The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Capital Markets

European CMBS forced to the brink

For those dependent on the European commercial mortgage-backed securities market for funding, the credit crunch has prompted a round of soul-searching. The market may be closed for the next six months, forcing some to look elsewhere. What will it take to prompt a revival? Laurence Neville reports.

Relationships count for investors


lre-postliquid.gif

The financial crisis that has engulfed much of the world since July 2007 has hit the European commercial real estate market hard. Headlines have become ever more lurid, as property values falling by a quarter prompted some investment funds to bar redemptions – £1.65 billion was withdrawn in the fourth quarter of 2007 compared to £139 million in the third, according to the Association of Real Estate Funds.

To date, the only forced sale, according to market observers, involved the UK-based Westport Land, that was unable to refinance its highly leveraged £95 million loan with Capmark Bank Europe (the former GMAC) in September. Nevertheless, some institutions are known to be slimming down their portfolios through private sales rather than high-profile public deals that would realise lower values.

Unsurprisingly, this market environment is resulting in lower commercial real estate investment transaction volumes in Europe. Figures from Jones Lang LaSalle show a fall of 13% in 2007 to around €220 billion – with much of the fall occurring in the second half. Moreover, the real estate services firm estimates that transaction volumes will decline a further 20% in 2008.


You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree