In Bloomberg, Jackie Bowie discusses how upcoming debt payments will affect the commercial real estate market
Summary
Rising borrowing costs and falling valuations have European commercial real estate investors bracing for a new wave of pain. Bloomberg asks Jackie Bowie how the maturity of this debt will affect the market.
Jackie Bowie in Bloomberg“The maturity wall could be a catalyst for transactions to happen because if borrowers are not able to refinance, they will have to exit,” said Jackie Bowie, head of EMEA at Chatham Financial. “You’ll have more assets sold in the market, I suspect, at distressed levels.”
Property companies have about $165 billion of bonds maturing through 2026, while banks are reducing their exposure to the industry and credit costs are at their highest since the financial crisis.
“The maturity wall could be a catalyst for transactions to happen because if borrowers are not able to refinance, they will have to exit,” said Jackie Bowie, head of EMEA at Chatham Financial. “You’ll have more assets sold in the market, I suspect, at distressed levels.”
The price of prime office buildings in Paris, Berlin and Amsterdam dropped more than 30% in 12 months, according to broker Savills Plc.
“Sentiment is still pretty bad and that’s what’s reflected in this market pricing,” said Bowie at Chatham Financial.
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