European property market looks up
Europe’s largest property firms will focus on the difficulties of raising cash for acquisitions in a market ravaged by falling values and tight credit when they meet this week for one of the industry’s biggest gatherings. Delegates at the European Public Real Estate Association (EPRA) conference in Brussels will also sound out their peers on when the global commercial property market will recover and how long the continued credit famine could delay that process
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Since mid-2007, most European property markets, led by Britain, Spain, and Ireland, have seen commercial property booms wilt in the wake of the U.S. subprime mortgage crisis, and the biggest banking market turmoil since the 1930s. Now is the time to look forward, delegates told Reuters ahead of the annual event, which is now in its 10th year. British Property Federation (BPF) Chief Executive Liz Peace said raising finance to fund acquisitions was critical to the onset of market recovery, as banks remained reluctant to lend.
“The really interesting thing, from my perspective, is what can the public markets do about this? How do we use the public markets to re-capitalise?”
Robin Hubbard, an executive director of real estate broker CB Richard Ellis (CBRE), said he was curious to know when new lenders would fill the void left by shell-shocked banks.
“How quickly that’s going to happen is going to be a key determinant of how much underlying activity there is in the market,” Hubbard said.
Reinier van Gerrevink, CEO of Dutch property group VastNed, said rising share prices on global equity markets implied that now was the time for companies to issue equity, convertible bonds or other instruments. “At the back of this development the investment markets could flourish again,” he said, although he admitted it was still unclear what segments of the commercial property sector would lead the recovery.
Outside the conference sessions on capital structures and market opportunities, there would be plenty of networking, but little in the way of deal making, several of the delegates said.
REUTERS
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