Tuesday, 15 September 2026
European commercial real estate lenders are preparing to increase financing activity in 2026, with improving access to debt supporting a gradual recovery in property investment despite higher borrowing costs and continued geopolitical uncertainty. CBRE’s latest European lender survey, covering 134 institutions with approximately €70 billion of expected loan origination, found that 72% intend to increase lending volumes this year compared with 2025. Only 7% expect to reduce activity, indicating that banks and alternative lenders have substantial capacity to provide property debt.
The improving availability of finance comes despite a more difficult interest-rate environment during the first half of the year. Higher swap rates increased the overall cost of borrowing, but competition between lenders helped prevent a significant widening of margins. CBRE expects financing conditions to become somewhat more supportive during the second half of 2026 if pressure on interest rates moderates.
Offices have recorded one of the clearest changes in lender sentiment. The sector has risen from sixth position among preferred property types last year to third in 2026, behind living and industrial assets. Financing conditions for stronger office properties have also improved, with CBRE reporting higher median loan-to-value ratios and narrower margins for prime buildings.
Independent market evidence points in the same direction. Cushman & Wakefield reports that European office investment reached approximately €22 billion during the first half of 2026. More lenders are competing to finance office acquisitions, while debt of up to around 60% of property value is beginning to reappear for stronger investment opportunities.
The recovery remains concentrated on better-quality buildings rather than representing a return of financing across the entire office market. Grade A properties accounted for 51% of European office leasing during the first half, while vacancy for this category stood at only 3.3%. At the same time, the development pipeline contracted by 19% year-on-year to 8.4 million sqm, reinforcing competition for modern space in several major cities.
Development financing is also becoming more accessible. Around 69% of lenders surveyed by CBRE are prepared to provide loans for development projects this year, up from 60% in 2025. Projects with occupiers already secured remain easier to finance, although 43% of lenders are also willing to consider speculative schemes.
Lending strategies are broadening beyond traditional commercial property. Some 86% of respondents indicated a willingness to finance alternative real estate, including healthcare, affordable housing and co-living. This expansion reflects growing institutional interest in sectors supported by demographic change and longer-term demand trends.
Refinancing nevertheless remains a major driver of activity. Many property owners are replacing loans arranged when interest rates and valuations were substantially different, requiring debt structures to be adjusted to current market conditions. CBRE identifies refinancing as the principal source of loan demand, while Cushman & Wakefield also sees debt playing an important role in refinancing and recapitalisation across Europe.
Greater liquidity does not mean lenders have become less selective. Geopolitical uncertainty was identified as the main concern by 74% of CBRE survey respondents, compared with 69% last year. The future direction of interest rates was cited by 47%, while construction costs were another significant consideration.
Environmental performance is also increasingly influencing whether properties can obtain debt and how much that financing costs. Two-thirds of lenders surveyed by CBRE said they would not finance a building that failed their sustainability requirements unless there was a credible programme for improving its performance. More recent CBRE research indicates that sustainability considerations have become part of lending decisions for a large majority of European lenders.
The result is a European financing market with more capital available but greater differentiation between properties. Modern offices with strong occupier demand and competitive environmental performance are benefiting from improving lender appetite, while older or weaker assets can face higher financing costs and more demanding loan conditions.
For investors and developers, the change represents an important improvement from the more constrained financing environment of recent years. Debt is becoming less of an obstacle to transactions and development, but access to the strongest financing terms increasingly depends on property quality, sustainable income and the ability of an asset to remain competitive over the duration of the loan.
The return of offices to lenders’ preferred sectors is particularly significant. Combined with greater appetite for development finance and alternative property types, it suggests that the European debt market is moving into a broader but still selective recovery, with lenders increasingly prepared to deploy capital where underlying property fundamentals support the risk.
