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Capita Real Estate Finance launches unique analysis of real estate market

Capita Real Estate Finance has launched its inaugural ‘Market trend analysis’ report, a uniquely forward-looking report which documents the current market for real estate finance and the key trends.

Based on detailed lender survey data, the report focuses on lender appetite and policy and provides an opportunity to look to the year ahead.

Key findings include:

  • Hugely diverse lender pool with 12 distinct lender categories
  • Stability in pricing and leverage forecast to continue with increasing loan origination volumes
  • Long term borrowing is well priced at the moment but fewer lenders are able to provide it and income covenant requirements on such debt are high
  • A divergence in pricing between lender categories means there is more of a relative value consideration for borrowers to make
  • Almost everything is financeable – black spots of availability exist where two or more negative deal aspects combine (eg, undesirable sector plus weak location)
  • Allowing a longer time to complete a financing can result in superior pricing
  • Very little macro nervousness – lenders have broad ambitions to increase loan volumes as well as manpower.

The report aims to give borrowers a better idea of where to go to secure optimal financing solutions for any particular asset, portfolio or project.

At Capita Real Estate Finance, we wanted to do something different with this report. As one of the main sponsors of the De Montfort University’s Commercial Property Lending report, we didn’t set out to study historic data sets as De Montfort do a phenomenal job on that front. We wanted to take a forward looking snapshot of the market to find out what lenders can do and what they see themselves doing over the next 12 months.

James Wright

Head of Real Estate Finance

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