Latest AEW research shows continued ‘risk off’ attitude of lenders post COVID-19

Key findings of the report include:

Debt used to fund new real estate acquisitions was €129 billion ($tk billion) for 2020. This is down by 15 percent, from 2019 due to the COVID-19 lockdowns. Across the entire European market, the average annual acquisition LTV remained at less than 50 percent. The latest 2021 EPRA and INREV portfolio LTV ratios returned to their year-end 2019 levels and also remain well below their 2008–2009 record levels, confirming the trend seen when considering only acquisitions. AEW’s updated loan-level database shows average margins for mid-year 2021 at 2.7 percent, the highest levels since 2003, continuing their upward trend. Given the near-zero level of base rates, all-in interest rates remained stable, below 3 percent. All-in U.K. rates remained stable, while non-U.K. rates increased more in 2021 than in 2020, which is likely to be a delayed impact from COVID-19, as closed loan margins are typically finalized