Fears were already growing about dangers lurking in US commercial real estate even before the wave of turmoil that has hit banks in the last two months. After the pandemic and a rush of rate hikes, there is little debate that the sector is at a turning point – the question is whether something worse is on the horizon.

Australian banks adore residential mortgages. But they are ignoring a cohort of people who are going to run into a lot of trouble with repayments.

Commercial real-estate losses will not greatly damage big banks in Europe, but the banks themselves could inflict real damage to commercial real estate.

Higher interest rates will weigh heavily on the property development lending that makes up the bulk of OakNorth’s loan book. But chief executive and co-founder Rishi Khosla tells Euromoney the bank can maintain its ultra-low loan losses and keep growing.

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.

The gating of Blackstone’s $69 billion private real estate fund Breit highlights the risks in semi-liquid investment vehicles, even ones that perform strongly. Pitching US private market exposure to European and Asian retail investors may be slowed by the setback.

Beijing recently ordered its state banks, including ICBC and Bank of China, to plough $162 billion worth of fresh credit into the country’s troubled property sector. In doing so, they look not proactive but panicky. A negative hit on lenders’ profits is inevitable.

As the cost of debt nudges higher than potential yield, real estate investors are re-evaluating their exposure to the sector.

China’s property sector is in freefall and Covid lockdowns are throttling growth as bad loans pile up at the banks. As president Xi Jinping prepares for an unprecedented third term, a deluge of crises threatens to destroy the country's four-decade economic miracle.

With more than 220 million homes to renovate, banks must provide the necessary funding to avoid being left with non-compliant housing assets. But a lack of standardized data on energy performance certificates makes it difficult to justify lending to some homeowners.

Portion’s Jason Rosenstein explains why he paid $1.2 million for a plot of virtual land amid the goldrush of corporations launching their brands in the metaverse.

As more Chinese high-yield names default in the real-estate sector, one of the region’s leading distressed debt investors shares his views on the state of the market – and the investment opportunities that come with it.

Asian high yield has always been dominated by Chinese real estate, so the Evergrande crisis has shut down the market for new issuance. Is this the chance for non-Chinese issuers to step up?

Global investors shrug off Evergrande’s woes and welcome a new link to China’s onshore bond market.

A consensus that Evergrande’s failure will be more like the LTCM unwind than the Lehman bankruptcy could underplay ongoing challenges in hedging Chinese exposure.

Global investors want to know if troubled Chinese developer Evergrande can meet its bond repayments – but far bigger risks exist, from local government bond defaults to badly run banks exposed to overleveraged developers.

Evergrande is in trouble, drowning in debt and besieged by angry investors. It is bad news for shareholders, but it also raises harder and darker questions about investing in China.

Covid-19-fuelled supply chain disruption is helping to funnel global real estate demand to residential, life sciences and logistics.

Ever since the launch of Vision 2030, housing has been a key priority for Saudi Arabia. Along with the home building has come a vibrant mortgage market, the formation of a secondary liquidity provider and the building blocks that will lead to a new securitized asset class in global markets.

Real estate investment trusts are the mainstay of Singapore listings, a rare example of liquidity and foreign interest in an otherwise dull local bourse. Two contrasting mergers tell intriguing stories about where the Reit market goes from here.

Nothing in China is straightforward, but everything happens for a reason.

The Euromoney Real Estate Survey 2020 is our 16th annual survey of the global real estate markets and canvasses the opinions of the leading firms involved in the real estate sector worldwide.

The long lines that have appeared outside reopened retail stores will not be enough to stave off the inevitable crisis in commercial real estate.

China has moved closer to approving its first onshore real estate investment trusts. When tax and gearing issues are overcome, the market could overtake the US to be the world’s largest, bankers say.

Mindspace hopes to raise more than $150 million in IPO slated for the end of March; more Reit sales to follow in Mumbai during the next 18 months.

Global results

The Euromoney Real Estate Survey 2019 is our 15th annual survey of the global real estate markets and canvasses the opinions of the leading firms involved in the real estate sector worldwide.

OUE real-estate investment trust (Reit) merger follows Viva-ESR; hope is to create better liquidity in stocks.

India’s first real estate investment trust is being fast-tracked to IPO before the end of February. Bankers expect the primary offering to raise more than $1 billion, giving a much-needed fillip to the country’s capital markets.

After a few years of underperformance, India’s property market is back on form. Prices are rising in commercial and residential real estate, with demand driven in large part by inward investment from blue-chip US corporates. The next big step is listed onshore real estate investment trusts, set to hit the market in 2019.