Pbb favours higher margin US market for growth
Among German real estate-related stocks showing strong stock market appreciation over the past twelve months is Munich-based financing bank pbb Deutsche Pfandbriefbank. The 'good bank' that emerged from the ashes of the collapsed Hypo Real Estate at the outset of the financial crisis has established itself as one of the leading providers of commercial property financing, and one of the few with global ambitions, a status that is increasingly being recognised by stock investors, since the bank's public flotation in 2015, and Pfandbrief investors, the bank's principal vehicle for refinancing itself.
The bank recently refinanced €120m for listed property investor TAG Immobilien for 3,600 residential and 30 commercial units at 18 separate locations across Germany, with a total area of 219,000 sqm. Most of the properties (65%) are in Mecklenburg Vorpommern, mainly in the state's largest city Rostock, with the rest in Brandenburg, Saxony-Anhalt and Berlin. The vacancy rate was put at 2.6%. The bank has a long-standing relationship with TAG Immobilien, which owns and manages more than 80,000 residential units, as well as commercial units, garages and parking spaces.
pbb Deutsche Pfandbriefbank also last month provided a €64m senior facility to Resolution Real Estate Advisors for the refinancing of well-established shopping centre Galeria Pomorska in Bdgoszcz, Poland, as well as the construction of an extension. Bdgoszcz it is the eighth-largest city in Poland, with 360,000 inhabitants.
It also financed the office and commercial project development "Office RS" in the Synergie Park in Stuttgart, the city's largest industrial park located in Stuttgart-Vaihingen. The complex is being developed by joint venture partners W2 Development Gmbh of Stuttgart and Munich investment company Competo Capital Partners GmbH. The financing amounts to "a mid double-digit million euro amount" said the bank.
The MDAX-listed bank is the largest issuer of Pfandbriefe in Germany. Last year it posted record profits of €301m, and paid a special dividend of €1.05 per share, although this was largely due to proceeds from the sale of crisis-hit Austrian bank Hypo Alpe Adria. Without this special effect, profits would have been a more normal €169m – about the same level being forecast for this year. The US is the bank's current main focus for expanding its new lending book, partnering with other banks and working with well-known partners for minimising risk, it said in a recent statement.
The bank is being viewed as a possible bidder for Hannover-based property lender Deutsche Hypothekenbank, which is being prepared for sale by current owner, the German state-backed lender NordLB. Rothschild is advising NordLB on options for restructuring following heavy losses on bad shipping loans. Other likely bidders for Deutsche Hypo, which has a book value of €1.4bn, include Aareal Bank, as well as public sector lenders such as BerlinHyp.