Source: The Business Times —
BRUISED by Covid, war and interest rate hikes, real estate investors at the Mipim conference in Cannes last week had a new topic on their minds: the alarming plunge of Credit Suisse, which threatened to bring a US bank meltdown to their doorsteps.
More than 23,000 investors, brokers, bankers and assorted hangers-on flocked to the French Rivera for the annual real estate conference last week, hopping between sponsored yachts and hotel suites and intending to pick over the few deals currently being shopped around. Instead, they spent the first few days nervously glancing at headlines on their phones, trading updates on the latest bank to wobble. Attendees at a reception hosted by Goldman Sachs Group on Wednesday (Mar 15) could talk of little else.
“I would say with Credit Suisse, most institutions in Europe have a relationship and therefore everyone who is down here is impacted,” said Torsten Hollstein, managing director at CR Investment Management, which recently pivoted to focus on non-performing real estate loans.
“I have heard from a few bankers who are here – their headquarters have been on the phone, they are reviewing their liquidity positions and that’s all liquidity which will be missing in the real estate debt market,” he added.
The latest bout of volatility was unleashed by the collapse of Silicon Valley Bank, which triggered a drop in stocks and encouraged depositors at several regional lenders to move their money to larger banks. Some of those banks have been significant lenders to real estate, raising concerns about the availability of debt.
“No one in the real estate industry had heard of SVB before Friday,” said Isabelle Scemama, global head of AXA IM Alts, the largest real estate investment manager in Europe. “It is always the swans you don’t expect.”
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