European commercial real estate: how far will prices fall?
Alarm bells have increasingly been sounded over the past few months about the health of the commercial real estate sector squeezed, as it is, between persistently high inflation, which is impacting property valuations, and higher interest rates which, in turn, are triggering an increase in the refinancing costs faced by real estate investment companies. On top of this, the weakening economic outlook is weighing down on rental growth and simultaneously increasing property vacancy rates.
The credit analysts at Natixis Corporate & Investment Banking (Natixis CIB) have assessed the extent of the decline in commercial property prices and the impact this will have on real estate companies, banks, insurers, and the mortgage market in general.