#plus the new publishing opportunity as of a week ago
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Have received final proofs for my second journal article to be published this year. 🥳
#hilary for ts#school stuff#i have managed to do pretty well on that front despite yknow#The Horrors#plus the new publishing opportunity as of a week ago#is... good? hopefully???#who even knows but yes
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GAMING RECAP (November 1-7)
Rockstar Set To Release First Trailer For Grand Theft Auto 6 in December
Rockstar Games will release the first trailer for its highly anticipated sequel to 2013's Grand Theft Auto V, which became the most profitable entertainment product of all time in 2018, next month. As of August, Grand Theft Auto V has sold more than 185 million copies since its release 10 years ago.
Official news of this trailer from the Rockstar Twitter account comes less than a day after a Bloomberg report that states Rockstar will reveal the sequel, presumably titled Grand Theft Auto VI or Grand Theft Auto 6, this week with a trailer for it arriving sometime next month; Since the release of this report yesterday, Rockstar has confirmed a trailer for the next Grand Theft Auto will, in fact, be released in December.
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Capcom has a "major unannounced title" to launch before March 2024
According to Capcom's latest financial report, it expects to reach its year-end sales targets by launching a "major unannounced title" before the end of its current financial year, which is March 2024. The report doesn't hint at what the game is, but its biggest franchises are Resident Evil and Monster Hunter, both of which would have the ability to help Capcom reach its target.
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Sony confirms it’s delayed half of its 12 planned live service games
SIE had previously said it planned to have 12 live service titles in the market by its fiscal year ending in March 2026 – up from three during its last business year ended this March.
During an earnings call on Thursday, Sony president, COO and CFO Hiroki Totoki seemingly confirmed that this review had resulted in some games being pushed back due to quality concerns.
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PlayStation Plus Monthly offers Mafia 2 and Aliens Fireteam Elite for November
Subscribers will be able to add Mafia 2: Definitive Edition, Aliens Fireteam Elite, and asymmetrical multiplayer game Dragon Ball: The Breakers to their library at no extra cost from 7th November.
As well as the three monthly games, PS Plus members are getting extra benefits with the Sony Pictures Core app which launched last month. From today until the end of the month, all PS Plus subscibers will receive a 15 percent discount on all purchases or rentals from Sony Pictures Core.
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Warner Bros Promises Even More Live-Service Games
During Warner Bros Games’ 2023 Q3 earnings call, WB Discover CEO David Zaslav explained that the publisher behind games like Batman: Arkham Knight and Suicide Squad will focus on creating more always-online, free-to-play, live-service games.
During November 8’s earnings call, Zaslav opened with a summary of the company’s ongoing projects, finances, and plans across film, TV, and games. Zaslav called WB Games’ library of popular franchises, a real “growth opportunity” and a key asset in its “arsenal.” He also made it clear that single-player games like Arkham City aren’t really on the menu anymore.
“Our focus is on transforming our biggest franchises from largely console and PC based with three-four year release schedules to include more always on gameplay through live services, multiplatform and free-to-play extensions,” explained Zaslav. “The goal [is to] have more players spending more time on more platforms.”
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Blizzard Reveals Next Three Overwatch 2 Heroes
youtube
Blizzard Entertainment has revealed the next three heroes of Overwatch 2, including Mauga, a new duel-wielding tank hero that hits the game next month. Plus, the Overwatch 2 team teased a new DPS hero and Support hero hitting the roster sometime down the line.
Mauga was actually playable for free as a part of a limited-time trial run for the tank hero this past weekend, but he's already out of the game; his real debut happens alongside Overwatch 2's Season 8 launch on December 5. "Equipped with two chain guns (Gunny and Cha-Cha), Mauga is ready to bash through the front lines of his opponents and tear through anyone that stands in his way with tons of fire-power," Blizzard says about the hero.
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New Mass Effect 5 Trailer Teases Original Trilogy, Andromeda
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BioWare, the developer behind EA's Dragon Age and Mass Effect franchises, has released a new trailer for its next Mass Effect game and it teases a connection to the original trilogy and the Andromeda sequel, and maybe even a new protagonist. Since yesterday was November 7, known as N7 Day in the Mass Effect community as a reference to the N7 Systems Alliance military in the series, BioWare launched a countdown on a special Mass Effect "Epsilon" web page.
A decoded message says the following on the site now:
/////ACCESS CODE: EPSILON
/////ACCESS CODE ACCEPTED
/////SECONDARY ENCRYPTION DETECTED
/////VJBSVU-XXXX-XXXXXXXX
/////ANDROMEDA DISTRESS SIGNAL DETECTED
/////YEAR SENT: [REDACTED]
/////AUDIO TRANSCRIPT: ALTHOUGH THEY SHOULD KNOW BY NOW NOT TO UNDERESTIMATE HUMAN [REDACTED]
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The End Of Activision Blizzard's $120 Million Overwatch League is Here
Activision Blizzard has confirmed the end of the Overwatch League, its massive bet to cash in on the rise of esports with an NFL-style franchise system. It will reportedly pay the 20 teams involved $120 million as everyone quietly parts ways from what was reportedly a financial debacle—despite its cultural impact for fans of Overwatch and beyond.
“We are transitioning from the Overwatch League and evolving competitive Overwatch in a new direction,” a spokesperson for Activision Blizzard wrote in a statement. “We are grateful to everyone who made OWL possible and remain focused on building our vision of a revitalized esports program. We are excited to share details with you all in the near future.”
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Embracer COO confirms departure following ‘rough’ year for the games giant
Egil Strunke shared the news on Monday and claimed he’d left the holding company – which owns many game developers such as Gearbox and Crystal Dynamics – last week.
In June, Embracer announced the appointment of an interim COO, which would be filled by Saber Interactive boss Matthew Karch.
“Last week I left Embracer Group as COO, and it’s with mixed feelings I am parting ways this global company phenomenon, rooted in Karlstad, Sweden,” Strunke wrote on Monday.
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Resident Evil 4 Remake Is Coming To Apple Devices In December
The game won't be available to all iPhone owners, however. Resident Evil 4 Remake will only be available on the iPhone 15 Pro and Pro Max, meaning you'll have to grab the newest product in order to play this game on the go. That said, it will also be available on iPads and Macs with the M1 chip or later.
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Ubisoft's latest layoffs set to affect 124 people worldwide
Ubisoft Montreal is the latest company hit by ongoing cuts as 75 members of staff have been laid off at the Canadian studio.
As reported by Kotaku, the staff cuts come as part of a "reorganisation" of the studio's general and administrative teams, Ubisoft IT, and its SFX studio Hybride (which worked on Disney Plus Star Wars series The Mandalorian).
In a notice to the government of Quebec, the company said: "Ubisoft is proceeding with a collective dismissal in its Montreal establishment within the framework of a reorganisation of its production support services across Canada, by consolidating these functions Canada wide, Ubisoft will be able to optimise its resources to be more sustainable in the long term."
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Bungie tells Destiny fans ‘we know we’ve lost your trust’
Bungie has addressed its community for the first time since news earlier this week that it was laying off as many as 100 employees.
Writing on its website, Bungie has called this week “one of the most difficult… in our studio’s history” and acknowledged that it’s “lost a lot of [players’] trust” with its recent Destiny content.
“This has been one of the most difficult weeks in our studio’s history, as we’ve parted ways with people we respect and admire,” it wrote. “We’ve spent this week supporting one another, including those who are at the studio, as well as friends and colleagues who no longer are.
“We want to acknowledge the feedback and concerns you have about Lightfall and recent Seasons, as well as your responses to the reveal of The Final Shape. We know we have lost a lot of your trust. Destiny needs to surprise and delight. We haven’t done this enough and that’s going to change.”
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Nintendo developing live-action The Legend of Zelda movie
Still doubtless beaming from the runaway success of this year's Super Mario Bros. movie, Shigeru Miyamoto has confirmed a live-action The Legend of Zelda movie is in the works.
Details are sparse at present, but Miyamoto, announcing the news on Nintendo Japan's Twitter/X account, said the project has already been in development for "many years now". As per an accompanying press release, Miyamoto will produce the movie - which is being co-financed by Nintendo and Sony Pictures Entertainment (Sony will also handle worldwide theatrical distribution) - with Avi Arad, responsible for "many hit films", also producing.
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Lords Of The Fallen To Get Additional Quest Lines, Two New Events, And More
New Post has been published on https://thedigitalinsider.com/lords-of-the-fallen-to-get-additional-quest-lines-two-new-events-and-more/
Lords Of The Fallen To Get Additional Quest Lines, Two New Events, And More
Lords of the Fallen, the spiritual successor to 2014’s Soulslike with the same name, hit PlayStation 5, Xbox Series X/S, and PC last month – you can read Game Informer’s Lords of the Fallen review here. After a recent patch a few weeks ago that made the game easier and added in some Halloween festivity, developer Hexworks and publisher CI Games have released its schedule of content for the game and it includes new questlines, two new events, more armor and weapons, and more.
The roadmap also includes a “regular weekly cadence of updates focusing on bringing further stability, performance optimization, and balancing improvements to the game, including its online crossplay experience.”
[embedded content]
Stopping short of specifics, Hexworks says before the year’s end, it will add multiple new quest lines to Lords of the Fallen, with the opportunity to unlock some unique armor sets and weapons. The studio says some of this armor and weaponry has been co-created with the community during recent collaborative livestreams. Plus, the studio says “players can look forward to 12 new spells, new finisher attacks, and a whole host of community-requested features, including the recently revealed New Game Plus (NG+) modifier system – a first for the genre, and highly anticipated by the Lords of the Fallen community.”
“At Hexworks, we’re incredibly proud of the open relationship we’re fostering with our community,” studio head Saül Gascon writes in a press release. “We are actively listening to their constructive feedback and working diligently to deliver what we believe, collectively, will elevate Lords of the Fallen further. Every addition to the game is a labor of love, as we strive to push both it and the genre’s boundaries.”
For more, read Game Informer’s Lords of the Fallen review and then listen to us talk about it on The Game Informer Show.
Have you played Lords of the Fallen? Let us know in the comments below!
#armor#collaborative#Community#Developer#Events#Features#game#games#it#listening#optimization#PC#performance#PlayStation#PlayStation 5#Read#review#weapons#X#Xbox#Xbox Series X
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Amidst banking crisis, prices soften and new lenders emerge
Pan-European investors taking comfort from the first signs of recovery in the markets of March were caught out by an icy blast hailing from the west. Massive amounts of customer withdrawals had provoked the crash of Silicon Valley Bank in California, followed swiftly by the failure of its US-peer Signature Bank.
But on closer shores, institutions proved no more secure. Days later, banking group UBS agreed to take over its Zurich-headquartered peer Credit Suisse in a £2.65 billion deal pushed through by Swiss authorities to calm the markets. Although swift action seems to have swerved a collapse that could have triggered a tsunami of banking failures, a leap in Swiss National Bank sight deposits suggests that both Credit Suisse and UBS may have taken large chunks of emergency liquidity to secure the merger, as reported by Reuters. And real estate investors know too well that when banks are saved, there are always accounts to settle at a later date.
Rising financing costs
The latest round of banking tremors has come in the wake of a year of rising swap rates and increasingly expensive financing for players in commercial real estate. A new European lending report published last week reveals that borrowers are now paying up to 6% all-in interest for loans on prime European properties, compared to just 2-3 per cent a year ago. Opportunistic or repositioning assets are priced 60-100 bpd wider.
The Bayes Business School European Commercial Real Estate Lending Report shows that in Europe, German bank lenders still offer some of the highest loan-to-value (LTV) for investment assets (between 75-80 per cent) and loan-to-cost (LTC) for development lending (between 77-82%). Other European bank lenders have been more conservative (between 55-60 per cent LTV and 60-75 per cent LTC).
Loan size also matters. Smaller loans might be priced higher because there is less lender appetite, as well as very large loans (up to €100 million), which might require more than one underwriting lender. The typical sweet spot is between €20 and 50 million, which attracts the lowest and most competitive lending rates (between 1.5-2.5% variable margin rate for a five-year loan term plus Euribor).
Importantly, the loan trend is finally having an impact on prices. "Where property yields for prime offices have been ranging from 2.75% to 3.5% the level of financing rates cannot be sustained and are forcing property values down or leaving assets and borrowers stranded," notes the research, authored by Nicole Lux, senior research fellow at Bayes Business School.
Non-traditional lenders
Amidst this gloomy outlook, there are some bright spots for equity players as values soften, and for hospitality buyers pursuing debt in the alternative space. “Finance is still available to hotel real estate investors,” affirms Patrick Saade, senior managing director of JLL’s EMEA hotels and hospitality division.
“It’s a misconception to think it’s not. In addition to traditional lenders, new lenders have set up shop to fill the gap, from private credit to private equity players.”
The Hotel Maria
Cheyne Capital is one lender which is expanding in the hospitality space. Last month, the alternative asset manager provided a €62 million senior loan to Samla Capital Oy to finance the redevelopment of The Hotel Maria, a luxury hotel located in the heart of Kruununhaka, Helsinki. The project represents Cheyne’s second real estate transaction in Finland.
Daniel Schuldes and Michael Fournier of Cheyne Capital said: “As a firm, we continue to see attractive lending opportunities in the luxury hotel sector as consumers seek out enhanced lifestyle experiences. We’re therefore proud to support Samla Capital Oy with the financing of this prestigious project and look forward to the delivery of a world-class hotel in Finland.”
Added Samppa Lajunen, founder and portfolio manager of Samla Capital Oy: “Luxury tourism is a growing market and the demand for hotels that meet this need is also emerging across Finland. We are pleased to be partnering with Cheyne Capital, who understands the value of The Hotel Maria's concept and the luxury hotel sector.”
The finished hotel will consist of 117 rooms, two restaurants, two bars, a spa, a gym, a ballroom, and a small chapel, and is expected to launch in December 2023.
Green loan options
Other hospitality firms are finding success in the green loan space. Recently, citizenM secured a dual currency €243.3 million and £201.7 million sustainability linked loan (SLL) facilitated by HSBC UK and HSBC Continental Europe, ABN AMRO Bank and Aareal Bank.
By refinancing existing debt as a SLL, citizenM has tied its funding to specific environmental, social and governance (ESG) targets, which include reducing operating CO2 emissions and improving existing green building certifications across its European owned hotel assets. CitizenM, which operates 31 hotels across nine countries and 18 cities, said it was one of the first European hospitality businesses to adopt the SLL funding structure.
CitizenM at London Victoria Station
Fred Bos, head commercial clients sector, sustainability and E&E expertise at ABN Amro, sees the ”cooperation as a positive step towards the prevention of climate change and as an opportunity to grow our loan book in a responsible way”. He adds: “We look forward to scaling what we have achieved with this financing structure more widely across the highly attractive hotel industry.”
For Saade, too, fears over retreating bank financing may currently be overstated. “Financing is more expensive today if we look at swap rates linked to Euribor. Yet the right asset and the right sponsor are still going to get quite aggressive financing from the banks,” he notes.
“The right asset but an unknown sponsor can still obtain financing if they can supply a guarantee. For anything that is more exotic and more complicated, the gap is being filled by the credit funds and private equity. Specialist credit funds are excited as they know there is a gap to fill - we have been very active matching lenders to investors in that space.”
In conclusion, he notes: “Whoever has a refinancing event approaching will be hoping that their cash flow has caught up as they still might have to put equity down.
“But we are not seeing a huge wave of distress on the horizon, although some high-levered owners will have to sell at some point.”
0 notes
Text
Amidst banking crisis, prices soften and new lenders emerge
Pan-European investors taking comfort from the first signs of recovery in the markets of March were caught out by an icy blast hailing from the west. Massive amounts of customer withdrawals had provoked the crash of Silicon Valley Bank in California, followed swiftly by the failure of its US-peer Signature Bank.
But on closer shores, institutions proved no more secure. Days later, banking group UBS agreed to take over its Zurich-headquartered peer Credit Suisse in a £2.65 billion deal pushed through by Swiss authorities to calm the markets. Although swift action seems to have swerved a collapse that could have triggered a tsunami of banking failures, a leap in Swiss National Bank sight deposits suggests that both Credit Suisse and UBS may have taken large chunks of emergency liquidity to secure the merger, as reported by Reuters. And real estate investors know too well that when banks are saved, there are always accounts to settle at a later date.
Rising financing costs
The latest round of banking tremors has come in the wake of a year of rising swap rates and increasingly expensive financing for players in commercial real estate. A new European lending report published last week reveals that borrowers are now paying up to 6% all-in interest for loans on prime European properties, compared to just 2-3 per cent a year ago. Opportunistic or repositioning assets are priced 60-100 bpd wider.
The Bayes Business School European Commercial Real Estate Lending Report shows that in Europe, German bank lenders still offer some of the highest loan-to-value (LTV) for investment assets (between 75-80 per cent) and loan-to-cost (LTC) for development lending (between 77-82%). Other European bank lenders have been more conservative (between 55-60 per cent LTV and 60-75 per cent LTC).
Loan size also matters. Smaller loans might be priced higher because there is less lender appetite, as well as very large loans (up to €100 million), which might require more than one underwriting lender. The typical sweet spot is between €20 and 50 million, which attracts the lowest and most competitive lending rates (between 1.5-2.5% variable margin rate for a five-year loan term plus Euribor).
Importantly, the loan trend is finally having an impact on prices. "Where property yields for prime offices have been ranging from 2.75% to 3.5% the level of financing rates cannot be sustained and are forcing property values down or leaving assets and borrowers stranded," notes the research, authored by Nicole Lux, senior research fellow at Bayes Business School.
Non-traditional lenders
Amidst this gloomy outlook, there are some bright spots for equity players as values soften, and for hospitality buyers pursuing debt in the alternative space. “Finance is still available to hotel real estate investors,” affirms Patrick Saade, senior managing director of JLL’s EMEA hotels and hospitality division.
“It’s a misconception to think it’s not. In addition to traditional lenders, new lenders have set up shop to fill the gap, from private credit to private equity players.”
The Hotel Maria
Cheyne Capital is one lender which is expanding in the hospitality space. Last month, the alternative asset manager provided a €62 million senior loan to Samla Capital Oy to finance the redevelopment of The Hotel Maria, a luxury hotel located in the heart of Kruununhaka, Helsinki. The project represents Cheyne’s second real estate transaction in Finland.
Daniel Schuldes and Michael Fournier of Cheyne Capital said: “As a firm, we continue to see attractive lending opportunities in the luxury hotel sector as consumers seek out enhanced lifestyle experiences. We’re therefore proud to support Samla Capital Oy with the financing of this prestigious project and look forward to the delivery of a world-class hotel in Finland.”
Added Samppa Lajunen, founder and portfolio manager of Samla Capital Oy: “Luxury tourism is a growing market and the demand for hotels that meet this need is also emerging across Finland. We are pleased to be partnering with Cheyne Capital, who understands the value of The Hotel Maria's concept and the luxury hotel sector.”
The finished hotel will consist of 117 rooms, two restaurants, two bars, a spa, a gym, a ballroom, and a small chapel, and is expected to launch in December 2023.
Green loan options
Other hospitality firms are finding success in the green loan space. Recently, citizenM secured a dual currency €243.3 million and £201.7 million sustainability linked loan (SLL) facilitated by HSBC UK and HSBC Continental Europe, ABN AMRO Bank and Aareal Bank.
By refinancing existing debt as a SLL, citizenM has tied its funding to specific environmental, social and governance (ESG) targets, which include reducing operating CO2 emissions and improving existing green building certifications across its European owned hotel assets. CitizenM, which operates 31 hotels across nine countries and 18 cities, said it was one of the first European hospitality businesses to adopt the SLL funding structure.
CitizenM at London Victoria Station
Fred Bos, head commercial clients sector, sustainability and E&E expertise at ABN Amro, sees the ”cooperation as a positive step towards the prevention of climate change and as an opportunity to grow our loan book in a responsible way”. He adds: “We look forward to scaling what we have achieved with this financing structure more widely across the highly attractive hotel industry.”
For Saade, too, fears over retreating bank financing may currently be overstated. “Financing is more expensive today if we look at swap rates linked to Euribor. Yet the right asset and the right sponsor are still going to get quite aggressive financing from the banks,” he notes.
“The right asset but an unknown sponsor can still obtain financing if they can supply a guarantee. For anything that is more exotic and more complicated, the gap is being filled by the credit funds and private equity. Specialist credit funds are excited as they know there is a gap to fill - we have been very active matching lenders to investors in that space.”
In conclusion, he notes: “Whoever has a refinancing event approaching will be hoping that their cash flow has caught up as they still might have to put equity down.
“But we are not seeing a huge wave of distress on the horizon, although some high-levered owners will have to sell at some point.”
0 notes
Text
Amidst banking crisis, prices soften and new lenders emerge
Pan-European investors taking comfort from the first signs of recovery in the markets of March were caught out by an icy blast hailing from the west. Massive amounts of customer withdrawals had provoked the crash of Silicon Valley Bank in California, followed swiftly by the failure of its US-peer Signature Bank.
But on closer shores, institutions proved no more secure. Days later, banking group UBS agreed to take over its Zurich-headquartered peer Credit Suisse in a £2.65 billion deal pushed through by Swiss authorities to calm the markets. Although swift action seems to have swerved a collapse that could have triggered a tsunami of banking failures, a leap in Swiss National Bank sight deposits suggests that both Credit Suisse and UBS may have taken large chunks of emergency liquidity to secure the merger, as reported by Reuters. And real estate investors know too well that when banks are saved, there are always accounts to settle at a later date.
Rising financing costs
The latest round of banking tremors has come in the wake of a year of rising swap rates and increasingly expensive financing for players in commercial real estate. A new European lending report published last week reveals that borrowers are now paying up to 6% all-in interest for loans on prime European properties, compared to just 2-3 per cent a year ago. Opportunistic or repositioning assets are priced 60-100 bpd wider.
The Bayes Business School European Commercial Real Estate Lending Report shows that in Europe, German bank lenders still offer some of the highest loan-to-value (LTV) for investment assets (between 75-80 per cent) and loan-to-cost (LTC) for development lending (between 77-82%). Other European bank lenders have been more conservative (between 55-60 per cent LTV and 60-75 per cent LTC).
Loan size also matters. Smaller loans might be priced higher because there is less lender appetite, as well as very large loans (up to €100 million), which might require more than one underwriting lender. The typical sweet spot is between €20 and 50 million, which attracts the lowest and most competitive lending rates (between 1.5-2.5% variable margin rate for a five-year loan term plus Euribor).
Importantly, the loan trend is finally having an impact on prices. "Where property yields for prime offices have been ranging from 2.75% to 3.5% the level of financing rates cannot be sustained and are forcing property values down or leaving assets and borrowers stranded," notes the research, authored by Nicole Lux, senior research fellow at Bayes Business School.
Non-traditional lenders
Amidst this gloomy outlook, there are some bright spots for equity players as values soften, and for hospitality buyers pursuing debt in the alternative space. “Finance is still available to hotel real estate investors,” affirms Patrick Saade, senior managing director of JLL’s EMEA hotels and hospitality division.
“It’s a misconception to think it’s not. In addition to traditional lenders, new lenders have set up shop to fill the gap, from private credit to private equity players.”
The Hotel Maria
Cheyne Capital is one lender which is expanding in the hospitality space. Last month, the alternative asset manager provided a €62 million senior loan to Samla Capital Oy to finance the redevelopment of The Hotel Maria, a luxury hotel located in the heart of Kruununhaka, Helsinki. The project represents Cheyne’s second real estate transaction in Finland.
Daniel Schuldes and Michael Fournier of Cheyne Capital said: “As a firm, we continue to see attractive lending opportunities in the luxury hotel sector as consumers seek out enhanced lifestyle experiences. We’re therefore proud to support Samla Capital Oy with the financing of this prestigious project and look forward to the delivery of a world-class hotel in Finland.”
Added Samppa Lajunen, founder and portfolio manager of Samla Capital Oy: “Luxury tourism is a growing market and the demand for hotels that meet this need is also emerging across Finland. We are pleased to be partnering with Cheyne Capital, who understands the value of The Hotel Maria's concept and the luxury hotel sector.”
The finished hotel will consist of 117 rooms, two restaurants, two bars, a spa, a gym, a ballroom, and a small chapel, and is expected to launch in December 2023.
Green loan options
Other hospitality firms are finding success in the green loan space. Recently, citizenM secured a dual currency €243.3 million and £201.7 million sustainability linked loan (SLL) facilitated by HSBC UK and HSBC Continental Europe, ABN AMRO Bank and Aareal Bank.
By refinancing existing debt as a SLL, citizenM has tied its funding to specific environmental, social and governance (ESG) targets, which include reducing operating CO2 emissions and improving existing green building certifications across its European owned hotel assets. CitizenM, which operates 31 hotels across nine countries and 18 cities, said it was one of the first European hospitality businesses to adopt the SLL funding structure.
CitizenM at London Victoria Station
Fred Bos, head commercial clients sector, sustainability and E&E expertise at ABN Amro, sees the ”cooperation as a positive step towards the prevention of climate change and as an opportunity to grow our loan book in a responsible way”. He adds: “We look forward to scaling what we have achieved with this financing structure more widely across the highly attractive hotel industry.”
For Saade, too, fears over retreating bank financing may currently be overstated. “Financing is more expensive today if we look at swap rates linked to Euribor. Yet the right asset and the right sponsor are still going to get quite aggressive financing from the banks,” he notes.
“The right asset but an unknown sponsor can still obtain financing if they can supply a guarantee. For anything that is more exotic and more complicated, the gap is being filled by the credit funds and private equity. Specialist credit funds are excited as they know there is a gap to fill - we have been very active matching lenders to investors in that space.”
In conclusion, he notes: “Whoever has a refinancing event approaching will be hoping that their cash flow has caught up as they still might have to put equity down.
“But we are not seeing a huge wave of distress on the horizon, although some high-levered owners will have to sell at some point.”
0 notes
Text
Amidst banking crisis, prices soften and new lenders emerge
Pan-European investors taking comfort from the first signs of recovery in the markets of March were caught out by an icy blast hailing from the west. Massive amounts of customer withdrawals had provoked the crash of Silicon Valley Bank in California, followed swiftly by the failure of its US-peer Signature Bank.
But on closer shores, institutions proved no more secure. Days later, banking group UBS agreed to take over its Zurich-headquartered peer Credit Suisse in a £2.65 billion deal pushed through by Swiss authorities to calm the markets. Although swift action seems to have swerved a collapse that could have triggered a tsunami of banking failures, a leap in Swiss National Bank sight deposits suggests that both Credit Suisse and UBS may have taken large chunks of emergency liquidity to secure the merger, as reported by Reuters. And real estate investors know too well that when banks are saved, there are always accounts to settle at a later date.
Rising financing costs
The latest round of banking tremors has come in the wake of a year of rising swap rates and increasingly expensive financing for players in commercial real estate. A new European lending report published last week reveals that borrowers are now paying up to 6% all-in interest for loans on prime European properties, compared to just 2-3 per cent a year ago. Opportunistic or repositioning assets are priced 60-100 bpd wider.
The Bayes Business School European Commercial Real Estate Lending Report shows that in Europe, German bank lenders still offer some of the highest loan-to-value (LTV) for investment assets (between 75-80 per cent) and loan-to-cost (LTC) for development lending (between 77-82%). Other European bank lenders have been more conservative (between 55-60 per cent LTV and 60-75 per cent LTC).
Loan size also matters. Smaller loans might be priced higher because there is less lender appetite, as well as very large loans (up to €100 million), which might require more than one underwriting lender. The typical sweet spot is between €20 and 50 million, which attracts the lowest and most competitive lending rates (between 1.5-2.5% variable margin rate for a five-year loan term plus Euribor).
Importantly, the loan trend is finally having an impact on prices. "Where property yields for prime offices have been ranging from 2.75% to 3.5% the level of financing rates cannot be sustained and are forcing property values down or leaving assets and borrowers stranded," notes the research, authored by Nicole Lux, senior research fellow at Bayes Business School.
Non-traditional lenders
Amidst this gloomy outlook, there are some bright spots for equity players as values soften, and for hospitality buyers pursuing debt in the alternative space. “Finance is still available to hotel real estate investors,” affirms Patrick Saade, senior managing director of JLL’s EMEA hotels and hospitality division.
“It’s a misconception to think it’s not. In addition to traditional lenders, new lenders have set up shop to fill the gap, from private credit to private equity players.”
The Hotel Maria
Cheyne Capital is one lender which is expanding in the hospitality space. Last month, the alternative asset manager provided a €62 million senior loan to Samla Capital Oy to finance the redevelopment of The Hotel Maria, a luxury hotel located in the heart of Kruununhaka, Helsinki. The project represents Cheyne’s second real estate transaction in Finland.
Daniel Schuldes and Michael Fournier of Cheyne Capital said: “As a firm, we continue to see attractive lending opportunities in the luxury hotel sector as consumers seek out enhanced lifestyle experiences. We’re therefore proud to support Samla Capital Oy with the financing of this prestigious project and look forward to the delivery of a world-class hotel in Finland.”
Added Samppa Lajunen, founder and portfolio manager of Samla Capital Oy: “Luxury tourism is a growing market and the demand for hotels that meet this need is also emerging across Finland. We are pleased to be partnering with Cheyne Capital, who understands the value of The Hotel Maria's concept and the luxury hotel sector.”
The finished hotel will consist of 117 rooms, two restaurants, two bars, a spa, a gym, a ballroom, and a small chapel, and is expected to launch in December 2023.
Green loan options
Other hospitality firms are finding success in the green loan space. Recently, citizenM secured a dual currency €243.3 million and £201.7 million sustainability linked loan (SLL) facilitated by HSBC UK and HSBC Continental Europe, ABN AMRO Bank and Aareal Bank.
By refinancing existing debt as a SLL, citizenM has tied its funding to specific environmental, social and governance (ESG) targets, which include reducing operating CO2 emissions and improving existing green building certifications across its European owned hotel assets. CitizenM, which operates 31 hotels across nine countries and 18 cities, said it was one of the first European hospitality businesses to adopt the SLL funding structure.
CitizenM at London Victoria Station
Fred Bos, head commercial clients sector, sustainability and E&E expertise at ABN Amro, sees the ”cooperation as a positive step towards the prevention of climate change and as an opportunity to grow our loan book in a responsible way”. He adds: “We look forward to scaling what we have achieved with this financing structure more widely across the highly attractive hotel industry.”
For Saade, too, fears over retreating bank financing may currently be overstated. “Financing is more expensive today if we look at swap rates linked to Euribor. Yet the right asset and the right sponsor are still going to get quite aggressive financing from the banks,” he notes.
“The right asset but an unknown sponsor can still obtain financing if they can supply a guarantee. For anything that is more exotic and more complicated, the gap is being filled by the credit funds and private equity. Specialist credit funds are excited as they know there is a gap to fill - we have been very active matching lenders to investors in that space.”
In conclusion, he notes: “Whoever has a refinancing event approaching will be hoping that their cash flow has caught up as they still might have to put equity down.
“But we are not seeing a huge wave of distress on the horizon, although some high-levered owners will have to sell at some point.”
0 notes
Text
Amidst banking crisis, prices soften and new lenders emerge
Pan-European investors taking comfort from the first signs of recovery in the markets of March were caught out by an icy blast hailing from the west. Massive amounts of customer withdrawals had provoked the crash of Silicon Valley Bank in California, followed swiftly by the failure of its US-peer Signature Bank.
But on closer shores, institutions proved no more secure. Days later, banking group UBS agreed to take over its Zurich-headquartered peer Credit Suisse in a £2.65 billion deal pushed through by Swiss authorities to calm the markets. Although swift action seems to have swerved a collapse that could have triggered a tsunami of banking failures, a leap in Swiss National Bank sight deposits suggests that both Credit Suisse and UBS may have taken large chunks of emergency liquidity to secure the merger, as reported by Reuters. And real estate investors know too well that when banks are saved, there are always accounts to settle at a later date.
Rising financing costs
The latest round of banking tremors has come in the wake of a year of rising swap rates and increasingly expensive financing for players in commercial real estate. A new European lending report published last week reveals that borrowers are now paying up to 6% all-in interest for loans on prime European properties, compared to just 2-3 per cent a year ago. Opportunistic or repositioning assets are priced 60-100 bpd wider.
The Bayes Business School European Commercial Real Estate Lending Report shows that in Europe, German bank lenders still offer some of the highest loan-to-value (LTV) for investment assets (between 75-80 per cent) and loan-to-cost (LTC) for development lending (between 77-82%). Other European bank lenders have been more conservative (between 55-60 per cent LTV and 60-75 per cent LTC).
Loan size also matters. Smaller loans might be priced higher because there is less lender appetite, as well as very large loans (up to €100 million), which might require more than one underwriting lender. The typical sweet spot is between €20 and 50 million, which attracts the lowest and most competitive lending rates (between 1.5-2.5% variable margin rate for a five-year loan term plus Euribor).
Importantly, the loan trend is finally having an impact on prices. "Where property yields for prime offices have been ranging from 2.75% to 3.5% the level of financing rates cannot be sustained and are forcing property values down or leaving assets and borrowers stranded," notes the research, authored by Nicole Lux, senior research fellow at Bayes Business School.
Non-traditional lenders
Amidst this gloomy outlook, there are some bright spots for equity players as values soften, and for hospitality buyers pursuing debt in the alternative space. “Finance is still available to hotel real estate investors,” affirms Patrick Saade, senior managing director of JLL’s EMEA hotels and hospitality division.
“It’s a misconception to think it’s not. In addition to traditional lenders, new lenders have set up shop to fill the gap, from private credit to private equity players.”
The Hotel Maria
Cheyne Capital is one lender which is expanding in the hospitality space. Last month, the alternative asset manager provided a €62 million senior loan to Samla Capital Oy to finance the redevelopment of The Hotel Maria, a luxury hotel located in the heart of Kruununhaka, Helsinki. The project represents Cheyne’s second real estate transaction in Finland.
Daniel Schuldes and Michael Fournier of Cheyne Capital said: “As a firm, we continue to see attractive lending opportunities in the luxury hotel sector as consumers seek out enhanced lifestyle experiences. We’re therefore proud to support Samla Capital Oy with the financing of this prestigious project and look forward to the delivery of a world-class hotel in Finland.”
Added Samppa Lajunen, founder and portfolio manager of Samla Capital Oy: “Luxury tourism is a growing market and the demand for hotels that meet this need is also emerging across Finland. We are pleased to be partnering with Cheyne Capital, who understands the value of The Hotel Maria's concept and the luxury hotel sector.”
The finished hotel will consist of 117 rooms, two restaurants, two bars, a spa, a gym, a ballroom, and a small chapel, and is expected to launch in December 2023.
Green loan options
Other hospitality firms are finding success in the green loan space. Recently, citizenM secured a dual currency €243.3 million and £201.7 million sustainability linked loan (SLL) facilitated by HSBC UK and HSBC Continental Europe, ABN AMRO Bank and Aareal Bank.
By refinancing existing debt as a SLL, citizenM has tied its funding to specific environmental, social and governance (ESG) targets, which include reducing operating CO2 emissions and improving existing green building certifications across its European owned hotel assets. CitizenM, which operates 31 hotels across nine countries and 18 cities, said it was one of the first European hospitality businesses to adopt the SLL funding structure.
CitizenM at London Victoria Station
Fred Bos, head commercial clients sector, sustainability and E&E expertise at ABN Amro, sees the ”cooperation as a positive step towards the prevention of climate change and as an opportunity to grow our loan book in a responsible way”. He adds: “We look forward to scaling what we have achieved with this financing structure more widely across the highly attractive hotel industry.”
For Saade, too, fears over retreating bank financing may currently be overstated. “Financing is more expensive today if we look at swap rates linked to Euribor. Yet the right asset and the right sponsor are still going to get quite aggressive financing from the banks,” he notes.
“The right asset but an unknown sponsor can still obtain financing if they can supply a guarantee. For anything that is more exotic and more complicated, the gap is being filled by the credit funds and private equity. Specialist credit funds are excited as they know there is a gap to fill - we have been very active matching lenders to investors in that space.”
In conclusion, he notes: “Whoever has a refinancing event approaching will be hoping that their cash flow has caught up as they still might have to put equity down.
“But we are not seeing a huge wave of distress on the horizon, although some high-levered owners will have to sell at some point.”
0 notes
Text
Amidst banking crisis, prices soften and new lenders emerge
Pan-European investors taking comfort from the first signs of recovery in the markets of March were caught out by an icy blast hailing from the west. Massive amounts of customer withdrawals had provoked the crash of Silicon Valley Bank in California, followed swiftly by the failure of its US-peer Signature Bank.
But on closer shores, institutions proved no more secure. Days later, banking group UBS agreed to take over its Zurich-headquartered peer Credit Suisse in a £2.65 billion deal pushed through by Swiss authorities to calm the markets. Although swift action seems to have swerved a collapse that could have triggered a tsunami of banking failures, a leap in Swiss National Bank sight deposits suggests that both Credit Suisse and UBS may have taken large chunks of emergency liquidity to secure the merger, as reported by Reuters. And real estate investors know too well that when banks are saved, there are always accounts to settle at a later date.
Rising financing costs
The latest round of banking tremors has come in the wake of a year of rising swap rates and increasingly expensive financing for players in commercial real estate. A new European lending report published last week reveals that borrowers are now paying up to 6% all-in interest for loans on prime European properties, compared to just 2-3 per cent a year ago. Opportunistic or repositioning assets are priced 60-100 bpd wider.
The Bayes Business School European Commercial Real Estate Lending Report shows that in Europe, German bank lenders still offer some of the highest loan-to-value (LTV) for investment assets (between 75-80 per cent) and loan-to-cost (LTC) for development lending (between 77-82%). Other European bank lenders have been more conservative (between 55-60 per cent LTV and 60-75 per cent LTC).
Loan size also matters. Smaller loans might be priced higher because there is less lender appetite, as well as very large loans (up to €100 million), which might require more than one underwriting lender. The typical sweet spot is between €20 and 50 million, which attracts the lowest and most competitive lending rates (between 1.5-2.5% variable margin rate for a five-year loan term plus Euribor).
Importantly, the loan trend is finally having an impact on prices. "Where property yields for prime offices have been ranging from 2.75% to 3.5% the level of financing rates cannot be sustained and are forcing property values down or leaving assets and borrowers stranded," notes the research, authored by Nicole Lux, senior research fellow at Bayes Business School.
Non-traditional lenders
Amidst this gloomy outlook, there are some bright spots for equity players as values soften, and for hospitality buyers pursuing debt in the alternative space. “Finance is still available to hotel real estate investors,” affirms Patrick Saade, senior managing director of JLL’s EMEA hotels and hospitality division.
“It’s a misconception to think it’s not. In addition to traditional lenders, new lenders have set up shop to fill the gap, from private credit to private equity players.”
The Hotel Maria
Cheyne Capital is one lender which is expanding in the hospitality space. Last month, the alternative asset manager provided a €62 million senior loan to Samla Capital Oy to finance the redevelopment of The Hotel Maria, a luxury hotel located in the heart of Kruununhaka, Helsinki. The project represents Cheyne’s second real estate transaction in Finland.
Daniel Schuldes and Michael Fournier of Cheyne Capital said: “As a firm, we continue to see attractive lending opportunities in the luxury hotel sector as consumers seek out enhanced lifestyle experiences. We’re therefore proud to support Samla Capital Oy with the financing of this prestigious project and look forward to the delivery of a world-class hotel in Finland.”
Added Samppa Lajunen, founder and portfolio manager of Samla Capital Oy: “Luxury tourism is a growing market and the demand for hotels that meet this need is also emerging across Finland. We are pleased to be partnering with Cheyne Capital, who understands the value of The Hotel Maria's concept and the luxury hotel sector.”
The finished hotel will consist of 117 rooms, two restaurants, two bars, a spa, a gym, a ballroom, and a small chapel, and is expected to launch in December 2023.
Green loan options
Other hospitality firms are finding success in the green loan space. Recently, citizenM secured a dual currency €243.3 million and £201.7 million sustainability linked loan (SLL) facilitated by HSBC UK and HSBC Continental Europe, ABN AMRO Bank and Aareal Bank.
By refinancing existing debt as a SLL, citizenM has tied its funding to specific environmental, social and governance (ESG) targets, which include reducing operating CO2 emissions and improving existing green building certifications across its European owned hotel assets. CitizenM, which operates 31 hotels across nine countries and 18 cities, said it was one of the first European hospitality businesses to adopt the SLL funding structure.
CitizenM at London Victoria Station
Fred Bos, head commercial clients sector, sustainability and E&E expertise at ABN Amro, sees the ”cooperation as a positive step towards the prevention of climate change and as an opportunity to grow our loan book in a responsible way”. He adds: “We look forward to scaling what we have achieved with this financing structure more widely across the highly attractive hotel industry.”
For Saade, too, fears over retreating bank financing may currently be overstated. “Financing is more expensive today if we look at swap rates linked to Euribor. Yet the right asset and the right sponsor are still going to get quite aggressive financing from the banks,” he notes.
“The right asset but an unknown sponsor can still obtain financing if they can supply a guarantee. For anything that is more exotic and more complicated, the gap is being filled by the credit funds and private equity. Specialist credit funds are excited as they know there is a gap to fill - we have been very active matching lenders to investors in that space.”
In conclusion, he notes: “Whoever has a refinancing event approaching will be hoping that their cash flow has caught up as they still might have to put equity down.
“But we are not seeing a huge wave of distress on the horizon, although some high-levered owners will have to sell at some point.”
0 notes
Text
Amidst banking crisis, prices soften and new lenders emerge
Pan-European investors taking comfort from the first signs of recovery in the markets of March were caught out by an icy blast hailing from the west. Massive amounts of customer withdrawals had provoked the crash of Silicon Valley Bank in California, followed swiftly by the failure of its US-peer Signature Bank.
But on closer shores, institutions proved no more secure. Days later, banking group UBS agreed to take over its Zurich-headquartered peer Credit Suisse in a £2.65 billion deal pushed through by Swiss authorities to calm the markets. Although swift action seems to have swerved a collapse that could have triggered a tsunami of banking failures, a leap in Swiss National Bank sight deposits suggests that both Credit Suisse and UBS may have taken large chunks of emergency liquidity to secure the merger, as reported by Reuters. And real estate investors know too well that when banks are saved, there are always accounts to settle at a later date.
Rising financing costs
The latest round of banking tremors has come in the wake of a year of rising swap rates and increasingly expensive financing for players in commercial real estate. A new European lending report published last week reveals that borrowers are now paying up to 6% all-in interest for loans on prime European properties, compared to just 2-3 per cent a year ago. Opportunistic or repositioning assets are priced 60-100 bpd wider.
The Bayes Business School European Commercial Real Estate Lending Report shows that in Europe, German bank lenders still offer some of the highest loan-to-value (LTV) for investment assets (between 75-80 per cent) and loan-to-cost (LTC) for development lending (between 77-82%). Other European bank lenders have been more conservative (between 55-60 per cent LTV and 60-75 per cent LTC).
Loan size also matters. Smaller loans might be priced higher because there is less lender appetite, as well as very large loans (up to €100 million), which might require more than one underwriting lender. The typical sweet spot is between €20 and 50 million, which attracts the lowest and most competitive lending rates (between 1.5-2.5% variable margin rate for a five-year loan term plus Euribor).
Importantly, the loan trend is finally having an impact on prices. "Where property yields for prime offices have been ranging from 2.75% to 3.5% the level of financing rates cannot be sustained and are forcing property values down or leaving assets and borrowers stranded," notes the research, authored by Nicole Lux, senior research fellow at Bayes Business School.
Non-traditional lenders
Amidst this gloomy outlook, there are some bright spots for equity players as values soften, and for hospitality buyers pursuing debt in the alternative space. “Finance is still available to hotel real estate investors,” affirms Patrick Saade, senior managing director of JLL’s EMEA hotels and hospitality division.
“It’s a misconception to think it’s not. In addition to traditional lenders, new lenders have set up shop to fill the gap, from private credit to private equity players.”
The Hotel Maria
Cheyne Capital is one lender which is expanding in the hospitality space. Last month, the alternative asset manager provided a €62 million senior loan to Samla Capital Oy to finance the redevelopment of The Hotel Maria, a luxury hotel located in the heart of Kruununhaka, Helsinki. The project represents Cheyne’s second real estate transaction in Finland.
Daniel Schuldes and Michael Fournier of Cheyne Capital said: “As a firm, we continue to see attractive lending opportunities in the luxury hotel sector as consumers seek out enhanced lifestyle experiences. We’re therefore proud to support Samla Capital Oy with the financing of this prestigious project and look forward to the delivery of a world-class hotel in Finland.”
Added Samppa Lajunen, founder and portfolio manager of Samla Capital Oy: “Luxury tourism is a growing market and the demand for hotels that meet this need is also emerging across Finland. We are pleased to be partnering with Cheyne Capital, who understands the value of The Hotel Maria's concept and the luxury hotel sector.”
The finished hotel will consist of 117 rooms, two restaurants, two bars, a spa, a gym, a ballroom, and a small chapel, and is expected to launch in December 2023.
Green loan options
Other hospitality firms are finding success in the green loan space. Recently, citizenM secured a dual currency €243.3 million and £201.7 million sustainability linked loan (SLL) facilitated by HSBC UK and HSBC Continental Europe, ABN AMRO Bank and Aareal Bank.
By refinancing existing debt as a SLL, citizenM has tied its funding to specific environmental, social and governance (ESG) targets, which include reducing operating CO2 emissions and improving existing green building certifications across its European owned hotel assets. CitizenM, which operates 31 hotels across nine countries and 18 cities, said it was one of the first European hospitality businesses to adopt the SLL funding structure.
CitizenM at London Victoria Station
Fred Bos, head commercial clients sector, sustainability and E&E expertise at ABN Amro, sees the ”cooperation as a positive step towards the prevention of climate change and as an opportunity to grow our loan book in a responsible way”. He adds: “We look forward to scaling what we have achieved with this financing structure more widely across the highly attractive hotel industry.”
For Saade, too, fears over retreating bank financing may currently be overstated. “Financing is more expensive today if we look at swap rates linked to Euribor. Yet the right asset and the right sponsor are still going to get quite aggressive financing from the banks,” he notes.
“The right asset but an unknown sponsor can still obtain financing if they can supply a guarantee. For anything that is more exotic and more complicated, the gap is being filled by the credit funds and private equity. Specialist credit funds are excited as they know there is a gap to fill - we have been very active matching lenders to investors in that space.”
In conclusion, he notes: “Whoever has a refinancing event approaching will be hoping that their cash flow has caught up as they still might have to put equity down.
“But we are not seeing a huge wave of distress on the horizon, although some high-levered owners will have to sell at some point.”
0 notes
Text
Amidst banking crisis, prices soften and new lenders emerge
Pan-European investors taking comfort from the first signs of recovery in the markets of March were caught out by an icy blast hailing from the west. Massive amounts of customer withdrawals had provoked the crash of Silicon Valley Bank in California, followed swiftly by the failure of its US-peer Signature Bank.
But on closer shores, institutions proved no more secure. Days later, banking group UBS agreed to take over its Zurich-headquartered peer Credit Suisse in a £2.65 billion deal pushed through by Swiss authorities to calm the markets. Although swift action seems to have swerved a collapse that could have triggered a tsunami of banking failures, a leap in Swiss National Bank sight deposits suggests that both Credit Suisse and UBS may have taken large chunks of emergency liquidity to secure the merger, as reported by Reuters. And real estate investors know too well that when banks are saved, there are always accounts to settle at a later date.
Rising financing costs
The latest round of banking tremors has come in the wake of a year of rising swap rates and increasingly expensive financing for players in commercial real estate. A new European lending report published last week reveals that borrowers are now paying up to 6% all-in interest for loans on prime European properties, compared to just 2-3 per cent a year ago. Opportunistic or repositioning assets are priced 60-100 bpd wider.
The Bayes Business School European Commercial Real Estate Lending Report shows that in Europe, German bank lenders still offer some of the highest loan-to-value (LTV) for investment assets (between 75-80 per cent) and loan-to-cost (LTC) for development lending (between 77-82%). Other European bank lenders have been more conservative (between 55-60 per cent LTV and 60-75 per cent LTC).
Loan size also matters. Smaller loans might be priced higher because there is less lender appetite, as well as very large loans (up to €100 million), which might require more than one underwriting lender. The typical sweet spot is between €20 and 50 million, which attracts the lowest and most competitive lending rates (between 1.5-2.5% variable margin rate for a five-year loan term plus Euribor).
Importantly, the loan trend is finally having an impact on prices. "Where property yields for prime offices have been ranging from 2.75% to 3.5% the level of financing rates cannot be sustained and are forcing property values down or leaving assets and borrowers stranded," notes the research, authored by Nicole Lux, senior research fellow at Bayes Business School.
Non-traditional lenders
Amidst this gloomy outlook, there are some bright spots for equity players as values soften, and for hospitality buyers pursuing debt in the alternative space. “Finance is still available to hotel real estate investors,” affirms Patrick Saade, senior managing director of JLL’s EMEA hotels and hospitality division.
“It’s a misconception to think it’s not. In addition to traditional lenders, new lenders have set up shop to fill the gap, from private credit to private equity players.”
The Hotel Maria
Cheyne Capital is one lender which is expanding in the hospitality space. Last month, the alternative asset manager provided a €62 million senior loan to Samla Capital Oy to finance the redevelopment of The Hotel Maria, a luxury hotel located in the heart of Kruununhaka, Helsinki. The project represents Cheyne’s second real estate transaction in Finland.
Daniel Schuldes and Michael Fournier of Cheyne Capital said: “As a firm, we continue to see attractive lending opportunities in the luxury hotel sector as consumers seek out enhanced lifestyle experiences. We’re therefore proud to support Samla Capital Oy with the financing of this prestigious project and look forward to the delivery of a world-class hotel in Finland.”
Added Samppa Lajunen, founder and portfolio manager of Samla Capital Oy: “Luxury tourism is a growing market and the demand for hotels that meet this need is also emerging across Finland. We are pleased to be partnering with Cheyne Capital, who understands the value of The Hotel Maria's concept and the luxury hotel sector.”
The finished hotel will consist of 117 rooms, two restaurants, two bars, a spa, a gym, a ballroom, and a small chapel, and is expected to launch in December 2023.
Green loan options
Other hospitality firms are finding success in the green loan space. Recently, citizenM secured a dual currency €243.3 million and £201.7 million sustainability linked loan (SLL) facilitated by HSBC UK and HSBC Continental Europe, ABN AMRO Bank and Aareal Bank.
By refinancing existing debt as a SLL, citizenM has tied its funding to specific environmental, social and governance (ESG) targets, which include reducing operating CO2 emissions and improving existing green building certifications across its European owned hotel assets. CitizenM, which operates 31 hotels across nine countries and 18 cities, said it was one of the first European hospitality businesses to adopt the SLL funding structure.
CitizenM at London Victoria Station
Fred Bos, head commercial clients sector, sustainability and E&E expertise at ABN Amro, sees the ”cooperation as a positive step towards the prevention of climate change and as an opportunity to grow our loan book in a responsible way”. He adds: “We look forward to scaling what we have achieved with this financing structure more widely across the highly attractive hotel industry.”
For Saade, too, fears over retreating bank financing may currently be overstated. “Financing is more expensive today if we look at swap rates linked to Euribor. Yet the right asset and the right sponsor are still going to get quite aggressive financing from the banks,” he notes.
“The right asset but an unknown sponsor can still obtain financing if they can supply a guarantee. For anything that is more exotic and more complicated, the gap is being filled by the credit funds and private equity. Specialist credit funds are excited as they know there is a gap to fill - we have been very active matching lenders to investors in that space.”
In conclusion, he notes: “Whoever has a refinancing event approaching will be hoping that their cash flow has caught up as they still might have to put equity down.
“But we are not seeing a huge wave of distress on the horizon, although some high-levered owners will have to sell at some point.”
0 notes
Text
Amidst banking crisis, prices soften and new lenders emerge
Pan-European investors taking comfort from the first signs of recovery in the markets of March were caught out by an icy blast hailing from the west. Massive amounts of customer withdrawals had provoked the crash of Silicon Valley Bank in California, followed swiftly by the failure of its US-peer Signature Bank.
But on closer shores, institutions proved no more secure. Days later, banking group UBS agreed to take over its Zurich-headquartered peer Credit Suisse in a £2.65 billion deal pushed through by Swiss authorities to calm the markets. Although swift action seems to have swerved a collapse that could have triggered a tsunami of banking failures, a leap in Swiss National Bank sight deposits suggests that both Credit Suisse and UBS may have taken large chunks of emergency liquidity to secure the merger, as reported by Reuters. And real estate investors know too well that when banks are saved, there are always accounts to settle at a later date.
Rising financing costs
The latest round of banking tremors has come in the wake of a year of rising swap rates and increasingly expensive financing for players in commercial real estate. A new European lending report published last week reveals that borrowers are now paying up to 6% all-in interest for loans on prime European properties, compared to just 2-3 per cent a year ago. Opportunistic or repositioning assets are priced 60-100 bpd wider.
The Bayes Business School European Commercial Real Estate Lending Report shows that in Europe, German bank lenders still offer some of the highest loan-to-value (LTV) for investment assets (between 75-80 per cent) and loan-to-cost (LTC) for development lending (between 77-82%). Other European bank lenders have been more conservative (between 55-60 per cent LTV and 60-75 per cent LTC).
Loan size also matters. Smaller loans might be priced higher because there is less lender appetite, as well as very large loans (up to €100 million), which might require more than one underwriting lender. The typical sweet spot is between €20 and 50 million, which attracts the lowest and most competitive lending rates (between 1.5-2.5% variable margin rate for a five-year loan term plus Euribor).
Importantly, the loan trend is finally having an impact on prices. "Where property yields for prime offices have been ranging from 2.75% to 3.5% the level of financing rates cannot be sustained and are forcing property values down or leaving assets and borrowers stranded," notes the research, authored by Nicole Lux, senior research fellow at Bayes Business School.
Non-traditional lenders
Amidst this gloomy outlook, there are some bright spots for equity players as values soften, and for hospitality buyers pursuing debt in the alternative space. “Finance is still available to hotel real estate investors,” affirms Patrick Saade, senior managing director of JLL’s EMEA hotels and hospitality division.
“It’s a misconception to think it’s not. In addition to traditional lenders, new lenders have set up shop to fill the gap, from private credit to private equity players.”
The Hotel Maria
Cheyne Capital is one lender which is expanding in the hospitality space. Last month, the alternative asset manager provided a €62 million senior loan to Samla Capital Oy to finance the redevelopment of The Hotel Maria, a luxury hotel located in the heart of Kruununhaka, Helsinki. The project represents Cheyne’s second real estate transaction in Finland.
Daniel Schuldes and Michael Fournier of Cheyne Capital said: “As a firm, we continue to see attractive lending opportunities in the luxury hotel sector as consumers seek out enhanced lifestyle experiences. We’re therefore proud to support Samla Capital Oy with the financing of this prestigious project and look forward to the delivery of a world-class hotel in Finland.”
Added Samppa Lajunen, founder and portfolio manager of Samla Capital Oy: “Luxury tourism is a growing market and the demand for hotels that meet this need is also emerging across Finland. We are pleased to be partnering with Cheyne Capital, who understands the value of The Hotel Maria's concept and the luxury hotel sector.”
The finished hotel will consist of 117 rooms, two restaurants, two bars, a spa, a gym, a ballroom, and a small chapel, and is expected to launch in December 2023.
Green loan options
Other hospitality firms are finding success in the green loan space. Recently, citizenM secured a dual currency €243.3 million and £201.7 million sustainability linked loan (SLL) facilitated by HSBC UK and HSBC Continental Europe, ABN AMRO Bank and Aareal Bank.
By refinancing existing debt as a SLL, citizenM has tied its funding to specific environmental, social and governance (ESG) targets, which include reducing operating CO2 emissions and improving existing green building certifications across its European owned hotel assets. CitizenM, which operates 31 hotels across nine countries and 18 cities, said it was one of the first European hospitality businesses to adopt the SLL funding structure.
CitizenM at London Victoria Station
Fred Bos, head commercial clients sector, sustainability and E&E expertise at ABN Amro, sees the ”cooperation as a positive step towards the prevention of climate change and as an opportunity to grow our loan book in a responsible way”. He adds: “We look forward to scaling what we have achieved with this financing structure more widely across the highly attractive hotel industry.”
For Saade, too, fears over retreating bank financing may currently be overstated. “Financing is more expensive today if we look at swap rates linked to Euribor. Yet the right asset and the right sponsor are still going to get quite aggressive financing from the banks,” he notes.
“The right asset but an unknown sponsor can still obtain financing if they can supply a guarantee. For anything that is more exotic and more complicated, the gap is being filled by the credit funds and private equity. Specialist credit funds are excited as they know there is a gap to fill - we have been very active matching lenders to investors in that space.”
In conclusion, he notes: “Whoever has a refinancing event approaching will be hoping that their cash flow has caught up as they still might have to put equity down.
“But we are not seeing a huge wave of distress on the horizon, although some high-levered owners will have to sell at some point.”
0 notes
Text
Amidst banking crisis, prices soften and new lenders emerge
Pan-European investors taking comfort from the first signs of recovery in the markets of March were caught out by an icy blast hailing from the west. Massive amounts of customer withdrawals had provoked the crash of Silicon Valley Bank in California, followed swiftly by the failure of its US-peer Signature Bank.
But on closer shores, institutions proved no more secure. Days later, banking group UBS agreed to take over its Zurich-headquartered peer Credit Suisse in a £2.65 billion deal pushed through by Swiss authorities to calm the markets. Although swift action seems to have swerved a collapse that could have triggered a tsunami of banking failures, a leap in Swiss National Bank sight deposits suggests that both Credit Suisse and UBS may have taken large chunks of emergency liquidity to secure the merger, as reported by Reuters. And real estate investors know too well that when banks are saved, there are always accounts to settle at a later date.
Rising financing costs
The latest round of banking tremors has come in the wake of a year of rising swap rates and increasingly expensive financing for players in commercial real estate. A new European lending report published last week reveals that borrowers are now paying up to 6% all-in interest for loans on prime European properties, compared to just 2-3 per cent a year ago. Opportunistic or repositioning assets are priced 60-100 bpd wider.
The Bayes Business School European Commercial Real Estate Lending Report shows that in Europe, German bank lenders still offer some of the highest loan-to-value (LTV) for investment assets (between 75-80 per cent) and loan-to-cost (LTC) for development lending (between 77-82%). Other European bank lenders have been more conservative (between 55-60 per cent LTV and 60-75 per cent LTC).
Loan size also matters. Smaller loans might be priced higher because there is less lender appetite, as well as very large loans (up to €100 million), which might require more than one underwriting lender. The typical sweet spot is between €20 and 50 million, which attracts the lowest and most competitive lending rates (between 1.5-2.5% variable margin rate for a five-year loan term plus Euribor).
Importantly, the loan trend is finally having an impact on prices. "Where property yields for prime offices have been ranging from 2.75% to 3.5% the level of financing rates cannot be sustained and are forcing property values down or leaving assets and borrowers stranded," notes the research, authored by Nicole Lux, senior research fellow at Bayes Business School.
Non-traditional lenders
Amidst this gloomy outlook, there are some bright spots for equity players as values soften, and for hospitality buyers pursuing debt in the alternative space. “Finance is still available to hotel real estate investors,” affirms Patrick Saade, senior managing director of JLL’s EMEA hotels and hospitality division.
“It’s a misconception to think it’s not. In addition to traditional lenders, new lenders have set up shop to fill the gap, from private credit to private equity players.”
The Hotel Maria
Cheyne Capital is one lender which is expanding in the hospitality space. Last month, the alternative asset manager provided a €62 million senior loan to Samla Capital Oy to finance the redevelopment of The Hotel Maria, a luxury hotel located in the heart of Kruununhaka, Helsinki. The project represents Cheyne’s second real estate transaction in Finland.
Daniel Schuldes and Michael Fournier of Cheyne Capital said: “As a firm, we continue to see attractive lending opportunities in the luxury hotel sector as consumers seek out enhanced lifestyle experiences. We’re therefore proud to support Samla Capital Oy with the financing of this prestigious project and look forward to the delivery of a world-class hotel in Finland.”
Added Samppa Lajunen, founder and portfolio manager of Samla Capital Oy: “Luxury tourism is a growing market and the demand for hotels that meet this need is also emerging across Finland. We are pleased to be partnering with Cheyne Capital, who understands the value of The Hotel Maria's concept and the luxury hotel sector.”
The finished hotel will consist of 117 rooms, two restaurants, two bars, a spa, a gym, a ballroom, and a small chapel, and is expected to launch in December 2023.
Green loan options
Other hospitality firms are finding success in the green loan space. Recently, citizenM secured a dual currency €243.3 million and £201.7 million sustainability linked loan (SLL) facilitated by HSBC UK and HSBC Continental Europe, ABN AMRO Bank and Aareal Bank.
By refinancing existing debt as a SLL, citizenM has tied its funding to specific environmental, social and governance (ESG) targets, which include reducing operating CO2 emissions and improving existing green building certifications across its European owned hotel assets. CitizenM, which operates 31 hotels across nine countries and 18 cities, said it was one of the first European hospitality businesses to adopt the SLL funding structure.
CitizenM at London Victoria Station
Fred Bos, head commercial clients sector, sustainability and E&E expertise at ABN Amro, sees the ”cooperation as a positive step towards the prevention of climate change and as an opportunity to grow our loan book in a responsible way”. He adds: “We look forward to scaling what we have achieved with this financing structure more widely across the highly attractive hotel industry.”
For Saade, too, fears over retreating bank financing may currently be overstated. “Financing is more expensive today if we look at swap rates linked to Euribor. Yet the right asset and the right sponsor are still going to get quite aggressive financing from the banks,” he notes.
“The right asset but an unknown sponsor can still obtain financing if they can supply a guarantee. For anything that is more exotic and more complicated, the gap is being filled by the credit funds and private equity. Specialist credit funds are excited as they know there is a gap to fill - we have been very active matching lenders to investors in that space.”
In conclusion, he notes: “Whoever has a refinancing event approaching will be hoping that their cash flow has caught up as they still might have to put equity down.
“But we are not seeing a huge wave of distress on the horizon, although some high-levered owners will have to sell at some point.”
0 notes
Text
Amidst banking crisis, prices soften and new lenders emerge
Pan-European investors taking comfort from the first signs of recovery in the markets of March were caught out by an icy blast hailing from the west. Massive amounts of customer withdrawals had provoked the crash of Silicon Valley Bank in California, followed swiftly by the failure of its US-peer Signature Bank.
But on closer shores, institutions proved no more secure. Days later, banking group UBS agreed to take over its Zurich-headquartered peer Credit Suisse in a £2.65 billion deal pushed through by Swiss authorities to calm the markets. Although swift action seems to have swerved a collapse that could have triggered a tsunami of banking failures, a leap in Swiss National Bank sight deposits suggests that both Credit Suisse and UBS may have taken large chunks of emergency liquidity to secure the merger, as reported by Reuters. And real estate investors know too well that when banks are saved, there are always accounts to settle at a later date.
Rising financing costs
The latest round of banking tremors has come in the wake of a year of rising swap rates and increasingly expensive financing for players in commercial real estate. A new European lending report published last week reveals that borrowers are now paying up to 6% all-in interest for loans on prime European properties, compared to just 2-3 per cent a year ago. Opportunistic or repositioning assets are priced 60-100 bpd wider.
The Bayes Business School European Commercial Real Estate Lending Report shows that in Europe, German bank lenders still offer some of the highest loan-to-value (LTV) for investment assets (between 75-80 per cent) and loan-to-cost (LTC) for development lending (between 77-82%). Other European bank lenders have been more conservative (between 55-60 per cent LTV and 60-75 per cent LTC).
Loan size also matters. Smaller loans might be priced higher because there is less lender appetite, as well as very large loans (up to €100 million), which might require more than one underwriting lender. The typical sweet spot is between €20 and 50 million, which attracts the lowest and most competitive lending rates (between 1.5-2.5% variable margin rate for a five-year loan term plus Euribor).
Importantly, the loan trend is finally having an impact on prices. "Where property yields for prime offices have been ranging from 2.75% to 3.5% the level of financing rates cannot be sustained and are forcing property values down or leaving assets and borrowers stranded," notes the research, authored by Nicole Lux, senior research fellow at Bayes Business School.
Non-traditional lenders
Amidst this gloomy outlook, there are some bright spots for equity players as values soften, and for hospitality buyers pursuing debt in the alternative space. “Finance is still available to hotel real estate investors,” affirms Patrick Saade, senior managing director of JLL’s EMEA hotels and hospitality division.
“It’s a misconception to think it’s not. In addition to traditional lenders, new lenders have set up shop to fill the gap, from private credit to private equity players.”
The Hotel Maria
Cheyne Capital is one lender which is expanding in the hospitality space. Last month, the alternative asset manager provided a €62 million senior loan to Samla Capital Oy to finance the redevelopment of The Hotel Maria, a luxury hotel located in the heart of Kruununhaka, Helsinki. The project represents Cheyne’s second real estate transaction in Finland.
Daniel Schuldes and Michael Fournier of Cheyne Capital said: “As a firm, we continue to see attractive lending opportunities in the luxury hotel sector as consumers seek out enhanced lifestyle experiences. We’re therefore proud to support Samla Capital Oy with the financing of this prestigious project and look forward to the delivery of a world-class hotel in Finland.”
Added Samppa Lajunen, founder and portfolio manager of Samla Capital Oy: “Luxury tourism is a growing market and the demand for hotels that meet this need is also emerging across Finland. We are pleased to be partnering with Cheyne Capital, who understands the value of The Hotel Maria's concept and the luxury hotel sector.”
The finished hotel will consist of 117 rooms, two restaurants, two bars, a spa, a gym, a ballroom, and a small chapel, and is expected to launch in December 2023.
Green loan options
Other hospitality firms are finding success in the green loan space. Recently, citizenM secured a dual currency €243.3 million and £201.7 million sustainability linked loan (SLL) facilitated by HSBC UK and HSBC Continental Europe, ABN AMRO Bank and Aareal Bank.
By refinancing existing debt as a SLL, citizenM has tied its funding to specific environmental, social and governance (ESG) targets, which include reducing operating CO2 emissions and improving existing green building certifications across its European owned hotel assets. CitizenM, which operates 31 hotels across nine countries and 18 cities, said it was one of the first European hospitality businesses to adopt the SLL funding structure.
CitizenM at London Victoria Station
Fred Bos, head commercial clients sector, sustainability and E&E expertise at ABN Amro, sees the ”cooperation as a positive step towards the prevention of climate change and as an opportunity to grow our loan book in a responsible way”. He adds: “We look forward to scaling what we have achieved with this financing structure more widely across the highly attractive hotel industry.”
For Saade, too, fears over retreating bank financing may currently be overstated. “Financing is more expensive today if we look at swap rates linked to Euribor. Yet the right asset and the right sponsor are still going to get quite aggressive financing from the banks,” he notes.
“The right asset but an unknown sponsor can still obtain financing if they can supply a guarantee. For anything that is more exotic and more complicated, the gap is being filled by the credit funds and private equity. Specialist credit funds are excited as they know there is a gap to fill - we have been very active matching lenders to investors in that space.”
In conclusion, he notes: “Whoever has a refinancing event approaching will be hoping that their cash flow has caught up as they still might have to put equity down.
“But we are not seeing a huge wave of distress on the horizon, although some high-levered owners will have to sell at some point.”
0 notes
Text
Amidst banking crisis, prices soften and new lenders emerge
Pan-European investors taking comfort from the first signs of recovery in the markets of March were caught out by an icy blast hailing from the west. Massive amounts of customer withdrawals had provoked the crash of Silicon Valley Bank in California, followed swiftly by the failure of its US-peer Signature Bank.
But on closer shores, institutions proved no more secure. Days later, banking group UBS agreed to take over its Zurich-headquartered peer Credit Suisse in a £2.65 billion deal pushed through by Swiss authorities to calm the markets. Although swift action seems to have swerved a collapse that could have triggered a tsunami of banking failures, a leap in Swiss National Bank sight deposits suggests that both Credit Suisse and UBS may have taken large chunks of emergency liquidity to secure the merger, as reported by Reuters. And real estate investors know too well that when banks are saved, there are always accounts to settle at a later date.
Rising financing costs
The latest round of banking tremors has come in the wake of a year of rising swap rates and increasingly expensive financing for players in commercial real estate. A new European lending report published last week reveals that borrowers are now paying up to 6% all-in interest for loans on prime European properties, compared to just 2-3 per cent a year ago. Opportunistic or repositioning assets are priced 60-100 bpd wider.
The Bayes Business School European Commercial Real Estate Lending Report shows that in Europe, German bank lenders still offer some of the highest loan-to-value (LTV) for investment assets (between 75-80 per cent) and loan-to-cost (LTC) for development lending (between 77-82%). Other European bank lenders have been more conservative (between 55-60 per cent LTV and 60-75 per cent LTC).
Loan size also matters. Smaller loans might be priced higher because there is less lender appetite, as well as very large loans (up to €100 million), which might require more than one underwriting lender. The typical sweet spot is between €20 and 50 million, which attracts the lowest and most competitive lending rates (between 1.5-2.5% variable margin rate for a five-year loan term plus Euribor).
Importantly, the loan trend is finally having an impact on prices. "Where property yields for prime offices have been ranging from 2.75% to 3.5% the level of financing rates cannot be sustained and are forcing property values down or leaving assets and borrowers stranded," notes the research, authored by Nicole Lux, senior research fellow at Bayes Business School.
Non-traditional lenders
Amidst this gloomy outlook, there are some bright spots for equity players as values soften, and for hospitality buyers pursuing debt in the alternative space. “Finance is still available to hotel real estate investors,” affirms Patrick Saade, senior managing director of JLL’s EMEA hotels and hospitality division.
“It’s a misconception to think it’s not. In addition to traditional lenders, new lenders have set up shop to fill the gap, from private credit to private equity players.”
The Hotel Maria
Cheyne Capital is one lender which is expanding in the hospitality space. Last month, the alternative asset manager provided a €62 million senior loan to Samla Capital Oy to finance the redevelopment of The Hotel Maria, a luxury hotel located in the heart of Kruununhaka, Helsinki. The project represents Cheyne’s second real estate transaction in Finland.
Daniel Schuldes and Michael Fournier of Cheyne Capital said: “As a firm, we continue to see attractive lending opportunities in the luxury hotel sector as consumers seek out enhanced lifestyle experiences. We’re therefore proud to support Samla Capital Oy with the financing of this prestigious project and look forward to the delivery of a world-class hotel in Finland.”
Added Samppa Lajunen, founder and portfolio manager of Samla Capital Oy: “Luxury tourism is a growing market and the demand for hotels that meet this need is also emerging across Finland. We are pleased to be partnering with Cheyne Capital, who understands the value of The Hotel Maria's concept and the luxury hotel sector.”
The finished hotel will consist of 117 rooms, two restaurants, two bars, a spa, a gym, a ballroom, and a small chapel, and is expected to launch in December 2023.
Green loan options
Other hospitality firms are finding success in the green loan space. Recently, citizenM secured a dual currency €243.3 million and £201.7 million sustainability linked loan (SLL) facilitated by HSBC UK and HSBC Continental Europe, ABN AMRO Bank and Aareal Bank.
By refinancing existing debt as a SLL, citizenM has tied its funding to specific environmental, social and governance (ESG) targets, which include reducing operating CO2 emissions and improving existing green building certifications across its European owned hotel assets. CitizenM, which operates 31 hotels across nine countries and 18 cities, said it was one of the first European hospitality businesses to adopt the SLL funding structure.
CitizenM at London Victoria Station
Fred Bos, head commercial clients sector, sustainability and E&E expertise at ABN Amro, sees the ”cooperation as a positive step towards the prevention of climate change and as an opportunity to grow our loan book in a responsible way”. He adds: “We look forward to scaling what we have achieved with this financing structure more widely across the highly attractive hotel industry.”
For Saade, too, fears over retreating bank financing may currently be overstated. “Financing is more expensive today if we look at swap rates linked to Euribor. Yet the right asset and the right sponsor are still going to get quite aggressive financing from the banks,” he notes.
“The right asset but an unknown sponsor can still obtain financing if they can supply a guarantee. For anything that is more exotic and more complicated, the gap is being filled by the credit funds and private equity. Specialist credit funds are excited as they know there is a gap to fill - we have been very active matching lenders to investors in that space.”
In conclusion, he notes: “Whoever has a refinancing event approaching will be hoping that their cash flow has caught up as they still might have to put equity down.
“But we are not seeing a huge wave of distress on the horizon, although some high-levered owners will have to sell at some point.”
0 notes
Text
Amidst banking crisis, prices soften and new lenders emerge
Pan-European investors taking comfort from the first signs of recovery in the markets of March were caught out by an icy blast hailing from the west. Massive amounts of customer withdrawals had provoked the crash of Silicon Valley Bank in California, followed swiftly by the failure of its US-peer Signature Bank.
But on closer shores, institutions proved no more secure. Days later, banking group UBS agreed to take over its Zurich-headquartered peer Credit Suisse in a £2.65 billion deal pushed through by Swiss authorities to calm the markets. Although swift action seems to have swerved a collapse that could have triggered a tsunami of banking failures, a leap in Swiss National Bank sight deposits suggests that both Credit Suisse and UBS may have taken large chunks of emergency liquidity to secure the merger, as reported by Reuters. And real estate investors know too well that when banks are saved, there are always accounts to settle at a later date.
Rising financing costs
The latest round of banking tremors has come in the wake of a year of rising swap rates and increasingly expensive financing for players in commercial real estate. A new European lending report published last week reveals that borrowers are now paying up to 6% all-in interest for loans on prime European properties, compared to just 2-3 per cent a year ago. Opportunistic or repositioning assets are priced 60-100 bpd wider.
The Bayes Business School European Commercial Real Estate Lending Report shows that in Europe, German bank lenders still offer some of the highest loan-to-value (LTV) for investment assets (between 75-80 per cent) and loan-to-cost (LTC) for development lending (between 77-82%). Other European bank lenders have been more conservative (between 55-60 per cent LTV and 60-75 per cent LTC).
Loan size also matters. Smaller loans might be priced higher because there is less lender appetite, as well as very large loans (up to €100 million), which might require more than one underwriting lender. The typical sweet spot is between €20 and 50 million, which attracts the lowest and most competitive lending rates (between 1.5-2.5% variable margin rate for a five-year loan term plus Euribor).
Importantly, the loan trend is finally having an impact on prices. "Where property yields for prime offices have been ranging from 2.75% to 3.5% the level of financing rates cannot be sustained and are forcing property values down or leaving assets and borrowers stranded," notes the research, authored by Nicole Lux, senior research fellow at Bayes Business School.
Non-traditional lenders
Amidst this gloomy outlook, there are some bright spots for equity players as values soften, and for hospitality buyers pursuing debt in the alternative space. “Finance is still available to hotel real estate investors,” affirms Patrick Saade, senior managing director of JLL’s EMEA hotels and hospitality division.
“It’s a misconception to think it’s not. In addition to traditional lenders, new lenders have set up shop to fill the gap, from private credit to private equity players.”
The Hotel Maria
Cheyne Capital is one lender which is expanding in the hospitality space. Last month, the alternative asset manager provided a €62 million senior loan to Samla Capital Oy to finance the redevelopment of The Hotel Maria, a luxury hotel located in the heart of Kruununhaka, Helsinki. The project represents Cheyne’s second real estate transaction in Finland.
Daniel Schuldes and Michael Fournier of Cheyne Capital said: “As a firm, we continue to see attractive lending opportunities in the luxury hotel sector as consumers seek out enhanced lifestyle experiences. We’re therefore proud to support Samla Capital Oy with the financing of this prestigious project and look forward to the delivery of a world-class hotel in Finland.”
Added Samppa Lajunen, founder and portfolio manager of Samla Capital Oy: “Luxury tourism is a growing market and the demand for hotels that meet this need is also emerging across Finland. We are pleased to be partnering with Cheyne Capital, who understands the value of The Hotel Maria's concept and the luxury hotel sector.”
The finished hotel will consist of 117 rooms, two restaurants, two bars, a spa, a gym, a ballroom, and a small chapel, and is expected to launch in December 2023.
Green loan options
Other hospitality firms are finding success in the green loan space. Recently, citizenM secured a dual currency €243.3 million and £201.7 million sustainability linked loan (SLL) facilitated by HSBC UK and HSBC Continental Europe, ABN AMRO Bank and Aareal Bank.
By refinancing existing debt as a SLL, citizenM has tied its funding to specific environmental, social and governance (ESG) targets, which include reducing operating CO2 emissions and improving existing green building certifications across its European owned hotel assets. CitizenM, which operates 31 hotels across nine countries and 18 cities, said it was one of the first European hospitality businesses to adopt the SLL funding structure.
CitizenM at London Victoria Station
Fred Bos, head commercial clients sector, sustainability and E&E expertise at ABN Amro, sees the ”cooperation as a positive step towards the prevention of climate change and as an opportunity to grow our loan book in a responsible way”. He adds: “We look forward to scaling what we have achieved with this financing structure more widely across the highly attractive hotel industry.”
For Saade, too, fears over retreating bank financing may currently be overstated. “Financing is more expensive today if we look at swap rates linked to Euribor. Yet the right asset and the right sponsor are still going to get quite aggressive financing from the banks,” he notes.
“The right asset but an unknown sponsor can still obtain financing if they can supply a guarantee. For anything that is more exotic and more complicated, the gap is being filled by the credit funds and private equity. Specialist credit funds are excited as they know there is a gap to fill - we have been very active matching lenders to investors in that space.”
In conclusion, he notes: “Whoever has a refinancing event approaching will be hoping that their cash flow has caught up as they still might have to put equity down.
“But we are not seeing a huge wave of distress on the horizon, although some high-levered owners will have to sell at some point.”
0 notes
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