The post–global financial crisis recovery of Europe’s commercial real estate market since 2008 established a raft of opportunities within commercial mortgages, across a range of risk and return profiles that are balanced by favourable relative value versus alternative asset classes.

The “golden period” where prudently-leveraged senior commercial mortgages could command 300 basis points and above may have been short-lived, and is unlikely to return again anytime soon, but the investment case remains compelling for long-term investors as part of a wider multi-asset allocation.

In the current market, senior margins typically range between 100 basis points and just under 300 basis points, relative to leverage, asset quality, income and lease profile as well as the sponsor’s track record and business plan.

In the higher-yielding mezzanine finance market, investment returns typically range from 7 percent to 12 percent, again with pricing entirely dependent o