Real estate market: sources for debt financing in Europe in 2024

Alternative lending platforms and debt funds are expected to grow as sources of debt funding for real estate investments (financing and refinancing) in Europe in 2024. Debt financing takes place when the company strives to raise its working capital. In order to achieve that, it sells bonds, bills, or notes to either institutional or individual investors. In that way, investors become the creditors of the company and they can expect repayments of the debt plus interest. Debt investments are backed by a hard asset as collateral. Another way of raising capital is equity financing, in which case the company goes through the initial public offering of its stock on the stock exchange; in this case, investments are based on the estimated future performance of the company. As survey data showed, approximately 57 percent of industry experts expected an increase in debt funding for real estate investments to come from alternative lending platforms in 2024. Similarly, 44 percent of experts expected an increase in debt financing from non-bank institutions.