Debt here to stay as market's driving force

April 2003
EuroProperty;2003, p36
Trade Publication
With investors finding it easier than ever to finance deals, there are fears that interest rate hikes could leave owners with a debt burden. With interest rates at historically low levels, bank lending has become one of the European property market's main driving forces. The conducive lending environment makes it difficult to judge whether debt is becoming fundamentally more important, or if its increasing role in the sector is a trend that will merely track interest rate levels, with lending now reaching a peak. Development finance is certainly a no-go area for most banks. Banks are willing to fund the purchase of income-producing assets, but not those with some vacant space. With income-producing assets remaining a popular investment choice, the main fear is that difficulties will occur if there is a hike in interest rates.


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