Interest rates

The bank’s sentiment survey revealed its private clients tip residential for sale and for rent to exceed expectations.

Panellists at REC Europe’s London event said inflation and rising rates are prompting greater scrutiny of potential financing deals.

Senior industry executives are taking a very granular approach to valuing investments a time when market conditions are ‘very, very hard to read’.

With the war in Ukraine fuelling inflation and interest rates on the rise, real estate debt market participants are bracing for volatility.

The repricing in global financial markets since Russia’s invasion of Ukraine in February has put upward pressure on financing costs in Europe’s real estate sector.

The cost of debt increased overall in Q1 2022, remaining stable only in Zurich, according to real estate investment service CBRE.

In a webinar last week, the French bank argued the provision of debt in European real estate markets has not been significantly impacted by political and economic factors.

Financings like the £60m, five-year revolving credit facility for Supermarket Income REIT should become more regular in the UK grocery retail sector as demand mounts.

Lower-for-longer conditions are driving capital into property markets. But persistently low interest rates are also a concern for real estate investors and lenders.