Commercial Finance Specialists

Commercial development financing across Europe is expected to remain a major concern for 2010, according to a new report.

Commercial investors are expected to find securing property development finance in 2010 a continuing challenge, according to a new report.

The Capital Markets 2010 - Uneven Terrain report from Jones Lang LaSalle indicates that recovery will be uneven across Europe and investors will find it difficult to find sources of finance.

Slow recovery in demand and supply constraints are expected to contribute to limited rental growth through to 2011, although prime retail space is still expected to be in demand in major cities such as London, Hamburg and Munich, where rental growth is expected.

This is where the largest proportion of commercial finance is set to be focused, according to director of European capital markets at the property firm Chris Staveley.

He said: "Despite the fact that occupier markets have remained weak and will stay that way this year, we will see a growing wall of equity selectively targeting the real estate sector.

"The main focus of this capital will remain on well-let, prime assets and due to a lack of suitable opportunities, this has the potential to exert downward pressure on prime yields as it has done in the UK in the second half of 2009."

In the UK in particular, commercial property lending is expected to improve in 2011 as lenders begin to release more funds for commercial developments.