The Eastern European markets of Budapest, Bucharest, and Warsaw, in addition to Milan and Oslo, offer the most amenable conditions for both lenders and borrowers, according to the latest research of the leading global real estate advisor, CBRE.
CBRE has developed an analysis to determine lender and borrower friendliness in 20 markets across Europe. In addition to Budapest and Bucharest, the capital cities of Western Europe, including Dublin, Lisbon and London, were considered the most favourable locations for the lending community but scored less highly for borrowers with London deemed the least friendly location in Europe from a borrower point of view.
Based purely on pricing, the CBRE analysis therefore shows that lenders would be wise to consider less of a core market for more attractive returns, although this does not apply to other qualities including scale, liquidity and regulatory conditions that need to be considered.
Amenable borrowing locations on the other hand were spread across Europe with Berlin, Madrid, and Amsterdam in Western Europe, Helsinki and Stockholm in the Nordics, and Bratislava, Warsaw, and Budapest in Eastern Europe proving the most amenable locations for borrowers.
Whilst there are five locations that are friendly to both lenders and borrowers, there are a further five that are considered unfavourable for both parties. These included the Western European markets of Brussels, Copenhagen, Vienna, Paris, and Zurich.
Marco Rampin, Head of Debt and Structured Finance, Continental Europe, CBRE comments: “Our analysis of borrowing terms in 20 European countries shows that lenders willing to move beyond core markets will be rewarded with higher returns, as indeed they should be, given the lower liquidity and lack of maturity in many peripheral locations. Whilst larger, more established markets may seem less appealing, lower returns may be compensated for by scale and perceived stability. Few borrowers or lenders will have a presence across all 20 geographies, with many showing some bias towards certain locations. It is therefore more important than ever for both parties to seek professional advice when navigating the complexities of the European debt markets.”