The number of investors chasing European real estate has fallen to 3:2 in the wake of the global credit crisis, Tony Horrell, head of European capital markets at Jones Lang LaSalle, said in an interview with PropertyEU at Expo Real. 'Earlier this year, we were looking at a ratio of 5:1.'
The number of investors chasing European real estate has fallen to 3:2 in the wake of the global credit crisis, Tony Horrell, head of European capital markets at Jones Lang LaSalle, said in an interview with PropertyEU at Expo Real. 'Earlier this year, we were looking at a ratio of 5:1.'
The changed financial conditions have impacted particularly on the highly leveraged players, who are now having to put more equity into a deal at a higher cost. Horrell: 'In the past, they could get 90% leverage, now they're looking at 75% and they have to negotiate with three or four different lenders instead of one. At the same time, interest rates have gone up by as much as 100 basis points.'
Nevertheless, a significant number of owners are still bringing properties onto the market, he added. 'There’s greater uncertainty about what prices will be doing in the next few months and some owners are simply afraid to wait.' Horrell said he had seen no change as yet in the pricing of core products in core markets, but pointed out that there are still a lot of equity players about. 'The core products seem to be holding up well but we’re waiting for the evidence. Things should become clearer in the next quarter.'