Funding strategies in the real estate sector
A recent ING REF survey among European real estate experts reveals a resilient industry, looking to diversify its lending sources and gain more independence from banks, which have curtailed equity and loan issuance in recent years.
Among other findings, the survey highlights the benefits of:
- increasingly diversified portfolio lending: borrowers have recognised that single asset lending is not the only optimal funding strategy
- syndication: clients acknowledge the need to diversify their funding sources and seem willing to pay extra for it
- country-specific strategies: clients increasingly value the local knowledge and relationship with a specialist real estate lender based in their country.
Jan-Evert Post, member of the Global Management Team at ING Real Estate Finance, about the report: "This survey sheds light on a transforming industry, well placed to capitalise on the opportunities that increased economic growth will provide. More use of diversified cash flows from a portfolio of properties as basis for a loan structure will benefit borrowers and lenders alike, especially now players recognise that funding must come from a variety of sources - including non-bank lenders. These trends, together with a strong on-the-ground relationship between borrower and lender will definitely assist in regenerating the industry."
The 2013 Nyenrode Survey was conducted by Nyenrode Business University from the Netherlands and ING Real Estate Finance (ING REF), amongst ING Real Estate Finance’s clients in the European listed and institutional real estate sector.
ING REF also recently published its annual survey into the financing policy of Dutch non-institutional real estate investors. Click here for the news item and downloads.