Stuart Watson
Conditions in European real estate debt markets favour alternative lenders. But sluggish investment activity is picking up only slowly, and underwriting remains challenging, say roundtable participants.
Demand for short-term finance has surged as investors and developers seek to ride out market turbulence and ‘stay alive till 2025’.
Alternative lenders must navigate a market in which values are still unsettled and affordability is under pressure.
For the alternative lenders participating in Real Estate Capital Europe’s roundtable, market conditions seem conducive to grow their loan books. But the apparent opening is not without complications.
The participants in Real Estate Capital Europe’s mid-market roundtable seek to discover opportunity in a segment buffeted by economic headwinds.
Retrenchment by banks in Europe has opened huge scope for growth, but private real estate debt providers are keeping a weather eye on the effects of inflation.
Real Estate Capital Europe’s Spanish roundtable participants observe that despite a difficult pandemic, liquidity has swiftly flooded back to the country.
Covid has added complexity because of the changes in lender appetite but the sector is bouncing back after a three-month hold.
Retrenchment among the big domestic banks that dominate the French market has created opportunities for debt funds – when sponsors are willing to pay the price.
Participants in our first virtual roundtable predict lenders in France will reprice property debt and reduce leverage as the market copes with covid-19.