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
  • Albania
  • Argentina
  • Australia
  • Austria
  • Bahrain
  • Baltics
  • Belgium
  • Bosnia & Herzegovina
  • Brazil
  • Bulgaria
  • Cambodia
  • Canada
  • Chile
  • Colombia
  • Croatia
  • 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
  • Montenegro
  • Morocco
  • Netherlands
  • New Zealand
  • North Macedonia
  • Norway
  • Oman
  • Pakistan
  • Panama
  • Philippines
  • Poland
  • Portugal
  • Romania
  • Saudi Arabia
  • Serbia
  • Singapore
  • Slovakia
  • Slovenia
  • South Eastern Europe
  • Spain
  • Sweden
  • Switzerland
  • Taiwan
  • Thailand
  • Turkey
  • Ukraine
  • United Arab Emirates
  • United Kingdom
  • Venezuela
  • Vietnam
English
  • 日本語
  • English
Log In
  • Global Intranet
  • myCBRE
  • Services
    • Business Lines
      • Advisory & Transaction Services
      • Capital Markets
      • Corporate Coverage
      • 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
      • Renewable Energy Advisory & Consulting
    • Services for Occupiers
      • Enterprise Facilities Management
      • Leasing & Advisory
      • Occupier Consulting
      • Project Management
      • Transaction Management & Portfolio Services
      • Valuation & Advisory
      • Workplace Strategy
      • Renewable Energy Advisory & Consulting
  • 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
      Awards & Recognition
      Corporate Responsibility
      ESG Initiatives
      Investor Relations
      Careers
      File Transfer Services

Previous

Press Release
CBRE Releases "Japanese Outbound Real Estate Investment H1 2018"

Next

Press Release
CBRE Releases "COWORKING OFFICE – A NEW ERA OF WORKING PLATFORM"
  • Home
  • About CBRE
  • Media Center
  • CBRE Japan Lender Survey 2018

CBRE Conducts Its First Lender Survey in Japan

Tokyo | October 4, 2018
  • Email
  • Share
  • Tweet
  • Share

Amount of lending expected to increase in fiscal 2018, but lenders remain cautious and rational

 

CBRE today released a report titled, "CBRE Lender Survey 2018" which summarizes the results from a survey of lenders providing finances for domestic real estate investment. The survey asked lenders about the outlook for the real estate market and their lending strategy.

 

Highlights

  1. Lending strategy
    • New lending expected to increase in fiscal 2018
      Lenders who said that the amount of lending in fiscal 2018 would be "unchanged" or be more ("increase") than fiscal 2017 totalled 78% of lenders in the case of senior loans, and 92% of lenders in the case of mezzanine loans.
    • The most important factor when making a financing decision is "LTV"
      The survey asked respondents what the most important factors were when deciding whether to extend a non-recourse loan for real estate. The most common answer was LTV (the ratio of the loan to the value of the asset), cited by 27% of respondents. According to the survey results, the guideline LTV ratio for lending is currently 50–80%. Given that many projects are seen to have had a much higher LTV ratio prior to the global financial crisis, it seems reasonable to think that lenders have become more cautious than that time.
    • "Offices" are the most attractive asset type for lending (50%)
      Lenders' preference for office suggests they value the market size, availability of market information, and high liquidity. Meanwhile, relatively high proportion of lenders are involved in development projects for logistics facilities and hotels, compared with other assets. This reflects the fact that with both logistics facilities and hotels, there is a significant number of development projects relative to the quantity of existing stock.
    • Tokyo and the Greater Tokyo area are the most attractive areas for lending; Fukuoka ranks high for offices
      With regard to lending for office buildings, Fukuoka ranked fourth after Tokyo, Osaka, and Yokohama. Supply-demand conditions in the regional office markets are likely to remain tight. The expectation of further rise in rents appears to be the reason for lenders' positive view on regional cities.
  2. Lending criteria: Spreads and LTV ratios in the case of financing for Tokyo prime assets*
    Lending type Spread (bps) LTV (%)
    Senior loan 80 - 90 50 - 70
    Mezzanine loan 250 - 340 70 - 80
    *Median of upper/lower values in the range. The included asset types were offices, retail facilities, logistics facilities, rental condominiums, and hotels. Respondents were questioned about the attributes of high-quality properties positioned as Tokyo prime assets. See the main report for details.
  3. Outlook
    • The biggest threats in the debt market were cited as "domestic and global economic shock" (38%), followed by the "rapid rise in interest rates that exceeds forecasts" (19%). Looking at lenders' comments, "domestic and global economic shock", included concerns about natural disasters and global political conditions, as well as the U.S.- China trade friction.
    • For the outlook for the coming year, the survey suggests that lenders see real estate sales prices rising, LTV ratios falling, and spreads increasing.
    • Asuka Honda, Associate Director of Research at CBRE, commented: "Investors' appetite for real estate acquisition is likely to remain strong in light of the prolonged low interest rate policy. However, lenders remain cautious and rational, focusing on the earnings stability, location and LTV level of individual projects, while also being selective about sponsors."

 

Overview of CBRE Lender Survey 2018

  1. Objectives and scope of survey
    To gather and analyze data to identify the 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 10 July to 3 August 2018
  3. Respondents and response rate
    Targeted companies: 42
    Responding companies: 26
    Response rate: 62%
  4. Main cooperating companies (in random order)
    AXA Real Estate Investment Managers Japan K.K.
    The Bank of Fukuoka, Ltd.
    NEC Capital Solutions Limited
    The Tokyo Star Bank, Limited
    Nippon Life Insurance Company
    MetLife Insurance K.K.
    Mizuho Securities Principal Investment Co., Ltd.
    IBJ Leasing Company, Limited
    Sumitomo Mitsui Trust Bank, Limited
    Diamond Realty Management Inc.
    Sumitomo Mitsui Finance and Leasing Company, Ltd.
    Resona Bank, Limited
    Mitsubishi UFJ Lease & Finance Company Limited
    MUFG Bank, Ltd.
    (And 13 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 real estate
  • 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 real estate
  • 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)

 

The report is available for download at:
https://www.cbre.co.jp/en/research-reports/investment-reports

 

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 2021 revenue). The company has more than 105,000 employees (excluding Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of 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
  • Terms of Use
  • Japan Privacy Policy
  • Global Web Privacy and Cookie Notice
  • Transactions Involving Financial Instruments
  • Basic Company Policy on Dealing with Anti-Social Elements
  • Global Supplier Code of Conduct
  • LinkedIn
  • Twitter
  • Facebook
  • YouTube
  • Instagram