European real estate debt investors continue to benefit from sluggish economic growth. A decrease in business confidence has prompted central banks, including the European Central Bank (ECB) and the Bank of England, to reverse interest rate re-normalisation plans and keep rates lower for even longer.

While there is something of a Groundhog Day feel to this dynamic, amid negative yields in European sovereign debt, it will net positive returns for lenders and allow borrowers to benefit from a lower cost of capital. In turn, rock bottom bond yields are expected to keep property yields more stable than previously expected, and real estate debt will retain its broad appeal to investors over the year ahead. Evidence of debt’s allure can be found in PwC and Urban Land Institute’s Emerging Trends in Real Estate 2020 survey, in which more than half of respondents believe that equity and debt for refinancing or new investment in 2020 will be at the same level as recorded i