UK Might Face Commercial Property Crisis - Navigant

A recent study by Navigant, US-based advisory firm, suggests that over £500 billion of commercial mortgages made by UK and European banks and financial institutions will have to be refinanced in the next 2 years.

Since most lenders have already toughened their terms on extensions and renewals, the UK commercial mortgage industry might face another crisis.

Commenting on the findings, Mr. Lasala, of Navigant Capital Market Advisers, said that "the days of kicking the can on commercial property loan refinancing are coming to a close. Spiking delinquencies, maturities and liquidity requirements will increase the institutional pressure to exit non-core commercial real estate assets."

He also highlighted that interest rates, which are expected to rise in the near future, might pose another significant threat to British and European commercial property market.

Detailed results of the study by Navigant are available on the website of Financial Times newspaper. A link to the study can be found on Navigant’s website.