Active European lenders up by a third

The number of active European real estate lenders has increased by 29% in the past 12 months, according to Cushman & Wakefield’s European Real Estate Lending Survey 2013.

The findings were published on the first day of the MIPIM real estate fair in Cannes on Tuesday.

For the survey, 109 leading global real estate finance providers were interviewed to assess lending appetite and determine key trends which will shape the European finance market this year.

Although the number of active lenders has increased significantly, many continue to focus on prime assets located in core and domestic markets. This is resulting in lending criteria remaining mostly rigid and selective. Some lenders are willing to consider non-core markets and sectors but the margins demanded are considerably higher.

The survey also pointed to a potential increase in available capital for European real estate debt in 2013. Cushman & Wakefield estimates there will be a 22% increase in new debt available in 2013 compared with last year, after examining the difference between the levels of loans completed in 2012 and their targets for this year. However, a significant amount of this capital will be allocated to refinancing, as opposed to new lending.

In recent years, the number of lenders willing to underwrite loans of over €100 mln has been declining. Cushman & Wakefield said this has now reversed: 28% of lenders surveyed stated they would underwrite €100 mln-plus transactions. This compares to 18% in Q1 2012. Of these lenders, 70% are commercial and investment banks.

Click on the link below for the report.