All-equity players better placed to face new finance paradigm

Now that bank financing is much harder to obtain and more expensive and banks have become more restrictive it is much better to be an all-equity player, according to WP Carey head of European investments, managing director Christopher Mertlitz.

“While I think the long-term fundamentals for the logistics industry as a whole are great and we are firm believers in the mission-critical nature of a lot of these assets — fundamentally that’s what we seek in any investment — the market is going through a period of price discovery as we adjust to this new environment and what is almost a new funding paradigm.

The adjustment will take some time and there will be negative consequences along the way, he warned.

“But as an all-equity investor we have the benefit of a lot of liquidity and dry powder so we hope we can deploy that on an accretive basis in projects during the forthcoming period.”

Please click on the video above to watch the full interview or listen to the podcast below.