US real estate investors might have to wait until 2011 at the earliest before significant real estate repricing takes full effect, according to global placement agency CP Eaton Partners.
In its 2009 Global Fundraising Outlook report published this week, the firm said the US real estate market was suffering from a lack of sellers willing to acknowledge the need to reprice assets. “Sellers will not acknowledge this asset re-pricing until they are forced to re-finance loans, the bulk of which have lenient covenants and do not mature until 2011-2012,” it says.
The report states Europe would attract capital flows from the US and Middle Eastern investors seeking geographical diversification. “Key western European markets such as the UK, which is well ahead of the US with regards to repricing, offer tremendous value for fund investors who are well capitalised and can obtain the appropriate matched term financing to pursue deals in this environment.” It says.
CP Eaton also says European corporate restructurings have led to more sale and leaseback deals, recapitalisations and other kinds of exits. “Corporates need to raise cash to reduce debt levels, support tier one capital ratios and strive to maintain investment grade ratings.”
Looking ahead at Asia, CP Eaton said: “While Asia is not immune to the global financial slowdown, the region is well positioned for a quick and sustained recovery.”
“GP’s (in Asia) are seeing highly attractive valuations, making 2009-2011 very exiting vintage years.”