Real estate lenders remain unphased amid changing preferences

Despite elevated global uncertainty, lender appetite remains unphased although expectations across sector preferences, margin expectations and cash rate movements have shifted in recent months, a new CBRE survey has shown.

CBRE Research’s H1 2026 Lender Sentiment Survey received 44 responses from key commercial real estate lenders across local banks, international banks and non-banks.

The data shows cash rate expectations have shifted over the past six months with economists and lenders divided on the future path of cash rate movements.

Appetite for new loans remains positive despite elevated global uncertainty, with 45% of lenders wanting to grow commercial real estate exposures and only 5% of surveyed lenders intending to decrease their book.

CBRE’s Managing Director of Debt & Structured Finance Andrew McCasker said, “We are seeing a positive appetite for lending to quality assets with a focus on assets with strong existing fundamentals, rather than speculative opportunities.”

Lender investment interest in the Industrial sector has declined by more than 20%, the largest decline and lowest level since this survey began in 2023. This shift is attributed to a re-weighting of preferences rather than a worsening of sector fundamentals.

Meanwhile, interest in stabilised office investment has increased for the first time in three years - up 18%. Interest in hotels and student accommodation sentiment has also increased.

CBRE Debt & Structure Finance Director Will Edwards noted, “The rise in investment in stablised office assets coincides with tightening supply nationally, worsened by rising construction costs. We are also seeing this play out in the decline in build to-sell (BTS) interest. As feasibility pressures rise the scope of investment into the sector is limiting over the short term.”

Elevated construction costs remain the biggest challenge expected across the lending market. However, significant increases in interest rate and geopolitical uncertainty are impacting the current outlook.

Interest rate expectations are divided. Over 75% of lenders expect at least one more rate hike this cycle, with 35% expecting at least two hikes.

Other survey findings include:

· Credit margins expectations are divided. Whilst majority of lenders still expect stability, 34% expect credit margins to increase by at least 10bps, up from just 5% in H2 2025.

· Development feasibility constraints remain a key concern for lenders, however, rising geopolitical and economic uncertainty is impacting the current outlook.

· Just over 50% of lenders expect credit margin stability, down from 80% in November. Approximately 35% of Lenders now expect credit margins to increase by at least 10bps over the next three months.

· When considering refinancing, performance-based variables have risen in importance, as elevated uncertainty shifts the focus towards current performance.

· The combination of elevated interest rates, rising construction cost inflation and uncertainty is set to dampen acquisition and development loan activity over the next 12-months.

· Bank lenders are adopting a more cautious stance towards residential-to-sell construction lending via pre-sale requirements.