The debt overhang is still persistent in many European commercial real estate markets and will be for some time to come. Recent research from DTZ estimates that in the United Kingdom alone there is a potential gap of €39 billion between the amount of commercial real estate loans maturing and the amount of debt that can be raised during the next three years. Large gaps can also be found in places such as Ireland and Spain. Real estate investments are simply too highly leveraged.

A lot of the problem is being pushed to the future by creditors. They are evergreening their loans — effectively extending the maturities of the loans, hoping that things will get better before their positions have to be realised. Low interest rates and massive government support have made such extensions possible. And these extensions have served creditors well; had they realised their positions during