DISTRESSED BRIEFING: Banks move to direct real estate sales

Banks are turning to straight real estate deals to shed distressed assets rather than selling portfolios or at auctions, delegates at PropertyEU's Distressed and Opportunistic Investment Briefing heard.

'The type of transaction we are seeing through this distressed and opportunistic wave is quite diverse,' said Mathieu Roland-Billecart, a partner in Ernst & Young UK's real estate finance team.

'People normally talk about distressed assets as portfolios being put on the market by banks - NPL transactions,' he said. 'But now there are many more straight real estate transactions taking place, which are effectively banks saying, "look, your loan has been on standstill for a year or so, we’re just going to put the property on the market because it's a good time to sell."'

Roland-Billecart cites rising prices and the easier availability of debt as contributory factors. 'Generally speaking in all corners of the market prices have gone up,' he said. 'But the striking difference to 12 months ago is there is a lot more debt out there. Maybe more lending institutions are going up the risk profile. If you’re a big opportunistic fund or private equity fund looking to finance your latest acquisition there is a lot of competition out there for debt.'

Watch the videos and read more about the distressed briefing here