CBRE Survey: lending activity in Europe to increase in 2025

Lending activity across Europe is expected to increase in 2025, according to the latest Lender Intentions Survey from CBRE. Nearly 80% of lenders plan to increase origination efforts this year and have relaxed their terms, especially margins, which is expected to boost market liquidity and revive transaction activity.

Despite geopolitical uncertainty, lender sentiment is considerably stronger than last year, CBRE says, and 40% of respondents noted an improvement in sentiment across various sectors compared to 2024. Refinancing is identified as the primary driver of demand, as 2025 is an important year for loan maturities. 

Lenders are open to financing alternative sectors, particularly within Living, including senior housing, co-living and subsidised housing. Multifamily is the top choice this year, with 48% of respondents declaring an interest. Industrial has dropped to second place, while hotels have risen to third place. The survey also shows a growing interest in emerging sectors like self-storage.

Nearly 70% of lenders said the main challenge for the market in Europe this year is the uncertain geopolitical landscape, a sharp increase from 37% in 2024.

Loan-to-Value ratios remained largely stable year-on-year,  but margins have compressed across all sectors. Non-bank lenders, including insurance companies, debt funds and investment banks expect stronger origination growth compared to banks and senior lenders, and they offer slightly higher margins but typically offset this with more flexibility, CBRE notes.

Many lenders expect to maintain similar underwriting criteria to last year, but some lenders are prepared to adopt more aggressive criteria in 2025. Most lenders seek to hedge a higher proportion of their loans primarily through Caps and Swaps.

Sustainability has become key: over 70% of lenders will not lend against assets that do not meet ESG criteria or that do not have a business plan to improve them, and nearly one-third would offer margin step-downs for sustainable assets.