It is striking that large parts of the European CRE finance market are dominated by short-term, floating rate bank loans, notwithstanding the fundamentally long-term nature of real estate as an underlying asset class. While such bank loans provide flexibility that is valuable to many and obviously has an important role to play in the overall market, we believe that markets like the UK’s would benefit from a stronger presence for longer-term and fixed-rate loans.
A bigger market share for such loans would enhance competition and choice for borrowers, as well as strengthening financial stability and the resilience of credit flows to the CRE sector across the cycle.
If there is interest from the industry, we would like to form a working group to develop the case for longer-term and fixed rate loans with a view to seeking to popularise them to the borrower community.
Please contact the chair or Peter Cosmetatos on +44 20 3651 5696 or email@example.com if you have questions or would like to get involved.