Development finance is available. The lender mix is changing.
More European lenders say they are willing to fund development in 2026. That is encouraging, but the headline does not mean every lender wants the same sector, stage, leverage or ticket.
The headline is encouraging
CBRE's 2026 European lender survey points to broader development appetite. Sixty-nine per cent of respondents said they were willing to underwrite development loans, compared with 60% in the previous year's survey. The same research captured approximately €70bn of expected origination from 134 lenders.
For developers, this suggests that the financing market is more open than it was during the sharpest part of the rate and valuation reset. It does not mean that development debt has become uniform or easy to access.
The provider mix matters
Bank capacity is only part of the market. PGIM's 2026 outlook highlights a long-term decline in bank participation in development lending and a larger role for private credit funds and other non-bank providers. Regulatory capital and risk constraints continue to shape what banks can offer, particularly where construction, leasing or planning risk remains.
Alternative lenders may accept complexity that does not fit a bank's credit box, but that flexibility can come with different pricing, leverage, control rights and information requirements. A developer comparing headline margins without comparing the whole structure may be comparing the wrong offers.
Appetite is not the same as project fit
A positive market survey cannot answer whether a particular provider will finance one live project. The practical questions remain specific:
- Is the lender comfortable with the sector and location?
- Will it fund the project before planning, pre-letting or a minimum equity contribution?
- Does the requested ticket fit the lender's current deployment needs?
- Is the lender offering senior debt, a whole loan, stretch senior or another structure?
- How does it treat cost overruns, interest reserves, covenants and sponsor support?
What developers should do
Run a wider first pass than the relationship bank list, but divide that market into credible routes. A bank process, a debt-fund process and a structured-capital process may solve the same funding gap in very different ways. The right comparison is not simply cheapest to most expensive. It is certainty, flexibility, total cost and fit with the business plan.
It is also worth preparing the evidence that reduces perceived risk before outreach: planning status, construction procurement, cost contingency, pre-letting or sales progress, sponsor track record and the equity already committed.
The practical takeaway: development finance looks more available in 2026, but the stronger market rewards precise targeting. More appetite should widen the credible lender set, not justify a longer generic list.
Sources and scope
This briefing interprets published market research. Survey appetite and historical market share are not current mandates. A live requirement still needs provider-specific checking.