Some European markets, in particular Germany, France and the Netherlands, are beginning to see lending terms on commercial property become more competitive, whilst average key lending terms have remained relatively unchanged since Q1 2010 across most major European markets according to CBRE.

Natale Giostra, head of UK & EMEA Debt Advisory at CBRE Real Estate Finance, said: “Whilst the majority of lenders continue to concentrate on their existing portfolio, many banks are now actively looking to issue new debt, albeit very selectively and at a capped level.

However, it is proving difficult to source the right opportunity due to the current shortage of quality product and an investment market that is no longer reliant on debt. As a result, we are starting to see banks in certain markets offer more competitive lending terms.”

Despite the increased lender confidence and the positive signs associated with this, regional differences are being exposed due to the impact of the sovereign debt crisis, with Spain and Italy experiencing a negative change in sentiment due to their higher budget deficits and weaker fundamentals, whilst the northern belt of Europe, including France, Germany, the Netherlands and the UK, have remained largely unaffected by this factor.
Giostra said: “As economic fundamentals strengthen and a shortage of good quality space persists in some markets, we expect lending terms to continue to improve in 2010, primarily in the UK, Germany and France.”