Commercial Mortgage-Backed Securities
European CMBS is in its second strong year running. After a record €8.7 bn across 17 transactions in 2025, issuance reached €8.5 bn by the end of September 2026, and the outstanding securitised CRE loan balance stands at €24.3 bn — up 20% since the end of 2025. The refinancing wall that dominated 2023–2025 has largely been worked through; data centres have become the third-largest collateral type.
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What CMBS is
A CMBS is a securitisation in which one or more commercial real-estate loans — single-loan, pan-European pool or conduit — are transferred into an SPV that issues rated, tranched notes to institutional investors. The originator keeps 5% vertical or horizontal risk retention under the EU / UK Securitisation Regulation; the rest moves off balance sheet. Servicing is performed by a specialist master / special servicer, with control-valuation events and cash-trap mechanics driving post-issuance governance.
Market snapshot 2026
Volume. At the start of the year the market expected 15 to 20 transactions and roughly €9–10 bn for 2026; with the fourth quarter still to come, that range will be reached or exceeded. Industrial and logistics remain the backbone, with €4.1 bn of this year’s issuance. The year opened with Blackstone’s Sirius Logistics 2026-1 (124 Mileway last-mile warehouses in the UK), upsized from £375 m to £500 m and priced on 22 January 2026 at a weighted-average margin of 154 bp, against a £804 m loan at 60% LTV.
Pricing. Margins have stopped tightening rather than started widening. The trailing 12-month weighted-average note margin (WANM) stood at 1.54% over SONIA and 1.90% over Euribor in September 2026, against 2.04% and 1.93% at the start of the year and 2.72% and 2.38% at the 2023 wides. Recent prints span a wide range: UK Logistics 2026-4 (140 UK industrial and logistics properties) at 1.87%, Fenix Finance (eight industrial assets in Germany, Poland and Spain) at 2.63%. Sterling deals continue to price tighter than euro deals.
Concentration. The market remains narrow. Blackstone sponsored around 72% of European and 79% of UK issuance in 2025; Deutsche Bank, Goldman Sachs, Morgan Stanley, Bank of America, Citi and Wells Fargo lead most of the arranging. Other sponsors include Starwood, EQT, Brookfield, GoldenTree and Hines. A volume record built on one sponsor’s programme is a less robust signal of market depth than the headline numbers suggest.
Refinancing and loan performance
2026 maturities resolved. All 13 securitised loans maturing in 2026 (€4.57 bn) have been dealt with: eight repaid, two were modified, one extended and two defaulted. Of the two defaults, the Sirocco loan in BERG Finance 2021 subsequently repaid in full; the senior loan in River Green Finance 2020 (River Ouest office campus in Bezons, just north of La Défense; LTV above 130%) defaulted in April 2026 despite an unused extension option and is being renegotiated. Two well-let office loans (Magritte CMBS, Vita Scientia 2022-1) prepaid early — evidence that office refinancing works where vacancy is low and debt yield is close to 10%.
The remaining wall is small — and almost entirely office. Taking available extension options into account, only €3.3 bn falls due over the next three years (about €850 m in 2027, €425 m in 2028 and €2.1 bn in 2029). Office accounts for €1.9 bn, or 58%, of that amount — and 90% of those office loans have already been extended or modified at least once. The low figure is therefore partly the product of earlier extensions: the risk has been deferred as much as reduced.
Metrics improving across sectors. Since December 2025, 49% of outstanding loans have improved on both LTV and debt yield, and a further 46% on one of the two. Only two loans deteriorated on both: an office loan in special servicing with persistent vacancy, and a data-centre loan whose liabilities rose through a variable funding note.
Six years on, the debt yield stands at around 13.9% — higher than at closing — but the LTV has risen above 130%, implying a fall in value of more than half. Income held; value did not. A dominant tenant whose own balance sheet had to be restructured (Atos completed an accelerated safeguard plan in December 2024), the departure of the other tenants, a shortening lease and a location without a deep investor market for a campus of that size made the asset unrefinanceable on its income alone. The loan defaulted in April 2026 although, after earlier amendments, an extension option was still available; the borrower is seeking a modification.
Take-aways. In single-tenant or near-single-tenant loans, the tenant’s credit and the remaining lease term drive value more than the debt yield does — covenants and cash traps keyed only to LTV and debt yield react too late. A long tail between expected and final note maturity (here seven years) is what gives the special servicer room to work the loan out rather than sell into a weak market.
Figures in this section and the market snapshot: Scope Ratings, European CRE/CMBS: data centres take centre stage, 1 October 2026, and European CRE/CMBS outlook, 7 January 2026; pricing of Sirius Logistics 2026-1: CoStar; River Green: offering circular of River Green Finance 2020 DAC dated 4 February 2020 (Euronext Dublin) and Atos press release of 19 December 2024.
Why CMBS is back
Three forces have re-opened the European CMBS window:
Pricing arbitrage. Post-2023 spread compression in AAA / AA tranches, combined with bank RWA cost under CRR3, makes securitised distribution economic again.
Investor appetite. ABS / RMBS accounts (e.g., Aegon AM, Bracebridge, Cheyne) have CRE allocations that they were unable to deploy in 2021–2023. The rebuilding of dedicated CRE ABS desks follows — and, with data centres, a new buyer base of corporate-bond investors is starting to look at the asset class.
Balance-sheet necessity. The large CRE refinancings coming through 2025–2027 cannot all be held on bank balance sheets under CRR3. CMBS is the distribution end of the stack; see Regulatory. The growing role of private credit in CRE lending feeds the same channel: debt funds that originate loans increasingly use CMBS (and back leverage) to recycle capital.
Data centres: the new collateral class
From niche to third place in three years. Data-centre transactions were largely absent from European securitisation until 2024. In 2026 three deals totalling €1.6 bn — close to 20% of new issuance — have made data centres the third-largest collateral type by outstanding balance, behind industrial and office. Scope expects further issuance in Q4 2026 that could take the sector past office. Installed European capacity is projected to roughly double from 12 GW at the end of 2025 to about 25 GW by 2030.
ABS or CMBS — the label matters. The market uses both labels, and counts differ accordingly. Data-centre ABS typically finances a diversified, growing portfolio through a master-trust structure with an anticipated repayment date (ARD); data-centre CMBS finances an individual asset, campus or discrete portfolio against a balloon maturity, leaving investors more exposed to refinancing and valuation at maturity (Structured Finance Association, July 2026). Vantage’s UK and German deals and EdgeConneX (March 2026) sit closer to the ABS model; Equinix’s £280 m transaction backed by two leased data centres in Slough — A3/A, fixed rate, priced at 130 bp over gilts with a September 2031 maturity and marketed to European corporate-bond investors rather than ABS accounts — is described by its counsel as only the second European CMBS backed by data centres.
The credit question: obsolescence against scarcity. A data centre’s value depends on power capacity, cooling, connectivity and rack density, not only on bricks and leases; AI workloads raise those requirements sharply. Facilities that cannot keep up may lose competitiveness long before the end of their physical life. Against that, planning restrictions, grid-connection limits and moratoria in Amsterdam, Dublin, London and parts of France constrain new supply and support the value of existing operational assets. Scope models additional capex after the ARD for power, cooling and equipment upgrades, but softens vacancy and refinancing stresses where supply is constrained.
Tenant mix. Hyperscalers bring long leases (average remaining term above eight years) at lower rents; colocation customers bring short leases at higher rents. In the Vantage UK 2024-1 portfolio, smaller customers (below 200 kW contracted, about 80% of 60 tenants) paid around £170 per kW against about £80 for hyperscalers, with remaining lease terms of only 1.3 to 1.8 years — yet contracted capacity barely moved in two years.
What follows for the documentation. In our view, the asset-specific risks translate into a short list of terms that deserve more attention than in a conventional CRE loan: capex and technology-refresh reserves sized to the post-ARD period rather than to physical life; the grid-connection and power-supply contracts as part of the security package, with step-in rights where they can be assigned; hyperscaler concentration tests and cash-trap triggers tied to non-renewal notices rather than only to vacancy; and valuation provisions that require the valuer to address technical specification, not only income.
Legal and structural themes for practitioners
Risk retention and STS. CMBS remains generally outside the EU STS regime; retention is usually by the originator, occasionally by a third-party sponsor (original-lender route). The interaction with the CRR3 output floor — whether retained tranches are treated in line with the standardised or IRB calculation — is a live topic for 2026 pipeline transactions. The capital calibration under discussion in Securitisation Regulation 2.0 matters more to CMBS than the process relief: for non-STS positions, the proposed changes to the p-factor do not help.
Extensions and modifications. With most remaining office maturities already extended or modified once, the second round of amendments is where the disputes sit: noteholder consent thresholds, the servicer’s discretion to extend without a noteholder vote, and the interaction between a loan-level extension and the note maturity (tail period) of the CMBS.
Operating-advisor / controlling-class mechanics. Control-valuation events, appraisal reductions and B-piece transfer restrictions drive most post-closing disputes. The European market has largely aligned on U.S.-style controlling-class mechanics, but national insolvency overlays remain decisive.
Servicing standard. The U.S. “servicing standard” has largely been imported into EU deals; enforcement regimes (Germany, Spain, Italy, the Netherlands) remain materially different, shaping expected recovery timelines and the pricing of the B-piece.
ESG / Article 9 overlays. Green-labelled CMBS tranches are increasingly demanded by EU institutional buyers; CRR3 does not yet formally reward them, but SFDR reporting expectations and Taxonomy alignment are tightening — for data centres, energy and water efficiency are becoming part of the credit as well as the ESG story. See Regulatory · Taxonomy.
Last reviewed: 2 October 2026. Data sources: Resources. Short definitions of the technical terms used on this page: Glossary.