Outlook for lending still limited in 2011 – Jones Lang LaSalle
Banks are still only lending in limited amounts to the UK’s property sector, says Jones Lang LaSalle. The firm’s 2001 Lenders’ Expectations report shows that although more respondents this year were prepared to lend between £50m and £100m, fewer than 40% of those surveyed expected to lend above £100m by the end of this year – less than the 50% in last year’s report.
Many lenders to the property sector expect financing to pick up in 2012 with larger deals of more than £600m forecast in line with expectations for a recovering market. Activity will remain dominated by refinancing, with almost 50% of lending focused on this area, and a number of respondents said that refinancing would take up between 70% and 80% of lending.
The offices sector is the most popular by far for new lending, with an average weighting of 40% for each of the next three years. As might be expected, lenders like the transparency of the London offices market in particular – and the focus remains on prime investments, although some respondents think that the increasing amount of secondary assets forecast to come onto the market will become more financeable.
