German banks dominate big UK property deals

MUNICH: German banks are the most active in UK commercial property deals above 20 million pounds (RM95.7 million), representing nine in a list of 12 banks willing to finance larger transactions, a survey of lenders showed on Monday, Oct 4.

The 12 lenders, which include Deutsche Bank and Aareal, are those that have made large loans in the last six months totalling at least 100 million pounds, property adviser Savills said in the report, released at the EXPO property trade fair in Germany.

Other German banks on the list are Bayern LB, Deutsche Pfandbriefbank, Deutsche Postbank, DG Hyp, Eurohypo, Helaba and WestImmo, with UK banks Barclays and RBS and Spain's Santander making up the difference.

Banks are also fighting over a scarce amount of deals in prime properties, mainly in central London, popular with institutional buyers due to the security of their rental income and the prestige factor, Savills said.

"There has been a reduced volume of properties coming to the market, and often those prime assets that lenders would like to lend against are being snapped up by non-debt-backed purchasers ... leading to a scarcity of opportunities for lenders," said William Newsom, UK head of valuation at Savills.

The report said other large UK banks with existing property loan books, such as HSBC and Lloyds Banking Group, have also been more active in working with existing customers and restructuring their loans.

Barclays, the fourth-largest UK bank, told Reuters last week it has renewed its focus on commercial property, bringing real estate investment and corporate bankers under a single banner with a view to luring clients from its UK peers. — Reuters

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