Deutsche Pfandbriefbank executives Duncan Pearson and Charles Balch argue that banks and alternative lenders are moving beyond competition toward collaboration in Europe's property market. Their Originate and Cooperate program exemplifies this shift, aiming to create more sustainable capital structures and lower financing costs for borrowers.

Banks still dominate European real estate lending, but alternative lenders have captured growing market share in recent years. Pearson explains that this cooperation allows both banks and debt funds to access wider business opportunities while serving diverse borrower needs. The evolving relationship represents a fundamental change in how capital flows through the market.

The lending environment has fundamentally changed, Balch notes, requiring banks to reposition their balance sheets for the new cycle. While 2026 won't be a banner year and financing remains costly for transitional projects, liquidity is returning to European real estate markets. This improved liquidity signals better prospects for transaction activity ahead.