Significant Opportunity for Nonbank Lenders to Grow Market Share
The European commercial real estate (CRE) debt market presents a significant opportunity for nonbank lenders to enter and grow market share.
Regulatory change has affected the UK commercial real estate debt market with the introduction of slotting; Basel III finalization will have further impact on reducing bank appetite for lower-credit-risk exposures, which will be felt especially across the rest of Europe.
As banks continue to restrict lending to certain parts of commercial real estate, it will create opportunities for nonbank lenders across the risk spectrum of debt strategies.
We expect the transfer of debt capital from banks to nonbanks to happen more quickly than originally anticipated, accelerated by the COVID-19 pandemic. The size of the opportunity for nonbank lenders in Europe could potentially reach €720 billion (US$900 billion).