The signs are becoming increasingly clear: in many European markets, office properties, project developments and refinancing-related portfolios are coming under increasing pressure. While official figures still suggest stability, the reality paints a different picture: many loans appear solid, but only until you take a closer look.
Our latest Drooms webinar, “Opportunities in Distress: Investing in NPL Portfolios”, sheds light on these dynamics: why risks are shifting more heavily to balance sheets, how “zombie loans” arise and which markets are already facing a new phase of consolidation.
The discussion brought together expertise from transactions, workout, law and due diligence: Antje Mertig (Steinberg Management), Jan Düdden (ASCIDA), José María Gil-Robles (DLA Piper Spain) and Alexandre Grellier (Drooms). The webinar was moderated by Jasper Radü (PB3C).
The webinar is based on our latest whitepaper, “The NPL Real Estate Market in 2025”, which analyses the latest EBA data and market developments in Europe.
Between statistics and reality
According to the European Banking Authority (EBA), the NPL volume in the EU in 2024 was around €357 billion, representing a ratio of 1.93%. However, the experts in the webinar agreed that this figure masks developments that make the situation in many markets appear much more tense.
The most important observations from the webinar:
- Official NPL figures underestimate the actual risk. The “grey market” of private credit, whole loans and mezzanine financing does not appear in any statistics – but is now crucial to the overall picture, especially in Germany.
- Southern Europe is further along in the cycle – Germany is only at the beginning. Spain and Italy have sold massive NPL portfolios since the financial crisis. In Germany, on the other hand, many risks are concealed by prolongations instead of being actively removed from the balance sheets.
- Project developments are the most severely affected. Many projects have no cash flow, are suffering from increased construction costs and can no longer be presented as economically viable based on old assumptions.
- Office properties are coming under additional pressure from ESG and rental risks. Older buildings with significant capex requirements are rapidly losing value – especially when leases expire and ESG requirements are not met.
What does this mean for investors?
For investors, it’s clear that without precise valuations, complete documentation and a reliable database, it’s almost impossible to realistically assess risks, timing and workout strategies.
If you would like to understand the market mechanisms, pitfalls and opportunities in detail, you can watch the full discussion here:
