Real Estate Debt Market News

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We recently launched our first Commercial Real Estate Market Monitor, which provides an independent view for real estate professionals, analysts, researchers and investment managers.

The monthly report gives fresh insights into how debt and capital markets are valuing financial instruments, drawing upon key academic research for identifying leading indicators within capital markets. Information is drawn from a universe of more than 350 listed European real estate companies, European bond and CMBS issuance for Euro and Sterling bond markets list on Bloomberg and Thomson Reuters.

The European real estate debt market has experienced some significant changes since the Pandemic has started. The European real estate fixed income market has grown since 2012 but nearly doubled between 2020 and 2021 alone. In 2021, bond issuance reached €78bn compared to €43bn in 2020. Real estate companies have significantly been taking advantage of raising public funding during the pandemic while traditional bank lenders have become more selective with their mortgage approvals. This growth far exceeds any previous years and addresses the shortages of funding through banks loans across Europe.

The majority of funds were raised for maturities from 3 – 5 years at very low interest rates below 1%. With no change in interest rates we expect this market to growth further in 2022. Up to now only one third was considered green funding but with increasing ecological and socio-economic awareness and demand for ESG fixed income products from investors, property companies can raise more funds for a better build-environment.