Australian Lenders Sentiment Survey Q4 2022

Which sectors do lenders favour?  Do they want to grow their book?  What's happening with credit margins and hedging strategy?  CBRE Research and Debt and Structured Finance team conducted our second quarterly survey of Australian commercial real estate lenders. We had 43 participants from local banks, international banks and non-banks. Their feedback is

• Good appetite to lend, with 44% expressing desire to grow the book, a slight increase on the previous survey.  This theme is very evident among non-banks.
• Domestic Banks show a strong preference for Industrial, Office – stabilised and Retail.
• Non-Banks are keen to grow their Residential to sell and Office re-positioning portfolio
• For bulk of new developments, there is a requirement to achieve over 50% pre-lease
• There is consensus around “early 3% BBSW” for Dec 2022, but sizable divergence of expectations for Dec 2023.  Rate expectations have increased by c50bps since our last survey.
• Over 40% of the lenders expect margins to increase by over 20bps.