The next substantial output building on the 2014 report, A Vision for Real Estate Finance in the UK, is published this week, a decade after the last property cycle peaked at the end of Q2 2007. The new report sets out the results of research into the effectiveness of three alternative methodologies for determining a long-term property value metric that lenders might use to help manage cycle risk. CREFC Europe has been closely involved in this work, which has been conducted with the support and encouragement of the Bank of England, and we have co-sponsored publication of this report.
The expectation is that the eventual conclusions of this work will feed not only into lender risk management practices, but also into the regulatory framework for protecting financial stability and ensuring that underwriting standards are maintained in the exuberant phase of the property cycle. Please read the report and provide feedback to Peter by 15 September, if you would like your views to be heard regarding where we go from here.
The commercial real estate finance industry will consider the implications of the Tories, Trump and the French election results along with a range of other topics next week at the CREFC Europe spring conference.
Read the full Press Release here
We have joined a number of national and international CRE industry bodies in agreeing a statement on Brexit with a view to informing the negotiating approach of European policymakers.
A new edition of Commercial Mortgage Loans and CMBS was launched at CREFC Europe’s Autumn Conference. The book, titled ‘Developments in the European market’ is an essential guide to those in the CRE and CMBS industry.
It gives detailed coverage of existing CRE lending and CMBS markets post-financial crisis and Brexit, the legal and regulatory environment and the restructuring of existing deals and transactions.
We have a limited number of copies available to purchase at a discounted price of £75 (RRP £195). Please contact Rachel here if you would like to purchase a copy.
The largest CRE debt Conference in Europe attracted over 400+ delegates over two days and provided a platform for commercial real estate (CRE) finance market participants to come together to learn about and discuss the latest trends and challenges facing the industry.
You can view the highlights from our Autumn Conference here
Since the global financial crisis, there has been an understandable focus in Europe and beyond on the risks that CRE debt can present for financial stability. Indeed, CREFC Europe has supported initiatives such as A Vision for Real Estate Finance in the UK that seeks to help policymakers approach our sector in a more strategic, holistic and informed way.
What has been missing is a broader recognition that debt has a vitally important role to play in supporting investment in the real economy and the built environment. Without a sensible supply of reasonably priced credit for the CRE industry, Europe’s towns and cities would be unrecognisable, and the availability and cost of premises would be much higher for ordinary businesses. In recent years, we have also seen an explosion of interest in CRE debt as an investable asset class in its own right, albeit one with low levels of transparency outside the traditional, but much diminished, CMBS space.
Alongside three other industry organisations, the APL, INREV and ZIA, we have commissioned a major research report that seeks, for the first time, to describe the role that debt plays in the European CRE economy and for investors. We aim to use it to educate European policymakers and others about our sector, and encourage our members to make use of it too.
Collaborating with our colleagues across the pond, CREFC Europe members and staff provided the content for an impromptu CRE Finance Council conference call on the political, economic, legal and commercial landscape following the outcome of the UK’s EU referendum. Andrew Petersen of K&L Gates, Mark Battistoni of Chatham Financial and Peter Cosmetatos discussed the issues and responded to questions from more than 200 participants on the call. The audio recording is available here.
Negative interest rates have real-estate investors facing a counterintuitive quirk: their borrowing costs can actually rise as interest rates fall.
This is a mounting concern for many property investors given the potential for rates to decline further as central bankers try to spur economic growth, according to lobby group CREFC Europe.
View article here.
Sustainable and responsible securitisation markets have an important role to play in the commercial real estate (CRE) debt market, as they do in other parts of the financial system. Unfortunately, the criteria that international regulatory bodies have been developing to encourage simple and transparent securitisation ignore key aspects of the CRE debt market. As a result, an important opportunity to improve the resilience and diversity of CRE debt markets is likely to be missed. Click here to view the key points.