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The total volume of outstanding UK Commercial Real Estate (CRE) debt reached £247bn at the end of 2007, comprising outstanding debt on bank balance sheets and the value of outstanding commercial mortgage-backed securitisations (CMBS).
The total disclosed problem loan portfolios of Lloyds and RBS that were provisionally designated for the Treasury’s Asset Protection Scheme were £300bn.
Since 2007, CRE lenders were said to have had an increasing number of non-performing or defaulted loans in their portfolio against office, retail and leisure property assets in the UK and Europe. £43bn of loans against commercial property matured in 2009 with another £10bn in 2010.
We believed that none of this debt could be ‘refinanced’, and that there would be a flood of defaulted assets rushed into the market by banks such as RBS desperate to clean up their books....and yet, far from their slogan of ‘Make it Happen’, it ‘Didn’t Happen’.