Bloomberg News

Commercial Property Debt Funding Gap Widens in Europe, DTZ Says

November 08, 2011

Nov. 8 (Bloomberg) -- Europe’s commercial property debt funding gap increased to $122 billion amid the outlook for asset values to decline in the next three years, according to real- estate broker DTZ Holdings Plc.

The shortfall between existing property loans due to expire through 2014 and the amount of debt available rose from $117 billion in May, Nigel Almond, a London-based analyst at DTZ, wrote in a report. The gap shrank 27 percent to $142 billion worldwide, he wrote.

In Europe, “the debt funding gap remains elevated and has shown little improvement on six months ago,” Almond wrote. The increase is mainly because of the region’s “wider sovereign debt issues and pressure on banks’ balance sheets,” he said.

The U.K. has the largest funding gap with $44 billion, followed by Spain with $29 billion, according to DTZ. Borrowers still have an estimated $156 billion of equity available to bridge the debt gap in Europe, Almond wrote.

In the Asia-Pacific region, the funding shortfall declined to $21 billion from $79 billion in May, while in North America there is no gap, according to DTZ.

--Editors: Andrew Reierson, Cecile Gutscher

To contact the reporter on this story: Esteban Duarte in Madrid at eduarterubia@bloomberg.net

To contact the editor responsible for this story: Paul Armstrong at Parmstrong10@bloomberg.net


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