Corporate bond lending in the listed real estate will develop further in the coming years, according to Guillaume Poitrinal, chairman of the European Public Real Estate

Corporate bond lending in the listed real estate will develop further in the coming years, according to Guillaume Poitrinal, chairman of the European Public Real Estate
Association (EPRA) and CEO of Unibail-Rodamco. ‘As bank lending becomes more scarce and expensive, the bond market will develop,’ he told PropertyEU in an
interview.

‘The UK bond market already started developing in the early 1970s. But we will now see further diversification and sophistication on the Continent as well.’

Research by Kempen & Co reveals that Continental players are following the lead of their Anglo-Saxon counterparts in accessing capital markets for their financing
needs. While the loan books of UK large caps such as British Land, Hammerson, Land Securities and Segro mainly comprise long-term bonds, Continental European
listed real estate bond markets are still in their infancy.

However, a host of mainland European real estate companies - primarily retail specialists - are now looking to lock into low interest rates through the bond markets as a new source of financing to obtain seven to 10-year maturities. While banks generally offer only three to five years as a maximum, Corio recently issued EUR 2 50 mln in 10-year bonds and Unibail-Rodamco and Klépierre have also proved to be successful issuers of debentures in the last 18 months.

Poitrinal also expects more specialist REIT models emerging in the coming period.‘Compared to more mature REIT systems like the US, the European REITs are more
diversified in terms of sectors. This is probably due to the size of the relevant markets and to the specificities of the European countries. Being a prison or hospital REIT
in Europe is more complex than in the US. But we may see the development of a more specialist REIT model in the industry in the future.’

The full interview is published in the October issue of PropertyEU. Click here to subscribe: