UBS's emergency takeover of fellow Swiss banking giant Credit Suisse over the weekend has created one of the world's largest commercial real estate lenders and asset managers, and a series of immediate questions about the impact on the banking and property sectors.

An 11th hour-deal for UBS to buy Credit Suisse was agreed at the weekend ahead of financial markets re-opening, valuing the bank at $3.15 billion (£2.6 billion), way below Friday's $8 billion valuation.

UBS said in a statement that the move creates a joint global bank with more than $5 trillion in total invested assets. The combined global wealth manager part of the business will have $3.4 trillion in invested assets, while as a European wealth manager it will have more than $1.5 trillion.

Credit Suisse said in a statement that UBS has "expressed its confidence that the employment of the staff of Credit Suisse will be continued". A staff memo reported by Sky News said: "If redundancies prove necessary, we will communicate in line with prevailing country-specific guidelines and practices and with our applicable social partners."

The two firms together employ about 120,000 staff worldwide, of which about 11,000 are based in London.

But can the transaction steady turbulent financial markets and prevent another global banking-driven recession, and what it does mean for the giant real estate lending, investment and asset management business?

The most immediate impact is likely be on global interest rates decisions this week. After two weeks of tumult in the financial markets, all eyes will be on Wednesday's interest rate decision by the Federal Reserve in the US and the Bank of England's decision on Thursday. Experts increasingly expect the Bank of England to hold the rate at 4% rather than lifting it by another 0.25%, something that has major implications for real estate lending and investing.

The general view at the global real estate conference in Cannes last week was that a silver lining would be a return to a more stable and lower interest rate environment.

Jochen Schenk, chairman and chief executive of Real IS, which last year sold €1 billion of properties and bought €600 million, said the bailout of US banks Silicon Valley Bank and Signature Bank had already given property investors hope that interest rates would not be hiked further for now. “If the whole disaster has one advantage, it shows that whatever it takes to tame inflation is not without collateral damage."

Stephanie Hyde, UK chief executive at JLL, said the swift moves by regulators and governments to protect the banking sector provided comfort that a wider credit squeeze and banking crisis was not coming: "In terms of the banking concerns, clearly it has been important the central banks stepped in. This is not a Lehman's moment."

The tie-up will have a number of ramifications for real estate.

As of 31 December, Credit Suisse's real estate loans as reported to the Swiss National Bank were valued at approximately 143.7 billion Swiss francs or $153.77 billion (£126.03 billion). Around $25 billion of this is commercial real estate lending. It also securitises and trades in commercial and residential real estate and real estate-related whole loans and mortgages.

UBS has around $46.85 billion of real estate lending on its balance sheet, according to its report for the year ending 31 December 2022, and $7.9 billion off balance sheet.

The combined real estate asset management business comes in at over $100 billion with Credit Suisse Asset Management's global real estate team managing over €44 billion ($46.9 billion) in assets, as of 30 June 2022, encompassing approximately 1,250 properties in 13 countries.

The scope for consolidation inevitably raises questions about the future of tens of thousands of staff and where the joint company will retain its headquarters. As of the end of 2022, Credit Suisse had around 334 million Swiss francs ($359.2 million) of net lease costs and had entered into 12 sale-and-leaseback transactions that year with lease terms ranging from five to 10 years.

In London, Credit Suisse employs around 5,000 employees in its headquarters in Canary Wharf, London at One Cabot Square. Qatar Investment Authority bought the 546,144 square feet of offices for £330 million in 2012, reflecting a net initial yield of 5.4%, with the bank leasing back the property until 2034.

The bank is already looking to sublet around 190,000 square feet at the high-rise tower following a restructuring of its working practices over a year ago. JLL and CBRE are marketing the top nine floors of the building, which dates from the 1980s and was fully renovated between 2015 and 2019.

UBS occupies 5 Broadgate at the Broadgate estate by Liverpool Street station. At the end of last year it completed a sublease of two floors totalling 105,000 square foot at the landmark "groundscraper" to accountant Grant Thornton as both pursed a hybrid working policy. UBS occupies the rest of the 733,000-square-foot building on a lease ending in 2035.

Korea’s National Pension Service bought the headquarters for more than £1.2 billion early last year in the largest single asset sale in the UK. UBS has roughly 6,200 staff in the UK, with many based in its City of London premises.

The market already expects Credit Suisse's Cabot Square offices to be most affected by further subletting, adding to a continuing story of major bank real estate consolidation that at present includes the likes of Nationwide and HSBC.

Credit Suisse has more than 150 offices in 50 countries. UBS has its American headquarters in New York City and operates in over 50 countries worldwide, with close to 60,000 employees.

Credit Suisse's ongoing problems of recent years, which have included a long period of lossmaking as well as money laundering charges in Bulgaria have been exacerbated by the rising global interest rate environment and the collapse of the US's 16th largest bank, Silicon Valley Bank two weeks ago.

Credit Suisse received an emergency $54 billion lifeline from the Swiss National Bank on Wednesday in a bid to reassure markets, but its shares continued to plunge. Regulators wanted a deal with UBS before the financial markets opened on Monday.

Six major central banks, including the Bank of England, have also taken joint action to lift dollar flows in a bid to stem the crisis of sentiment among lenders. A "swap line arrangement", includese BoE, US Federal Reserve, Bank of Japan, European Central Bank, Bank of Canada and Swiss National Bank is due to run until at least the end of April and aims to bolster market confidence in the banking system, particularly the US regional lenders.

Whether this is a success will play out this week as financial markets respond. The initial news has not been particularly promising with London's FTSE 100 index down 1.6% in early trading, while Japan's Nikkei 225 lost 1.4%. The Hang Seng Index in Hong Kong fell 2.6%.

By 10:48am GMT, the news was more positive with European stock markets recovering. London's FTSE 100 index was up 0.16% while the leading French and German indexes were in positive territory, having fallen by around 1% in initial trading.