Property Debt Shows Signs of Loosening
European real estate debt markets are beginning to loosen up, reports CB Richard Ellis in the firm’s Q3 2010 MarketView: European Capital Markets, especially in markets with stronger fundamentals.
Germany and France, for example, are seeing larger loan sizes and higher LTVs. In Spain, by contrast, margins have been going up while loan sizes have been falling. Spanish banks are experiencing higher costs of capital and decreasing capacity as a result of sovereign debt downgrades.
“It is encouraging to see that there is an increasing number of options available for financing real estate transactions,” says Natale Giostra, head of UK and EMEA debt advisory at CB Richard Ellis Real Estate Finance. “However, we expect a tightening of traditional lending channels [in 2011] due to concerns about the volume of loans maturing shortly.”
Another factor is that