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European Real Estate Lending Trends Spring 2017

Nigel Almond

Head of Data Analytics

Phone +44 203 296 2328

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Cushman & Wakefield has conducted its fifth survey on commercial real estate lending activities across Europe in the first quarter of 2017. It captures the latest dynamics across Europe’s real estate lending markets.

Lenders remain principally focussed on activity in the traditional big three markets of the UK, Germany and France. However, while the UK maintains its position as the main market where lenders anticipate focusing activity, its dominance has been diluted since the vote to leave the EU. The UK’s share of the lending market now represents 21% compared to 25% at the start of 2016.

Elsewhere, Germany’s share of lending activity has increased to 17% while significant growth has also been seen in the Benelux and Nordic regions in particular. 

Senior debt remains the preferred loan structure for the majority of lenders, although its share has diminished over the past 12 months. This shift has resulted in a rise in alternative structures including stretched senior and mezzanine finance with the former preferred by 20% of respondents, up from 10% a year ago.   

The average loan-to-value (LTV) ratio at the all-property level has risen in the majority of markets and are edging back towards levels seen at the start of 2016.