logo redirect pin user minus plus fax mobile-phone office-phone data envelope globe outlook retail close line-arrow-down solid-triangle-down facebook globe2 google hamburger line-arrow-left solid-triangle-left linkedin wechat play-btn line-arrow-right arrow-right solid-triangle-right search twitter line-arrow-up solid-triangle-up calendar globe-americas globe-apac globe-emea external-link music picture paper pictures play gallery download rss-feed vcard account-loading collection external-link2 internal-link share-link icon-close2
Japan
  • Global
  • United States
  • Angola
  • Argentina
  • Australia
  • Austria
  • Bahrain
  • Baltics
  • Belgium
  • Brazil
  • Bulgaria
  • Cambodia
  • Canada
  • Chile
  • Colombia
  • Czech Republic
  • Denmark
  • Egypt
  • Finland
  • France
  • Germany
  • Greece
  • Hong Kong
  • Hungary
  • India
  • Indonesia
  • Ireland
  • Israel
  • Italy
  • Japan
  • Jordan
  • Kazakhstan
  • Kenya
  • Korea
  • Kuwait
  • Latin America
  • Luxembourg
  • Mainland China
  • Malaysia
  • Mexico
  • Morocco
  • Netherlands
  • New Zealand
  • Norway
  • Oman
  • Pakistan
  • Panama
  • Peru
  • Philippines
  • Poland
  • Portugal
  • Romania
  • Russia
  • Saudi Arabia
  • Singapore
  • Slovakia
  • South Eastern Europe
  • Spain
  • Sweden
  • Switzerland
  • Taiwan
  • Thailand
  • Turkey
  • Ukraine
  • United Arab Emirates
  • United Kingdom
  • Venezuela
  • Vietnam
English
  • English
  • 日本語
Log In
  • Global Intranet
  • myCBRE
  • Services
    • Business Lines
      • Advisory & Transaction Services
      • Capital Markets
      • Global Workplace Solutions
      • Property Management
      • Valuation Advisory & Consulting Services
    • Industries & Specialities
      • Office
      • Industrial & Logistics
      • Retail
      • Data Center Solutions
      • Hotels
      • Flexible Workspace
    • Services for Investors
      • Asset Management
      • Capital Advisors
      • Consulting
      • Leasing & Advisory
      • Project Management
      • Property Management
      • Property Sales
      • Valuation & Advisory
    • Services for Occupiers
      • Enterprise Facilities Management
      • Leasing & Advisory
      • Occupier Consulting
      • Project Management
      • Transaction Management & Portfolio Services
      • Valuation & Advisory
      • Workplace Strategy
  • Properties
  • Research & Reports
    • About Research
      Japan Research Archive
      Asia Pacific Research
      Global Research & Reports
      Global Research Support
  • People & Offices
  • About CBRE
    • Corporate Information
      Corporate Profile
      A Message from the President & CEO
      Media Center
      Asia Media Center
      Case Studies
      Awards & Recognition
      Investor Relations
      Corporate Responsibility
      Careers
      File Transfer Services

Next

CBRE #1 Real Estate Company on Fortune's Most Admired List for Third Consecutive Year
  • Home
  • About CBRE
  • Media Center
  • 2020 Japan Lender Survey

CBRE Releases Results of 2020 Japan Lender Survey

Tokyo | June 23, 2020
  • Email
  • Share
  • Tweet
  • Share

New non-recourse lending for real estate expected to decrease in fiscal 2020; lenders turn more selective amid concerns over COVID-19 economic impact

 

CBRE today released "2020 Japan Lender Survey", a report that summarizes the results of a survey conducted amongst lenders that provide financing for real estate firms and real estate funds. The survey, which was conducted from late-April to end-May, asked lenders about their outlook on the real estate market and their lending policy.

 

Highlights:

New non-recourse lending for real estate expected to decrease in fiscal 2020
According to the 25 lenders that participated in the survey, new non-recourse lending to the real estate sector is expected to decrease in fiscal 2020. Forty-one percent of lenders in the case of senior loans (+31pt y-o-y), and 20% of lenders in the case of mezzanine loans (+11pt y-o-y) said that their lending volume in fiscal 2020 would "decrease" compared with fiscal 2019 (Figure 1).

Figure 1: New lending outlook
Figure 1
Source: CBRE, June 2020

 

Probability of loan recovery seen as most important factor in lending decisions
The survey indicated that lenders are focused on future real estate price movements and appear to be looking to increase the probability of exit/loan recovery. When asked to identify the most important factors they consider when deciding whether to extend a non-recourse loan for real estate, the most cited factor was "LTV" (40%, +4pt y-o-y), followed by "sponsor" (16%) and "stability of income stream" (16%), a similar finding to last year’s survey (Figure 2).

Figure 2: Most important factors in making a lending decision
Figure 2
Source: CBRE, June 2020

 

Logistics identified as most attractive asset type for lending
In comparison to last year, this year’s survey noted sharp decreases in "retail" (cited by 79% of respondents; –23pt y-o-y) and "hotel" (58%; –32pt y-o-y) – asset types that have been severely impacted by COVID-19. The results of the survey revealed an increasingly selective approach on the part of lenders. When asked to identify the most attractive asset type for investment in fiscal 2020, "logistics" came top (cited by 55% of respondents), a substantial increase of 37 points y-o-y. This was followed by "offices" (23%) and "residential" (18%). Lenders’ positive view towards logistics is likely due to the strong growth in the sector, supported by the expansion of e-commerce, and the stability of profits from long-term contracts.

Lenders turn more selective due to economic impact of COVID-19
The biggest threat to the real estate finance market in fiscal 2020 is seen as "domestic and global economic shock" (48%). As many as 36% of those respondents cited COVID-19 in their comments, reflecting fears that the pandemic will lead to the deterioration of the domestic and global economy. Regarding the outlook for the debt market over the next year, “spreads will widen” (80%) was the most cited answer, followed by "real estate prices will fall" (68%) and "LTV ratios will decrease" (68%). With COVID-19 likely to take some time to be eradicated, the outlook for the real estate market is unclear, prompting greater caution on the part of lenders (Figure 3).

Figure 3: Market outlook
Figure 3
Source: CBRE, June 2020

 

Asuka Honda, Director of CBRE Research, commented: "Lenders fear a decline in real estate investment due to the uncertainty surrounding COVID-19. The survey results indicate that lenders are becoming more selective and are likely to adopt a more cautious stance towards lending in future."

 

For further details, refer to the 2020 Japan Lender Survey released today.
https://www.cbre.co.jp/en/research-reports/investment-reports

 

Overview of 2020 Japan Lender Survey

  1. Objectives and scope of survey
    To gather and analyze data to identify lenders' approach to real estate financing. The survey covered parties providing non-recourse loans for real estate.
  2. Survey method and period
    Conducted using a questionnaire (file sent by email) and website from April to May 2020
  3. Respondents and response rate
    Targeted companies: 41; Responding companies: 25; Response rate: 61%
  4. Main cooperating companies (in random order):
    Societe Generale, Tokyo Branch
    Fuyo General Lease Co.,Ltd.
    The Tokyo Star Bank, Limited
    Mizuho Securities Principal Investment Co., Ltd.
    ORIX Life Insurance Corporation
    AXA Real Estate Investment Managers Japan K.K.
    MUFG Bank, Ltd.
    Kiraboshi Bank, Ltd.
    Shinsei Bank, Limited
    Mizuho Bank, Ltd.
    Keystone Partners Co., Ltd
    Diamond Realty Management Inc.
    Mitsubishi UFJ Lease & Finance Company, Limited
    (And 12 other companies)
  5. Publication of survey results
    Only some of the survey questions are included in this report

 

Glossary of Terms

  • Senior loan: A form of loan with higher repayment priority, for example with a first priority security interest in the property
  • Mezzanine loan: A form of loan with repayment priority subordinate to that of a senior loan, for example with a second or lower priority security interest in the property
  • LTV: The ratio of the loan to the value of the asset (amount of loan divided by the asset value)
  • Spread: A rate added by the lender to the reference interest rate (loan interest rate = reference interest rate + spread)

 

 

Download this news release in PDF format

ABOUT CBRE GROUP, INC.

CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2020 revenue). The company has more than 100,000 employees serving clients in more than 100 countries. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services.
Please visit our global website at www.cbre.com or our Japan office website at www.cbre.co.jp/en.
Official Twitter account for Japan: @cbrejapan

DISCLAIMER

Neither CBRE nor its affiliated companies make any warranties or claims on the implied accuracy of the information contained herein.

Media Contacts

Marketing & Communications
+81 3 5288 9283
  • About Us
  • Corporate Information
  • People & Offices
  • Media Centre
  • Corporate Responsibility
  • Investor Relations
  • Careers
  • Contact Us
  • Disclaimer
  • Terms of Use
  • Japan Privacy Policy
  • Global Web Privacy and Cookie Policy
  • Transactions Involving Financial Instruments
  • Basic Company Policy on Dealing with Anti-Social Elements
  • Global Supplier Code of Conduct
  • LinkedIn
  • Twitter
  • Facebook
  • YouTube
  • Instagram