GLOBAL - There is growing evidence that the cost of borrowing in the global unsecured real estate debt markets is finally starting to fall, according to Jones Lang LaSalle.

In its latest global markets report, JLL cited sale of bonds by Simon Property Group in the US and the recent refinancing achieved by ProLogis in Europe, as indications that the global property debt markets have begun to ease.

During the past 12 months, the real estate debt markets have not followed the improvements seen in the high-grade corporate credit markets, which the report attributed to deteriorating property fundamentals.

But the fact that Simon Property was able to sell bonds at 5.45% and ProLogis was able to refinance €280m, with yields ranging from 4.4% to 5.24%, suggested things are finally improving, JLL said.

Furthermore, JLL stated that the majority of real estate owners with property-level loans and the potential to recover equity in the short-term are now able to extend or modify their loans with existing lenders at better terms than those currently available in the capital markets.

The report also suggested real estate companies are benefiting from the credit market easing, in conjunction with rebounding equity markets, to raise new equity for potential acquisitions and the reduction of debt levels.

JLL estimated that on a global scale real estate investment trusts had raised $33bn of equity and issued $5bn of debt through August 2009.