Since 2012, the number of European property lenders has increased by 47 percent.

 

'Alternative' non-bank financial institutions continue to take a larger share of an increasingly diversified mix of active lenders in Europe, according to Cushman & Wakefield's new European Real Estate Lending Update released today, while the drive into 'non-core' markets such as Spain, Portugal, and Italy picked up steam during H1 2014. apartment for sale in pearl qatar

Alternative lenders, which include insurance companies, property businesses, private equity and debt funds, now account for 40% of all European lenders, according to Cushman & Wakefield's Corporate Finance division.

(16%) in the first quarter of 2012.

During the first half of 2014, Cushman & Wakefield tracked a total of €32.7 billion in real estate lending, including €27.3 billion in origination (new investment lending, new development lending and refinancing) Given the increased risk appetite among lenders, the second half of the year is projected to be just as busy.

With 60 percent of all tracked loans guaranteed by assets in these markets during H1 2014, the core markets of Western Europe - the United Kingdom, France, and Germany - remain the top targets for real estate financing. However, interest in non-core markets has grown as a result of new opportunities and lender demand to move up the risk curve in quest of higher returns.

Many senior debt providers are turning to whole loan financing, and average LTVs in Western Europe and Central and Eastern Europe are now more evenly distributed.

While margins have continued to contract in the majority of markets, the pressure has eased in the second quarter.

The all-in cost of financing in the UK for a 50 percent leveraged transaction secured on a premium UK asset has declined from 6.53 percent in H1 2008 to around 3.39 percent in Q2 2014, according to the research.

Cushman & Wakefield is currently following 39 European property debt funds that are trying to raise €22.1 billion to target real estate debt.

After a strong 2013, the European CMBS market weakened in the first half of 2014. Despite this, investor demand continues to be strong, and market observers expect further issuance in the near future.

During the first half of 2014, the availability of loan-on-loan financing grew dramatically, with CWCF registering approximately €5.5 billion in debt obtained across nine deals.

According to Frank Nickel, Chairman and CEO of EMEA Corporate Finance in Germany, "Despite the fact that the supply of debt in most European markets has been continuously expanding, margins appear to have stabilized during the previous quarter. Many lenders have been able to climb up the risk curve faster as a result of this."

"Lenders are bidding aggressively for assets with good fundamentals. This profile has now expanded to include areas and industries that were previously unappealing 6-12 months ago. This pattern has been reflected in the transactions we've completed so far this year "Mike Morrison, Partner of EMEA Corporate Finance, contributed his two cents.

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