U.K. Commercial Property Buyers Seek More Debt as Economy GainsNeil Callanan
U.K. commercial real estate investors are willing to take on more debt for new deals as a rebound in the commercial-property market gains momentum.
The average loan-to-value ratio sought by investors increased to 58.3 percent in the third quarter from 43.6 percent in the first three months of 2013 as more properties were sold and confidence grew that financing would be available, according to a report today by mortgage firm Laxfield Capital Ltd.
Demand for mortgages is “spreading more widely and away from safe-haven assets,” Emma Huepfl, head of capital management at London-based Laxfield, wrote in the report. “We also see new lending opportunities in the regions and an overall improved confidence in the availability of real estate finance.”
U.K. commercial real estate values rose for a sixth straight month in October as Britain’s economic recovery gathered pace, Investment Property Databank Ltd. said last month. Most demand for financing this year has come from office-building investors at 36.8 percent of all requests by value, followed by buyers of stores and shopping malls at 22 percent, according to Laxfield.
The company analyzed 25 billion pounds ($41 billion) of commercial real estate loan requests this year as part of its first report tracking demand. Laxfield has originated and managed more than 500 million pounds of commercial mortgages this year, it said in the report.