{"id":5998,"date":"2024-03-29T09:00:38","date_gmt":"2024-03-29T07:00:38","guid":{"rendered":"https:\/\/ch.jfdi.cc\/?p=5998"},"modified":"2024-03-29T09:00:38","modified_gmt":"2024-03-29T07:00:38","slug":"ubs-flags-commercial-real-estate-downturn-as-a-top-risk","status":"publish","type":"post","link":"https:\/\/ch.jfdi.cc\/?p=5998","title":{"rendered":"UBS flags commercial real estate downturn as a top risk"},"content":{"rendered":"<div><img decoding=\"async\" src=\"http:\/\/ch.jfdi.cc\/wp-content\/uploads\/2024\/03\/ubs-flags-commercial-real-estate-downturn-as-a-top-risk.jpg\" class=\"ff-og-image-inserted\"><\/div>\n<p>UBS (UBSG.S) flagged on Thursday the downturn in commercial real estate markets as one of the \u201ctop and emerging risks\u201d facing the Swiss bank, as higher borrowing costs and a post-pandemic slump in demand for office space hit the sector.<\/p>\n<div class=\"cypru-video-ads\" id=\"cypru-2032298879\">\n<div id=\"cypru-950407594\" data-cypru-trackid=\"478051\" data-cypru-trackbid=\"1\" class=\"cypru-target\">\n<div id=\"gpt-ad-9710695091383-0\">\n<\/div>\n<\/div>\n<\/div>\n<p>Commercial property markets in the United States and Europe are in the grip of the biggest slowdown since the 2008-9 crash.<br \/>\n\u201cAdverse effects on valuations from higher interest rates and structural decline in demand for office and retail space may trigger broader impacts given bank and non-bank lenders\u2019 material balance sheet exposure to the sector,\u201d the bank said in its 2023 annual report published on Thursday.<br \/>\nUBS said its risk exposure to the sector across the group increased to $55.09 billion in 2023 from $47.1 billion in 2022, largely due to the acquisition of its rival Credit Suisse. Several other big European banks have larger loan exposures to commercial real estate, official data shows.<br \/>\nUBS defines \u201ctop and emerging risks\u201d as those which have the potential to materialise within one year and could significantly affect the group. Other risks detailed on Thursday included inflation and geopolitics.<br \/>\nCommercial real estate did not feature among the top risks UBS flagged in its last annual report.<br \/>\nThe bank did not give a breakdown to show its exposure to US commercial real estate, a market which has particularly struggled.<br \/>\nValuations have plummeted there, putting pressure on indebted developers and some regional US banks as well as heavily exposed specialist German lenders.<br \/>\nAnalysts have said that the hit to major banks globally of a further downturn should be manageable with a small impact on their earnings.<br \/>\nThe International Monetary Fund said on Thursday that banks needed to be vigilant about real estate risks in Switzerland.<br \/>\n\u201cThe financial sector is resilient with strong buffers, but vulnerabilities from the real estate sector remain,\u201d the IMF said after concluding its review of the Swiss economy.<br \/>\nIn its annual report, UBS said that greater exposure to Swiss commercial real estate had also increased climate-related transition risks.<br \/>\nThat was because Switzerland last year passed the Climate and Innovation Act, which is set to impact energy efficiency rules, the bank said.<br \/>\nLenders are trying to reduce emissions linked to their property lending, a major source of carbon emissions.<br \/>\nSome European bank executives have called on governments to toughen up rules around decarbonising real estate, warning that without that they will struggle to hit climate targets.<br \/>\nUBS said on Thursday it was targeting a 45 per cent reduction in emissions linked to its Swiss residential property book by 2030 and 48 per cent for its commercial business.<br \/>\n($1 = 0.9269 euros)<\/p>\n","protected":false},"excerpt":{"rendered":"<p>UBS flagged the downturn in commercial real estate markets as one of the top and emerging risks facing the Swiss bank, with higher borrowing costs and a post-pandemic slump in demand for office space affecting the sector.<\/p>\n","protected":false},"author":3,"featured_media":5999,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[1902,611,1056,186,4021,4052,2511,3,2369,2190,4053,641,26,1763,358,201,250,3330,697,67,63,899,1401,187,900,34,3331,3775,284,287,1549,4054,335,618,544,380],"class_list":["post-5998","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-other","tag-bank","tag-banks","tag-borrowing-costs","tag-business","tag-carbon-emissions","tag-commercial-real-estate","tag-costs","tag-cyprus","tag-data","tag-decline","tag-downturn","tag-earnings","tag-economy","tag-efficiency","tag-energy","tag-europe","tag-google","tag-google-news","tag-imf","tag-inflation","tag-innovation","tag-interest","tag-interest-rates","tag-international","tag-loan","tag-markets","tag-news","tag-pressure","tag-property","tag-real-estate","tag-real-estate-sector","tag-risk","tag-space","tag-top","tag-united-states","tag-us"],"acf":{"keyphrase":"","keywords":"","sourceimg":"","country-category":""},"yoast_head":"<!-- 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