Tuesday, 14 April 2026
Sentiment among commercial real estate lenders in Germany remained subdued in the first quarter of 2026, even as some underlying indicators showed modest improvement, according to the latest BF.Quartalsbarometer compiled with the Handelsblatt Research Institute.
The index, which tracks financing conditions and lender activity, registered a negative reading of -9.74 points, indicating continued caution in the market. While a majority of respondents reported stable conditions over the past three months, more participants observed a deterioration than an improvement, suggesting that overall confidence remains limited.
The survey, conducted in mid-March, captured early reactions to geopolitical tensions, including the conflict involving Iran. Market participants noted that uncertainty around the broader economic environment continues to weigh on financing decisions, particularly given the risk of renewed volatility in interest rates.
Lending activity itself showed mixed signals. Most respondents indicated that new business volumes had remained unchanged compared to the previous quarter, while just over a quarter reported an increase. At the same time, competition among lenders appears to be gradually strengthening, with some participants noting increased pressure in the market.
Demand for alternative sources of financing has also grown. More than 40 percent of respondents observed higher interest in non-bank funding options, with private equity structures, including joint venture capital, among the most frequently cited.
In contrast, the share of non-performing loans showed signs of stabilisation or improvement. Around one-third of respondents reported a decline in problematic loans, while fewer noted an increase. This suggests some easing in credit quality concerns, although the overall level remains a point of attention for lenders.
Pricing continues to vary significantly depending on asset type and risk profile. For existing properties, average lending margins were reported at 169 basis points, with lower pricing typically associated with residential assets and higher levels seen in the office segment. Loan-to-value ratios averaged just over 63 percent.
Financing for development projects remains more expensive, reflecting higher risk. Average margins in this segment reached 262 basis points, with a wide range depending on the type of project. Residential developments carried the highest average pricing, while logistics projects were generally financed at lower margins. Loan-to-cost ratios stood at just over 71 percent.
The BF.Quartalsbarometer is based on a quarterly survey of lending professionals responsible for real estate financing decisions across a range of institutions. It provides an overview of market sentiment, lending conditions and competitive dynamics within Germany’s property finance sector.
Overall, the latest results point to a market that remains cautious but functional, with stable lending activity and some signs of improving credit quality, set against a backdrop of ongoing economic and geopolitical uncertainty.
