CBRE, a global specialist in commercial real estate, publishes its annual investor study, entitled 2024 Europe Lenders Intentions Survey, which reveals the intentions of lenders in Europe for 2024.
Like last year at the same period, CBRE carried out a survey of the main real estate lenders at European level. The results show an overall positive sentiment, summed up by the expression “open for business”.
After a complex year in 2023, real estate lenders are adopting a proactive approach: 2 out of 3 respondents plan to increase or maintain their volume of activity in 2024. Since the start of the year, with rare exceptions, lenders have been receptive to files presented to them.
Activity in 2024 will, however, be mainly marked by refinancing operations, in a context of low investment volumes and high base rates, despite the reduction initiated last June in key rates by the European Central Bank.
More demanding real estate lenders…
The proactive approach of real estate lenders is an undeniably positive sign for 2024. However, it is accompanied by a few conditions: strong selectivity in terms of sector – offices still suffering from a certain disaffection – and more conservative underwriting criteria . Furthermore, in the many cases of refinancing, particular attention is paid to the sustainability of the cash flow and the quality of the sponsor, in particular its capacity and willingness to reinject equity.
...and always committed to green projects
A constant element is the requirement that real estate lenders comply with Environmental, Social and Governance (ESG) criteria before considering any new financing. And if these criteria are met, most are willing or plan to offer a margin reduction for loans on assets with strong ESG credentials, typically in the range of 5 to 20 basis points.
Situation in France
This European survey masks sometimes divergent national realities: pragmatism in the United Kingdom versus difficulties of certain lenders in Germany. In France, the period of legislative elections and the Olympic and Paralympic Games will probably cause some waiting. Beyond these events, market fundamentals remain solid and attractive for all lenders.
Illustrative image of the article via Depositphotos.com.
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