Coronavirus

Syndication is slow and capital value forecasts are bleak, but CMBS transactions remain liquid and real estate is expected to retain relative value.

With commercial properties shuttered and daily life shifted online, data-centric real estate has thus found itself higher on investor wish-lists.

The business school’s end-year 2019 survey results show defaults were on the rise pre-covid-19, but that the market entered the crisis in a nonetheless stable state.

After a lofty point in the investment cycle saw the definition of prime real estate become flexible, investors are now unwilling to tolerate extra risk without additional rewards.

The pandemic will make it difficult to invest capital during the first half of the year but declines in asset pricing are expected to help deal volumes rebound in H2 2020.

Sentiment among Germany’s real estate lenders has plummeted, although those closing transactions are reported to have raised loan margins.

Last month’s real estate debt fire sales at the outset of the covid-19 outbreak in the US were just the tip of the iceberg for private real estate.

Coronavirus shutdowns have pushed nearly $25bn of US CMBS loans to the brink of delinquency, and the worst is yet to come.

Losses and write-offs on retail debt could reach £10bn, while £22bn of development loans face delays, the latest UK lending market report by Cass Business School predicts.

Lenders are facing calls to grant interest payment holidays, force majeure is on people's minds, and operational property is expected to be hardest hit.