MIPIM 2010: German banks boost increased lending in 2010

According to a report published by Savills at this year’s MIPIM, the world’s largest annual property fair, German banks including Aareal Bank, Baverische Landesbank and Deutsche Bank are underpinning an increased appetite for real estate lending in Europe in 2010.

The number of European banks willing to issue loans of more than £30 million (€35 million; $45 million) has grown significantly in 2010, boosted by more German banks wanting to lend at that size.

According to a report issued by property services firm Savills at this year’s MIPIM real estate jamboree in Cannes, France, more lenders have ambitions to write “big ticket” loans. The increased numbers, the firm said, were boosted by lenders from Germany including Aareal Bank, Baverische Landesbank and Deutsche Bank.

Savills recorded 21 banks with an appetite to issue loans of £30 million or more, 60 percent of which were German. These banks were: Aareal Bank, Aviva, Bank of London and Middle East, Barclays Bank, Bayerische Landesbank, Canada Life, Deka Bank, Deutsche Bank, Deutsche Pfandbriefbank, Deutsche Postbank, D G Hyp, Eurohypo, Helaba, ING Real Estate Finance, Landesbank Baden-Wurttemberg, Landesbank Berlin, Lloyds Banking Group, Nord LB/Deutsche Hypo, Royal Bank of Scotland, Santander, Westdeutsche Immobilienbank.

But while there are more lenders willing to issue larger loans in 2010, lenders surveyed by Savills said that there was a “scarcity of good quality lending opportunities” and that this was “holding back lenders from realising their ambitions.” With fewer commercial opportunities coming to the market in the last 12 months, Savills said, lenders have resisted making big outlays.

The firm said: “One consequence of this is that for better quality property investments, loan to values have increased and interest rate margins have decreased as lenders compete with each other for business.”

Savills also reported that banks willing to lend on development have “re-emerged” into the market, with such institutions including: Barclays/Barclays Wealth, Close Brothers, Eurohypo, HSBC/HSBC Private Bank, Investec, Lloyds Banking Group, RBS/Nat West/Coutts.