According to CBRE, Europe is developing a sustained need for additional equity capital in development projects originated in the early 2020s. The core reason is the gap between current asset values and the debt burden due for refinancing across 2025–2027. That gap is not narrowing — it is widening as rising construction costs, longer development timelines, and reduced asset valuations compound against tighter lender thresholds.

LTV compression

Banks are resetting lending parameters. The average LTV on new and extended loans is falling from 70–75% to 50–55%. The difference between old and new parameters creates a structural funding gap: the additional equity needed to achieve refinancing or to bring a project to completion. Economically sound projects cannot progress without fresh capital.

The vulnerable segments

Data points to concentrated exposure in specific asset types:

  • Residential and mixed-use projects in Germany, the Netherlands and Austria.
  • Large-scale district developments with significant infrastructure components.
  • Projects with high ESG requirements, where upgraded specifications have inflated initial budgets.
  • Assets originated at maximum leverage in the prior cycle.

In each category, the gap between available debt and actual project value materialises fastest.

The rise of private capital

Traditional bank lending will not return to prior volumes at the scale needed to cover the market gap. Private capital providers — specialist equity funds, family office structures, and independent equity partners — are stepping into the role.

The reason the model works is a combination of flexibility and willingness. Private capital can cover 20% to 40% of the missing equity. It can participate through direct equity, joint SPVs, or hybrid structures. It can assume risks that regulated banks cannot carry on balance sheet. And it can ensure continuity — keeping construction moving and delivery on schedule.

This is the model M24 operates. The positioning is simple: where senior debt alone no longer capitalises a ready-to-build European project, disciplined equity fills the gap, takes the early-stage risk, and preserves the economics for both developer and lender through to exit.