- April 1, 2009: Vol 3, Number 4

To read this full article you need to be subscribed to Institutional Real Estate Europe

Capital Punishment

by Mark Faithfull

There can’t be many European real estate fund managers looking forward to what the new financial year will bring. Even the most optimistic analysts do not foresee a bottoming out of capital values until the third quarter of 2009 and predict no tangible signs of recovery until well into 2010. In the meantime, fund managers will have to juggle further depreciation of their portfolios, exacerbated by an expected increase in distress sales, with the expectations of their current and prospective investors. And they will have to do it all the while fretting over the loan-to-value agreements with their banking lenders as plunging capital valuations threaten covenant breaches.

There is the very real prospect that smaller funds with fewer assets may be forced to merge in order to shore up their finances and maintain investor confidence, while analysts anticipate few new vehicles or fund managers entering the market in 2009. That is in sharp contra

Glossary, videos, podcasts, research in the Resource Center

Forgot your username or password?

Close your account?

Your account will be closed and all data will be permanently deleted and cannot be recovered. Are you sure?

We respect your privacy! Please give consent for processing data as described in our Privacy Policy