Cost of borrowing falls in the UK, bucking Europe-wide trends

The UK was one of just three countries to see a decline in the total cost of borrowing in CBRE’s third-quarter European Debt Map. The total cost of debt fell from 2.92% to 2.79% in Q3, although the report showed that shifts in the UK debt market favoured neither borrowers nor lenders since both senior margins and loan-to-value ratios fell. In Europe as a whole, the cost of borrowing rose 11bp to 2.28%. The rise was particularly high in Central and Eastern Europe, where total cost was up 32bp to 3.06%. Ireland and Spain were the other two countries where the cost of borrowing fell. Borrowers in Spain are in a particularly strong position, as LTV rose from 60% to 65% and the total cost of borrowing fell 54bp to 1.72%. Paul Coates, head of debt and structured finance at CBRE UK, said: “We can see across the market that the depth of liquidity from lenders continues to increase, across both geography and asset class. “This competitive landscape gives borrowers the opportunity to secure favourable terms, not only on margins – as the data shows – but also flexibility on structure to support the clients’ business plans.”   To send feedback, e-mail karl.tomusk@egi.co.uk or tweet @karltomusk or @estatesgazette