bayes Business School report shows there was £23.7bn of origination in the first half of the year, in line with the same period in 2021.