NEWS ANALYSIS: The lender list

Credit, need it be said, is a relatively rare commodity for real estate investors looking to finance deals in the UK. However, there are signs that more lenders are beginning to underwrite new business.

PERE met recently with the European head of real estate at a major US bank, who said his firm would begin to originate loans for the first time in the UK to add to its investment banking presence.

For understandable reasons, he does not want the name of the bank to be publicised just yet, but assuming that the plan goes ahead it can be added to a list published recently identifying banks willing to lend.

UK property services firm Savills released the list at the EXPO Real property fair in Munich in October, and it makes for interesting reading.

Savills said its data indicated the “property lending market is opening up to increased activity” following a low point in the first half of this year. It added that in March it found 23 lenders willing to originate loans of £10 million (€10.9 million; $16 million), but since then there has been a “significant” rise in appetite for banks to lend above £20 million.

Of the UK institutions, HSBC, Barclays Bank, Lloyds Banking Group, Aviva, Nationwide Building Society, Coutts & Co are said to be among the top lenders. The London-based, Shariah-compliant bank, Bank of London and The Middle East, is also on there.

Outside the UK there is ING Real Estate Finance, which is part of the Dutch ING group, Investec and Canada Life. The rest of the top 23 lenders are from Germany and include some familiar names such as Deutsche Pfandbriefbank (formerly part of Hypo Real Estate Group), Munich Hyp, Deka Bank, Helaba, Deutsche Postbank, Landesbank Baden-Wurttemberg, Landesbank Berlin and Westdeutsche Immobilienbank.

Savills did investigate US banks, but none made it to the top 23 list. If PERE’s information is correct, some US banks are coming back. In the current climate it is heartening to hear evidence that credit is returning to the market.