DG Hyp, Deutsche Hypo finance Frankfurt Opernplatz project.

Anybody familiar with Frankfurt’s Opernplatz in the heart of the city opposite the Old Opera House can’t but be aware of the sizeable project development currently being constructed on the site, part of the green belt running around Frankfurt’s inner core.

About half of the 33,500 sqm new building will be a 150-room five-star Accor Hotel from the Sofitel Group, with a restaurant, bars, conference rooms, shops and a fitness centre. A further 8,000 sqm will be top-quality offices, and 2,700 sqm of boutiques. The second part of the building will contain 5,000 sqm of condominiums and a parking garage for 310 vehicles. The building is scheduled to open in summer 2015.

The project developer is Elleke Gruppe, and the €150m financing is being provided 50% each by Deutsche Hypothekenbank and DG Hyp, two banks that have strengthened their relative positions in German property financing since the start of the crisis, as several erstwhile competitors have drawn back from the market.

Deutsche Hypo released its full year 2012 results last week, and posted a 54.1% increase in net profits versus the previous year, to €50.4m from €32.7m. Net interest income rose 6.5% to €204.3m, while bad debt provision improved from €82.7m to €72.0m.

New domestic property financing commitments rose to 67.7% of the loan book. New business abroad declined by a third to €0.8bn, while in Germany it rose by 8.6% to €1.7bn, a clear sign of the bank’s new priorities. The most profitable segment was commercial property financing where income rose 15.1% to €176.3m, although new loans amounting to €2.513bn lagged the previous year’s €2.77bn, with most of that attributable to office and retail property

Geographically, the bank is pulling back from Spain and the US, although Poland is likely to merit increased commitment, it said.