The total amount of outstanding commercial real estate debt in Europe is believed to be in the region of EUR 1.3 tln, according to Ahsan Ellahi, head of European Structured Finance at Germany's leading property financier Eurohypo.
The total amount of outstanding commercial real estate debt in Europe is believed to be in the region of EUR 1.3 tln, according to Ahsan Ellahi, head of European Structured Finance at Germany's leading property financier Eurohypo.
Ellahi said this was an estimate as there were no official figures on the level of total outstanding debt. But he said bank lending to property doubled during the recent real estate boom. In the 2000-2001period, European banks issued some EUR 100 bn of real estate loans annually. This rose to EUR 200 bn in the boom years of 2006-7. Ellahi said the 2006-7 vintage included many 'very hot loans' due to weak origination standards among some lenders.
Ellahi said all banks in Europe are involved, but that UK, Irish and German banks were the most exposed. He warned that the continent would face major refinancing issues in 2011-12. Ellahi made the comments during a panel discussion on finance organised by AXA REIM at the Mipinm international property fair in Cannes last week.
