Dr. Markus Faulhaber and Eugenio Sangermano from BF.capital discuss the risks and opportunities in the private debt market. Despite criticism from the media, they plead for a differentiated view of the asset class.
The ECB is leaving interest rates stable despite global uncertainties. For the real estate industry, the effects remain limited, but persistent inflationary pressure could make financing more expensive. Borrowers should now strategically examine interest rate hedging.
BF.capital has awarded the first BF. Private Debt Market Compass, which signals positive momentum in the private debt market. The new sentiment index reached 60.1 points and indicates strong fundraising momentum as well as increasing capital commitments.
Sentiment among commercial real estate financiers will remain almost unchanged in the fourth quarter of 2025. The BF. Quarterly barometer shows a slight recovery, while new business is increasing and financing in the residential sector dominates.
Loan volumes in commercial real estate financing have become smaller in the last ten years. Almost half of those surveyed state that the average loan volume is less than 10 million euros.
The ECB's decision to leave key interest rates unchanged is understandable and correct. Although the inflation rate in the eurozone is approaching the two percent target, price pressures remain in the service sector and in parts of the consumer sector.
Loan-to-values (LTVs) in commercial real estate financing have fallen by around ten percentage points over the past ten years. This was the result of a special evaluation by the BF. Quarterly Barometer. The loan-to-value ratio sets the loan amount in relation to the market value.
The ECB's decision to leave key interest rates unchanged is understandable and correct. Despite the poor economic situation, there is still a risk that inflation will rise again.
The main reason is better refinancing conditions. New business is increasing, but less strongly than in Q2. Banks are financing on a larger scale again. Falling margins as a sign of increasing competition.
After 100 days of the new federal government, I see bright and dark sides for the real estate industry. It started with great promises for more economic growth.
It will be exciting to see how the ECB will decide at the next interest rate date in September. At least one more interest rate cut this year has already been priced in on the financial markets.
