Pan-European deals are expected to be a major growth driver for CMBS volumes this year. However, critics argue that there is still much in the way of developing a true Pan-European market that looks across more than the handful of jurisdictions included in the deals seen to date.
According to Moody's Investors Service, in 2006, CMBS and multifamily issuance in Europe, the Middle East and Africa (EMEA) increased by 60.3%, compared to 2005. The rating agency expects the market to grow further this year, reaching approximately 85 billion ($114 billion) by year-end 2007. However, the agency noted that further rises in interest rates both in the U.K. and in the euro zone could have a dampening effect on CMBS and multifamily issuance growth potential and said a solution to this effect could be adding CMBS from other countries, which has not been that uncommon for the handful of jurisdictions that have thus far clicked together. Looking beyond the French, German and Netherland borders presents an altogether different heap of barriers that are slowly being addressed.