European banks are losing market share to new commercial-property lenders in the region as investors take on greater risk and banks repair their balance sheets to meet stricter capital regulations.
Alternative lenders including insurance companies, private equity and debt funds now account for 40 percent of the 182 credit providers in Europe, up from 16 percent in the first quarter of 2012, according to a report today by Cushman & Wakefield Inc.’s. corporate finance unit. Demand for superior returns has led more lenders to Spain, Portugal and Italy, the New York-based broker said.
“Lenders are aggressively competing for the right assets with strong fundamentals,” Mike Morrison, a partner in Cushman & Wakefield’s corporate finance group for Europe, the Middle East and Africa. “This profile has now extended to locations and sectors that would not have been attractive six to 12 months ago.”
New lenders moved in as banks struggled to sell or restructure loans that soured after the financial crisis, according to the report. The U.K., France and Germany are the most active markets for lenders, attracting 60 percent of the 32.7 billion euros ($44 billion) of loans issued in the first half, according to the report.