The Eastern European markets of Budapest, Bucharest and Warsaw, in addition to Milan and Oslo, offer the most amenable conditions for both lenders and borrowers, according to the latest research from real estate advisor, CBRE.
Based purely on pricing, lenders would be wise to consider less core markets for more attractive returns, although this does not account for other qualities including scale, liquidity and regulatory conditions that need to be considered, the research shows.
Amenable borrowing locations on the other hand were spread across Europe with Berlin, Madrid and Amsterdam in Western Europe, Helsinki and Stockholm in the Nordics and Bratislava, Prague and Budapest in Eastern Europe proving the most amenable locations for borrowers.
In addition to Budapest and Bucharest, the capital cities of Western Europe, including Dublin, Lisbon and London, were considered the most favourable locations for the lending community but scored less highly for borrowers with London deemed the least friendly location in Europe in which to borrow.
While there are five locations that are friendly to both lenders and borrowers, there are a further five that are considered unfavourable for both parties. These included the Western European markets of Brussels, Copenhagen, Vienna, Paris and Zurich.
'Our analysis of borrowing terms in 20 European countries shows that lenders willing to move beyond core markets will be rewarded with higher returns, as indeed they should be, given the lower liquidity and lack of maturity in many peripheral locations,' commented Marco Rampin, head of Debt and Structured Finance, Continental Europe, at CBRE.
While larger, more established markets may seem less appealing, lower returns may be compensated for by scale and perceived stability, he added.
A full copy of the CBRE European Debt Map can be found here.
