Hayfin’s Carlos Colomer sees Europe refinancing gap as credit opening
Colomer says fund-lifecycle pressure is pushing managers toward disposals and recapitalisations at rebased valuations rather than distressed sales.
At a glance
Carlos Colomer, head of real estate at Hayfin Capital Management, writes that higher rates, scarce capital and supply-side pressure have reset European property valuations and opened a broad opportunity set for credit investors.
Fund-lifecycle pressure and extended hold periods are pushing traditional managers toward disposals, recapitalisations or alternative financing to generate distributions or address maturities.
The best risk-adjusted reward, he says, is in core and core-plus: stabilised, income-producing properties where most of the return is contractual cash flow rather than a property-value recovery or an operationally intensive business plan.
Carlos Colomer, head of real estate at Hayfin Capital Management, writes that higher rates, scarce capital and supply-side pressure have reset European property valuations and opened a broad opportunity set for credit investors.
A substantial volume of debt originated before 2022 must now be refinanced under very different conditions. Bank retrenchment and regulatory change have reduced available capital, especially for development and higher loan-to-value structures.
Fund-lifecycle pressure and extended hold periods are pushing traditional managers toward disposals, recapitalisations or alternative financing to generate distributions or address maturities. In his view, that gives credit buyers access to high-quality assets at rebased valuations and attractive yields without depending on yield compression or an operational fix.
Replacement costs have risen sharply because of construction cost inflation and higher financing rates. New development has become uneconomic across much of the market, and longer permitting timelines and regulatory requirements have constrained new supply. He says prices are stabilising while capital remains scarce.
The best risk-adjusted reward, he says, is in core and core-plus: stabilised, income-producing properties where most of the return is contractual cash flow rather than a property-value recovery or an operationally intensive business plan.
The seller is under fund pressure, not default
Colomer describes the counterparty as a manager working through hold periods and distribution obligations, not a borrower in default. That implies demand for recapitalisations, structured extensions and rescue financing rather than a wave of discounted asset sales.
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