Real estate debt funds face their day of reckoning
Euromoney, is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2024
Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Real estate debt funds face their day of reckoning

Exterior of Google office Headquarters in London, UK
Photo: iStock

As Europe’s economic mood sours, a sharp rise in interest rates is putting commercial real estate through its first big cyclical turn since 2008. The non-bank sector, which has become a vital enabler of funding at higher leverage, now faces a test of its resilience.

Like a cruise ship docked between King’s Cross train station and the Eurostar terminal, Google’s vast new London headquarters is nearing completion in one of Europe’s best-connected locations. Complete with solar panels and rotating timber blinds, the so-called 'landscraper' will have a 300-metre-long garden on the roof, a swimming pool, a games room and space for 700 bicycles.

Alas, not all of London’s commercial real estate market is like this.

Eight miles to the east, a bland 21-block office development once touted by Boris Johnson as a second Canary Wharf – and a centre for Chinese and other Asian companies operating in Europe – is mostly empty, three years after it was finished.

Johnson gave Beijing-based ABP Group the right to develop the Royal Albert Dock in 2013, when he was mayor of London. The £1.7 billion project has since suffered from souring relations with China, delays in opening the nearby Crossrail station, and the post-Covid office exodus.


Dominic O'Neill head.jpg
EMEA editor
Dominic O’Neill is EMEA editor. He joined Euromoney in 2007 to cover emerging markets, focusing on central and eastern Europe, Middle East and Africa, and later on Latin America. Based in London, he has covered developed market banking since 2015.
Gift this article