Market Sentiment in Commercial Real Estate Financing Nearly Unchanged
DIFI Report by ZEW and JLL
The German Real Estate Financing Index (DIFI) of ZEW and JLL hardly changed at all in the third quarter of 2019, remaining negative at minus 10.8 points (plus 0.3 points compared to the previous quarter). In particular, financing expectations are deteriorating significantly, no longer able to be offset by a slightly positive assessment of the financing situation. The main reason for this is the persistently poor assessment of the situation of stationary retail.
Concerning the development of the various refinancing instruments, the experts surveyed rated mortgage bonds and real estate shares significantly better. The latter benefit from the persistently low key interest rate but could quickly lose their attractiveness again as a result of the ongoing debate about rent caps. These are the key findings of the DIFI Report, a quarterly survey on the commercial real estate financing market in Germany carried out by ZEW in cooperation with JLL.
The German Real Estate Finance Index (DIFI)
The German Real Estate Finance Index (DIFI) reflects survey participants’ assessment of the current situation (including the previous six months) of and expectations (for the coming six months) for the commercial real estate financing market. It is conducted on a quarterly basis and calculated as the average value of the balances between the following segments: office, retail, logistics, residential properties and hotels. The balance for each segment is the difference between the percentage of participants who are optimistic and the percentage of participants who are pessimistic about the current state and future development of financing conditions in the German real estate market. The DIFI is a survey conducted and published by Jones Lang LaSalle (JLL) and the ZEW – Leibniz Centre for European Economic Research. 30 experts participated in the May/June 2019 survey.
