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Real Estate Finance Asset Classes

Asset Classes

Lenders remain, as they were well before COVID-19, very cautious on retail financing as a whole. Securing new financing for trading assets, in particular hospitality and leisure, is also likely to be very challenging. That said, some asset classes are bucking the trend. A good example are data centres and we have just seen ICG Longbow close a £25m loan to Proximity Data Centres. Similarly residential investment and development assets are likely to be seen as long term assets for which demand will continue post COVID-19, due to the well-known supply demand imbalance.

However, any borrower looking to secure a development facility will need to factor in a longer time frame to reflect lender concerns about potential supply chain disruption and resourcing issues, particularly if there are any formal government restrictions on worksites. A construction project which pre-COVID-19 might have taken 12 months may well require 16 to 18 months to complete, and lenders will want to ensure their borrower clients have sufficient flexibility on timing and lead time to deliver the project.