Lenders are predicting an upbeat outlook for the European real estate investment market this year, despite fears of a Brexit and the China market slowdown posing greater uncertainty, new research finds.
Cushman & Wakefield’s latest European lending trends report found that more 90 per cent of the 60 leading European lenders surveyed – who collectively provide over €80bn of loans – plan to maintain or step up their activity this year compared with 2015.
The UK, France and Germany remain the key markets, with those countries expected to represent 50 per cent of anticipated lending activity in 2016. Spain is also expected to see a step up in deals, suggesting an increased appetite for risk there, as well as the Nordic countries. This is in contrast to Italy where a desire to lend remains weak, the property firm said.
Cushman & Wakefield’s head of capital markets research, Nigel Almond, said despite a stable outlook, there were a number of threats to the lending market, including the risk of Britain exiting Europe, which 16 per cent of respondents cited as a risk.
The impact of the slowdown in China on the property market was cited as a threat by 15 per cent lenders compared to just four per cent in Cushman & Wakefield’s survey last year.
Meanwhile the weight of capital in the property market remained the biggest threat although at 39 per cent, this was much reduced on 58 per cent last year.
“Despite these headwinds commercial real estate investment markets still offer good investment opportunities and demand remains which will support the positive sentiment in this survey,” Almond said.