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Logistic
And although logistics is typically the first to benefit from a downturn in bricks-and-mortar retail, financing for offices, retail, logistics and residential properties is also down by 9.8 points to a current aggregate of -2.6 points.
German lenders are becoming increasingly pessimistic about the German market, as the German Real Estate Finance Index (DIFI), compiled by JLL and the Centre for European Economic Research (ZEW), falls to its lowest level in two years.
The DIFI now stands at -10.8 points, down from -4.5 points in the previous quarter, reflecting a wane in the German economy, according to JLL. Nonetheless, there is still a buffer of six to nine points between today’s level and the subdued low between 2011 and 2012.
Pessimism is also being driven by a downturn in the retail sector, with 51.5% of the 35 respondents saying that financing for retail properties has become more muted in the past six months. Moreover, 57.6% of respondents expect the situation to worsen over the next six months, which is reflected by retail’s record low of -54.6 points.
And although logistics is typically the first to benefit from a downturn in bricks-and-mortar retail, financing for offices, retail, logistics and residential properties is also down by 9.8 points to a current aggregate of -2.6 points.
Refinancing conditions are also expected to worsen, compared to the previous quarter, Pfandbrief bonds are down by 3.7 points, compared to bonds (-14.5 points) and real estate shares (-19.3 points). Mortgage backed securities remain unchanged at an aggregate of zero. No change is expected regarding spreads for Pfandbrief bonds and unsecured bank bonds over the next 12 months.
The survey participants expect the three-month Euribor to be in the negative range at the end of 2019, and to remain there at the end of 2020. This comes as something of a surprise, given that the ECB has said it intends to keep base rates stable until at least mid-2019.
