VIDEO: Europe’s CMBS revival is “sustainable”

Christian Aufsatz, head of European structured finance at rating agency DBRS, expects market dynamics to support a continued revival of Europe’s commercial real estate securitisation market.


The number of investors willing to buy commercial mortgage-backed securities issued against European commercial real estate loans has increased as they seek higher-yielding structured finance products, explains Christian Aufsatz, head of European structured finance at rating agency DBRS.

The increase in the size of the investor base is an important factor supporting the revival of Europe’s CMBS market. This comes on the back of a relatively strong 2018, during which 13 CMBS transactions took place. This in turn followed a hiatus between mid-2016 and the last quarter of 2017.

“The market dynamics still seem to be right for issuers,” says Aufsatz. “So you can make a profit by doing a CMBS transaction with the right loan.”

Despite acknowledging headwinds, including the political and economic backdrop and the potential for spreads to widen across the securitisation market, Aufsatz explains why CMBS issuance is likely to ramp up following a slow first quarter of 2019.