How bank turmoil is impacting APAC commercial real estate credit
Recent bank funding turmoil is likely to lead to tighter lending conditions in commercial real estate markets in the Asia-Pacific region. CRE loans typically attract a higher risk weight than other bank assets, which makes the sector more susceptible to a more marked pullback in lending should banks’ capital adequacy come into question.
What you will learn:
- Recent bank funding turmoil is likely to lead to tighter lending conditions in commercial real estate markets in the Asia-Pacific region. CRE loans typically attract a higher risk weight than other bank assets, which makes the sector more susceptible to a more marked pullback in lending should banks’ capital adequacy come into question.
- Should more credit stress emerge, banks are also likely to be more selective in terms of where they focus their lending. CRE loans, or more broadly, specialised lending, accounts for on average just under 6% of the loan books for some APAC banks, but over 11% of the banks’ risk weighted assets (and by extension, capital adequacy).
- The high participation in commercial real estate debt markets from offshore banks has also clouded the stability of the credit environment. While a more diverse set of lenders is generally a positive, offshore banks bring a different set of risks to the market – historically, offshore banks have been more volatile in expanding and contracting their CRE loan exposure.
Tags:
You may also be interested in

Post
Five reasons why European CRE isn’t out of the woods yet
Our view is that European commercial real estate (CRE) is not out of the woods yet, but things are looking better than before the summer.
Find Out More
Post
Why a US year-end slowdown is still our base case
We still think that the US economy is headed for a slowdown at the turn of the year. Three factors will increasingly weigh on growth: the impact of past rate rises; the drag from fiscal policy; and less resilient household finances.
Find Out More
Post
The Australian hybrid work model looks here to stay with lasting impacts on office space demand
The shift to flexible ways of working and using office space was already underway prior to the pandemic with the advent of open plan offices, activity-based working, hot desking and co-working space.
Find Out More