Landlords of commercial properties in Europe are under pressure to repay mortgages as banks withdraw from refinancing the loans, according to Moody’s Investors Service.
The report showed that 79 percent of the loans packaged into commercial mortgage-backed securities rated by Moody’s that came due in the first quarter weren’t repaid on time.
The non-payment rate more than doubled from 35 percent in 2009 and reflects “the current weak state of the lending market,” Oliver Moldenhauer wrote in a report.
The economic slowdown is hurting landlords of properties from office blocks to car parks and shopping malls across Europe. A total of 38 billion euros ($47 billion) of commercial real estate loans come due this year and next, Moody’s said.
“As banks need to deleverage due to regulatory requirements, commercial real estate financing will remain constrained,” Moldenhauer wrote. “Most loans will not be repaid.”
