Acquisition-related financing requests halved in the first quarter of this year for deals in excess of £50m (€63.6m), according to Laxfield Capital.
The real estate debt investment manager’s ‘UK CRE Debt Barometer’ found that demand for long-dated finance had increased substantially, triggered by falling rates.
Laxfield drew on a total sample of 1,293 loan requests totalling more than £89.1bn.
Emma Huepfl, co-principal at Laxfield Capital, said the start of 2016 was “markedly different” to the final quarter of last year, with demand for acquisition finance on large deals falling.
“Nevertheless,” she added, “volumes remained high, boosted by a rise in demand for long-duration loans, as borrowers sought to extend maturities and lock into the low-rate environment.”
Demand for finance on alternatives exceeded finance demand on core assets for the first time, the study found.
In an active period for non-core assets, there was high demand for hotel-related finance towards the end of 2015, during a “very strong year for the sector”, Huepfl said.
Leverage levels were restrained, while demand for small and mid-market loans was very active.
Becky Worthington of the Property Finance Forum, which sponsored the report, said: “It has been another interesting half-year, with clear signs of a market response to political uncertainty.”