Bank financing of property investment and development projects has taken a “big step forward” in Europe, according to KPMG’s Property Lending Barometer 2015.
This is the 6th edition of KPMG’s annual survey of banks’ real estate financing. It assesses the prospects and sentiment for bank financing in the real estate sector in Europe based on input from more than 90 banks from 21 European countries.
The recovery in real estate lending, according to the report, is most tangible in the more developed European economies; less-established economies are still under pressure to deal with the impact of the global financial crisis. Due to the large proportion of impaired loans, however, these economies, as outlined in the study, could very well be potential targets for those looking to acquire distressed loan portfolios.
KPMG’s Property Lending Barometer 2015 also details the prospects and terms available to real estate developers and investors, offering up the specifics of the markets as well as respondents’ expectations for the next 12-18 months: invaluable information for those seeking bank financing in European markets.
Individual country profiles of each country surveyed delve into the respective markets.
The lending market in Bulgaria
The slow economic recovery and relatively high non-performing loan ratio is keeping pressure on the banking sector.
Banks were more optimistic about their own portfolios, where half of them indicated that their portfolio size would increase in the next 12-18 months. Compared to the previous year, the answers suggest more positive expectations towards expansion in the lending market. The banks report that they will still prefer income-generating projects compared to new developments.
In terms of segment, office, followed by residential and industrial, is the preferred asset class for banks in case of development financing.
For more insights on the lending market in Bulgaria and Europe and its prospects for the future, go to KPMG’s Property Lending Barometer 2015.