A significant increase in lending activity can be expected this year for companies that use debt financing to develop their real estate portfolios, according to a pan-European CBRE survey. The year-on-year improvement in market sentiment across commercial real estate sectors was confirmed by 40% of respondents.
Almost 80% of companies plan to strengthen their lending activities, with the main reason being the refinancing of existing loans (56%), followed by securing funds for the implementation of new projects (21%) and acquisitions (15%). Their share even increased by 9 percentage points year-on-year.
The source of financing is expected to be mainly non-bank lenders, including debt funds, insurance companies and investment banks. They are more optimistic about the growth of lending activity than the traditional banking sector.
Rental housing holds the lead in Europe this year with a 48% share of loan financing. Industrial and logistics properties, which last year shared first place with rental residences, fell to second place, while hotels rose to third place with a 14% share.
“As in the previous year, this year’s survey confirmed that over 80% of companies are ready to invest in alternative assets. This segment is currently dominated by various housing sub-sectors such as private residences for the elderly and co-living projects. Storage cubicles and mini-warehouses for companies and individuals have newly risen to fourth place,” says Chris Gow, head of debt and structured finance for CBRE in Europe.
The survey also revealed that the key threat to the European credit market is the unstable geopolitical situation, which is perceived by almost 70% of respondents. This is a dramatic increase compared to last year, when only 37% of companies shared such concerns.
Jakub Štěpán, Head of Valuation at CBRE for the Czech Republic and the CEE region, adds: “The situation in Central Europe, including the Czech Republic, is specific. The trend of more massive construction of data centres or storage cubicles and mini-warehouses has not yet arrived here, but we are monitoring increased activity in these segments. In our conditions, debt financing is still dominated by more traditional properties, such as shopping centres and retail parks, premium offices and now also to an increasing extent hotels. After the recent sale of the Hilton Prague hotel, other large transactions are planned on the market.”
Most lenders in Europe are willing to provide loans with an LTV ratio in the range of 50-60%. There are minimal differences between individual sectors. The exception is rental projects, where the LTV ranges from 52.5 to 65%. Data centres (50-65%) also show a wider dispersion with a median of slightly above 50%.
The survey also found that sustainability has become an integral part of most companies’ lending strategies, with more than seven in ten respondents saying they would refuse to finance assets that do not meet sustainability criteria or do not have a plan in place to achieve them.
The CBRE survey was conducted in March and April 2025 and included 143 leading companies from across Europe.
