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European Real Estate Debt ERES 2010 24 th June 2010 Iryna Pylypchuk, Associate Director,

European Real Estate Debt ERES 2010 24 th June 2010 Iryna Pylypchuk, Associate Director, EMEA Research & Consulting, CB Richard Ellis. Investment market turnover in Europe. € Million. Source: CB Richard Ellis, Property Data, KTI. VIX (Daily Close) and CBRE EU-15 Office Yield. 96. 97.

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European Real Estate Debt ERES 2010 24 th June 2010 Iryna Pylypchuk, Associate Director,

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  1. European Real Estate Debt ERES 2010 24th June 2010 Iryna Pylypchuk, Associate Director, EMEA Research & Consulting, CB Richard Ellis

  2. Investment market turnover in Europe € Million Source: CB Richard Ellis, Property Data, KTI

  3. VIX (Daily Close) and CBRE EU-15 Office Yield 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 VIX Prime Office Yield (%) Sept/Oct 08 Lehmans & Banking Crisis Autumn 98 Russian Bonds Sept 01 9/11 Aug 02 Enron Mid 07 Sub-Prime Oct 97 Asian Debt 2000/1 Dot Coms The “Perfect Calm” Source: CBOE VIX (21st May 2010), CB Richard Ellis

  4. Lending drives values … drives lending … drives values! New lending/refinancing, € billion Capital Values (Index, 2001 = 100) Year of loan origination Source: CB Richard Ellis, De Montfort University

  5. Bank Lending to UK Real Estate Only includes banks required to report to the Bank of England £ million Source: Bank of England

  6. European CRE debt maturity profile €970 billion of debt maturing in the next 10 years Almost half in the next three years alone € million Source: CB Richard Ellis, De Montfort University

  7. European Commercial Real Estate Debt Total Size: €970 billion Source: CB Richard Ellis

  8. Outstanding European Commercial Real Estate Debt By Year of Issuance € Billion Year of Loan Issuance Source: CB Richard Ellis, De Montfort Study

  9. Outstanding European Commercial Real Estate Debt Total Size: €970 billion Source: CB Richard Ellis

  10. Segmentation of European Commercial Real Estate Debt € Million Source: CB Richard Ellis

  11. European CRE debt maturity profile €970 billion of debt maturing in the next 10 years Almost half in the next three years alone € million Source: CB Richard Ellis, De Montfort University

  12. Debt Market Outlook: Lengthy Workout • Large backlog of un-refinanced debt • Over €200 bn of the most troubling category • High initial LTV, Poor quality property • Support mechanisms will prevent a flood of distressed property, but… • Unwinding of bank positions will result in a steady flow of secondary property on to the market

  13. Question 6 – “Which of the following poses the greatest threat to the emerging European property market recovery?” Percent (n = 271) Source: CB Richard Ellis

  14. European Real Estate Debt ERES 2010 24th June 2010 Iryna Pylypchuk, Associate Director, EMEA Research & Consulting, CB Richard Ellis

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