Experts see CMBS returning in 2012: Hatfield Philips

The moribund commercial mortgage backed securities (CMBS) market is expected to revive within the next two years, according to a new report issued on Tuesday by special services Hatfield Philips.

About 45% of industry experts polled for the report expect a return of CMBS in 2012, while a further 25% is forecasting a comeback in 2013.

The survey, which included leading banks, fund managers, VC providers and other key industry experts, showed that 45% of respondents believed the UK had further to fall with over a third predicting this could be anything up to 10%. However, despite this, 91% of respondents thought investment in commercial property will increase over the next five years, of which almost a third (28%) believe it will increase by over 20%. In the same research, respondents showed an appetite for the secondary market with almost two thirds considering investing.

In other markets, 42% of respondents thought commercial property prices in France still had further to fall, with a similar amount for Scandinavia (43%). Germany on the other hand was the country where most people (66%), believed that property prices had bottomed out, whereas with both Spain and Ireland, 88% of people believed property prices were still on the decline, with 46% predicting a fall of between 10-20% for Spain and 30% for the same fall in Ireland and 40% predicting a greater than 20% fall.

'It is reassuring to see that many lenders and commercial property experts are expecting to see a return to the CMBS market as early as next year,' said Clarence Dixon, managing director of Hatfield Philips. 'For a return to volume CMBS transactions, however, much will depend on how quickly the global economy regains equilibrium and moves towards sustained growth, which is why we are also witnessing the continued correction, albeit, in my opinion the tail end, of the corrections in commercial real estate prices across Europe.'