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.