Europe’s credit report

The panel and their predictions

Frank Billand, CIO, Union Investment Real Estate
“Provided there is no major turmoil from the debt crisis, there’s no reason we will see a big game changer in the near future. I think the German funds will be very active in the market.”

Stephen Turner, partner, Baker & McKenzie
“It’s so unpredictable. I like to think it will be better in a year’s time, but I think there will be as many negatives as there will be positives, so it will probably be much the same.”

Charles Daulon du Laurens, Head of investor relations - CRE finance, Axa Real Estate
“What is clear is, in an investors business, the commercial real estate loan is really something that people have become more and more familiar with. I think that will continue. There has been a real change in the last six to nine months. You can get the same or even better returns from buying loans, and they are probably more secure.”

Arthur De Haast, CEO of corporate finance EMEA, Jones Lang LaSalle Corporate Finance
“Because banks are keeping liquidity out of the market and because everybody is focused on the “core core” element, we will start to see investors take more risks. I don’t think there will be a game changer but I’m optimistic that we will see more activity.”

Boris Schran, partner, Peakside Capital
“We are going to stay highly dependent on politics in the market. The whole performance in the real estate markets will depend on what happens to the interest rate environment and the stability of the European governments. Generally, we expect Europe to remain a low-growth environment in the short-to-medium term, although we anticipate there to be periodic eruptions of volatility and we are prepared to make the most of that opportunity.”

Dominique Lechien, partner, Baker & McKenzie, global real estate head
“There is an issue from the currently closed German open-ended funds that needs to be thought through, which is how German open-ended funds that will be liquidated in the coming months and years will handle the properties that they have not been able to sell before the end of their liquidation period. This is something that could create some tension on the property market but it is also an opportunity. There should be market players who will be interested in taking advantage of these opportunities.”

Jessica Hardman, head of transactions - UK and Ireland, Deutsche Alternative Asset & Wealth Management
“I think there will be some small improvement in the market this year and I think investors will make the move to more high risk. Banks may start to provide finance to secondary assets in London or for good business plans/assets outside London, to coincide with the uptick in investor demand. I suspect that UK banks will be the first movers here because of intense competition to finance prime London assets, which have pushed down margins and making it hard to compete. But this healing of the finance markets could be knocked off course by impending regulation which may reach resolution this year.”

Emilie Ciuntu, senior director, CBRE Global Investor
“I don’t think things will be hugely different in a year’s time. The challenges for the year to come, namely a wave of maturing loans including CMBS, liquidation of “closed” GOEFs [German open-ended funds], are likely to result in a significant pipeline of distressed assets sales.”

Florian Thamm, partner, Baker & McKenzie, global real estate head
“The market will continue to be very challenging but it will offer all kinds of opportunity as well. The market for distressed assets will get bigger over the next years.”

Mike Phillips, acting editor, Property Week

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