European real estate lenders have not reached annual lending targets for this year and are now “chasing” deals and competing on loan-to-value terms, according to the team at real estate debt software company FinLoop.
The company said the summer months had seen a return of financing requests for retail and hotel assets, with shopping centres and high street retail having gone through “a significant repricing cycle and are believed to have reached fair value”.
Office deals “have made a notable comeback” so far this year, FinLoop said, representing 25% of all financing requests, second only to residential development financing at 34%.
Across the market as a whole, however, the expected transaction pick-up in 2024 “has so far not materialised”, the team added.
Thomas Schneider, co-founder of FinLoop, said: “Borrowers are still clinging to overvalued assets, while bargain-hunting investors are finding limited opportunities. We now anticipate a market tipping point in 2025.”
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