Real Estate Financing Barometer
High interest rates, lower LTV levels and more restrictive amortisation requirements challenge both existing and prospective issuers in the Belgian real estate market.
Check out our Real Estate Financing Barometer to find out more on the latest financing trends.
Real Estate Financing Barometer
Discover the latest financing trends
Business leaders are bracing for Europe moving into recession, with a worsening outlook for the regional economy as a whole and increasingly gloomy prospects for the real estate sector. Central banks have responded to above average inflation in 2022 with interest rate increases, and after many years of very cheap money, these rate hikes are rippling through real estate capital markets, with an impact on both the flow of funding available for investment and the corresponding terms and conditions.
When asked, 75% of European real estate sector leaders expect a decrease in the availability of finance. 70% expect availability of debt for development to decrease in 2023, and 64% feel that debt for refinancing or new investment will decrease. Respondents are more negative about the prospects for new lending from pension funds and insurance companies than any other type of lender except banks. Confidence in the availability of debt has not been this low since 2012.
Source: Emerging Trends in Real Estate® Europe 2023, n = 900
Debt & structured finance advisory services
Our dedicated debt advisory team assists real estate clients with debt advisory and arrangement services across a broad range of property asset classes and project financing needs, including for public-private partnerships (PPPs). We work closely with investors and developers to set out an appropriate (re)financing strategy tailored to the asset and/or project. We can then approach our network of debt providers (including banks, institutional investors, private equity players and mezzanine lenders) with whom we have long standing relationships.
We leverage our business planning and structuring skills to set up a well-defined approach for securing financing. Our structured process includes preparing the information package needed by debt providers (business plan, structuring paper, info memo, draft term sheet), assessing the appetite in the market and negotiating the right terms and conditions with potential lenders.
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Why PwC for real estate debt services?
We combine capital market expertise with extensive hands-on commercial real estate experience. Our ongoing involvement in the structuring of transactions means we’re ideally placed to assist our clients in attracting funding under the right terms and conditions through a structured process (including sharing sensitivity analyses with debt providers following the structuring). We leverage our extensive network, in-depth experience of the real estate and project finance sector and technical skills in financial modelling and structuring to make debt advisory the logical next step in creating additional value for our clients’ transactions. In addition, we can bring in support for all aspects of the transaction, including expertise on legal, tax, regulatory, banking and M&A aspects.
Grégory Jurion
“In the current climate we see that investors are becoming ever more cautious, across all asset classes. They’re very selective in choosing where to increase their exposure, and real estate is no exception. Many industry leaders believe liquidity will decrease further, putting pressure on terms & conditions for financing new developments and refinancing operations. The same is true for public-private partnerships. Funding for PPPs is crucial, to maintain the flow of investment from lenders and private partners into the infrastructure of tomorrow. The need for expert matchmaking between debt providers and real estate developers is making itself felt like never before.”
Grégory Jurion, Partner & Real Estate leader, PwC Belgium
Geoffroy Jonckheere
“In a challenging market debt providers tighten their conditions and slow the pace of their activities. Maintaining proximity to them and being able to tailor the transaction to the specific needs of both lender and borrower is essential. In that sense, our debt advisory services are a natural extension of the support we provide our clients for real estate and project finance transactions. We’re already deeply involved in the structuring and financial modelling; leveraging on our network to create additional value in the deal by arranging funding is the next logical step.”
Geoffroy Jonckheere, Partner & Real Estate Deals leader, PwC Belgium
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