Lenders will return to real estate by next Easter, ending the paralysis in the investment market, a top global investor told property industry leaders this week.
Michael Pralle, who this month announced he would become president and chief operating officer of US group JER Partners after 18 years at GE, was speaking at the British Property Federation’s annual lunch before 1,000 property industry chiefs.
`We have good fundamentals in the global economy and in real estate,’ Pralle said.
`It’s nothing like the early 1990s, when supply fundamentally outweighed demand [of real estate].’
While a market slowdown in the first half of 2007 has been followed by the market seizing up as banks have dramatically reined in their lending, Pralle said all was not lost:
`My view is that in the next four to six months lenders will come back – because fundamental liquidity globally is still there.’ American banks and equity investors all around the world still have money to devote to property' he said.
Adding: `However, when lenders return it will not be at the same pricing levels, because from 2002 to June this year risk became mis-priced.’