Laxfield Group releases latest UK CRE Debt Barometer showing changing demand by sector, strong regional activity and pressure evident in retail

Laxfield has issued its latest UK CRE Debt Barometer, which provides a unique early indicator of changing patterns in the UK commercial real estate debt market by recording finance requirements at the earliest stage, when borrowers approach lenders seeking terms.

The report is sponsored by the Property Finance Forum, who support the work done with real loan data to provide participants with market information.

Laxfield collates active requests for real estate finance and compares pools of data quarterly to track changing patterns of demand. This report references requests for funding received since January 2013, drawing on a total sample of 2995 loan requests and more than £130bn of volume.

Key findings (period FY 2018 to present)

  • Increased demand for finance against mixed use and operational assets
  • Changing definition of core sectors
  • Strong demand through top ten regional cities, and muted activity in London
  • High loan count in the mid-market
  • Leverage requirements slightly elevated
  • Marked increase in leverage requests, and expected pricing for, the refinancing of retail assets

Commenting on the findings, Emma Huepfl, Co-Principal of Laxfield Capital said:

“Over the five years since we issued our first report, we have seen substantial changes in demand for finance.  Strong activity in the regions and mid-market show a healthy depth of activity despite the unresolved political backdrop.  As tenants demand more differentiated property, landlords need to anticipate change and be more aware of the need for ‘space as a service’.  Lenders need to pay close attention to the operational capabilities of their borrowers and ensure they are capitalised to invest in their assets and maintain occupier appeal”.

Rob Short of the Property Finance Forum, who sponsored the report, commented:

“Laxfield has identified changing market features and challenges in areas like retail which need to be properly understood to ensure a successful relationship between debt and equity through the cycle. We are pleased to support this work to broaden the discussion around debt market dynamics and help bring more transparency to the sector”.

The full report is available here.  Should you wish to discuss its contents further,  please contact Emma Huepfl.

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