Leading RE Experts Warn About The Lack Of Credit

21 October 2016 – Expansión

The difficulties involved in accessing bank financing for certain real estate projects are weighing down on the development of the sector. Experts from leading companies in the market, such as BNP Paribas and Axa, have criticised the banks’ excessive zeal when it comes to lending in a discussion about opportunities in Spain at the Barcelona Meeting Point (BMP) real estate fair.

An Economist from the Real Estate division at BNP Paribas, Ramiro J. Rodríguez, said that financial institutions are continuing with standards that they imposed during the economic crisis. “The limitations are so high that business opportunities are being missed”, said the expert.

His market diagnosis was shared by the Director of Acquisitions and Development at Axa, Esther Escapa-Castro, who said that “the banks are not prepared and for that reason they are missing out on major operations”. On the other hand, the expert warned that the economic recovery has not happened at the same speed as the upturn in the (real estate) market, and so she warned of future problems in terms of profitability.

The CEO of Neinor Homes, Juan Velayos, was more forceful in his statement. “The banks are still very exposed to the real estate sector and they remain cautious, but they must start opening up the financing tap because, at the end of the day, that is bread and butter of their business”, he said.

The discussion between the experts revealed that Spain is still an attractive market for investment for the sector, although the number of opportunities has decreased. “Over the last year, it has become more difficult to find attractive operations, whilst deals in other countries have become more interesting, such as in Italy for example”, said the Director of Benson Elliot Capital Management, Gregg Gilbert. The Director explained that, in the case of his company, it sees its future primarily in the hotel market, in key locations such as Barcelona, Madrid and the Balearic Islands.

Meanwhile, the Partner Director of Valid Real Estate Strategies, Christopher Hütwwohl, said that the Spanish market is still competitive compared with other European countries. “We are concerned about the political situation, but we trust that it will be resolved quickly”, said the executive.

Original story: Expansión (by Gabriel Trindade)

Translation: Carmel Drake

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