Real Estate Funding Model in Danger as ECB’s Easy Money Era Ends

Rising interest rates and the end of easy money are causing pain for vast swathes of the economy, but for the European real estate sector the drying up of central bank largesse threatens an entire way of doing business.

An index of real-estate bonds has lost more than 17% since the start of the year, the worst performing sector in the region’s high-rated debt market. The losses stand out even amid a wide selloff in corporate bonds, with an 11% drop in the broader index.

The historic pummeling sent European debt issuance off a cliff in recent months after an ...