The report found that new lending for commercial real estate plummeted by 33% last year to £32bn, while outstanding debt of £170bn is at the lowest level since 2017.
Some 42% of the £170bn of outstanding loans will need to be refinanced within 12 months.
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According to the author of the report and senior research fellow at Bayes Business School, Dr Nicole Lux, the fall in outstanding debt probably stems from lenders not replacing repaid debt with new loans at the same pace.
Dr Lux suggested this may be due to low overall transaction volume in real estate equity markets, in addition to valuation uncertainties and discrepancies in debt transactions.
The report also highlighted all lender groups were affected by the decline in lending appetite.
New lending declined by between 14% (UK banks) and 50% (non-bank lenders).
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