($11.94 billion). The UK kept its top spot as Europe's largest commercial real estate market, but Paris overtook London to become the region's most active investment destination, with the three largest European property deals of the first quarter all taking place in the French capital. Commercial real estate has become a focus for fresh concerns about financial stability, after sharp interest hikes, recession fears and declines in office occupancy and retail footfall following the COVID-19 pandemic heaped pressure on values. A recent JP Morgan investor survey cited commercial real estate as the most likely cause of the next financial crisis.
Some of
the largest banks in the United States have singled out commercial real estate as an area of concern while
European banks have less direct exposure to the sector, according to International Monetary Fund estimates.
"While there are obvious concerns about the availability of real estate finance following the banking turmoil in March, we’ve yet to see a widespread increase in distressed sales," said Tom Leahy, head of EMEA real assets research at MSCI.
Giant asset manager Blackstone saw its first quarter earnings plunge as the commercial real estate slowdown stymied some asset sales. Blackstone has limited withdrawals from its real estate income trust after a surge in redemption requests. ($1 = 0.9048 euros) (Reporting by Elizabeth Howcroft, editing by Sinead Cruise)
