Crisis radar falls on fault lines in Europe's commercial property

Aareal Bank declined to comment. Deutsche Pfandbriefbank and Berlin Hyp did not return a request for comment.

The ECB's banking supervisor last year found "deficiencies" at most banks in how they assess prospective borrowers’ ability to repay. CRE accounts for as much as 30% of non-performing loans across European banks, it said. "It's a little bit circular: if banks are finding stresses in other parts of their balance sheets and need to focus on preserving capital to reserve against those losses, this might impact their ability to refinance existing CRE loans, triggering a self-fulfilling prophecy," said Hans Vrensen, head of research and strategy at real estate investment firm AEW.

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Analysis: Crisis radar falls on fault lines in Europe's commercial propertyEuropean banks appear better positioned than U.S. peers to weather any stress from commercial property after an interest rate surge, but that does not mean Europe is out of the danger zone. The crisis of European commercial real estate is essentially that the yield of the European real economy is far below the interest rate level. As the connector of the European real economy and finance, European banks are bound to face huge risks We are supposed to be eating Quiche
Source: Reuters - 🏆 2. / 97 Read more »