An early warning to investors of more macroeconomic uncertainty to come.
In its latest monthly update to investors, Nordic property lending platform EstateGuru has warned that the war in Ukraine is already being felt by its borrowers.
While EstateGuru funded €17.3m worth of loans during February, it also flagged concerns that “repayments could become more volatile in the upcoming months” due to the fallout from Ukraine.
“Inflation is rising due to higher energy prices and supply shortage of commodities and construction materials from Ukraine, Russia and Belarus,” the company wrote on its blog.
“Our borrowers, who are mostly real estate developers and construction companies, are already feeling the effects of this new reality – prices of steel and wood products have increased and there are longer waiting times as new supply chains are being established.”
EstateGuru predicts that demand for loans will remain strong, largely due to it financing mainly residential developments which may see sales prices increases that the market can absorb.
“Real estate is, and will remain, one of the safest asset classes. We are monitoring the markets and adjusting our credit policy if the situation should change.”
The platform clarified that none of its borrowers are subject to any of the sanctions imposed on Russia and Belarus, and all of its investors’ collaterals are held in EU and/or NATO countries.
It also reassured investors that its credit policy had always been "conservative" and that "even a real estate market decline of nearly 45 per cent wouldn’t, on average, jeopardize our investors’ principal capital."
Earlier this month EstateGuru finally launched in the UK, its ninth market in Europe and part of CEO and co-founder Marek Pärtel’s plan to become the biggest real estate financing and investment platform in Europe by 2025.
Since being founded in 2013 EstateGuru has now arranged over €500m in loans to over 3,000 property development projects across its markets including Finland, Spain, Portugal, Estonia and Germany.