JLL
Markus Kreuter
According to Markus Kreuter, team leader Debt Advisory at JLL Germany, the second half of the year caught most participants by surprise. "At the half-year stage most lenders had not expected how dynamic the second half would turn out to be in commercial real estate, ending up as it did with the third-highest level of transaction volume ever achieved."
A new report on financing in Germany by property services advisor JLL shows that Germany's commercial property financiers increased their new business last year by 15% to €41.6bn. The study shows that all but one of the 13 financing banks lent more on new business than in 2015, with most of them showing double-digit growth. All but two of the banks are forecasting lower new lending for this year, 2017.
According to Markus Kreuter, team leader Debt Advisory at JLL Germany, the second half of the year caught most participants by surprise. "At the half-year stage most lenders had not expected how dynamic the second half would turn out to be in commercial real estate, ending up as it did with the third-highest level of transaction volume ever achieved. The high levels of investment transactions in 2016 made the higher lending activity possible. However, we don’t see any signs that the greater willingness to take on more risk in the form of higher LTVs is itself leading to the higher levels of new lending."
The biggest lender was DG Hyp with €7.1bn of new lending, up 27% on the previous year, followed by Helaba with €5.1bn (up 21%), while four other banks wrote new business of between €4.2bn and €4.9bn. The bank with the largest spurt in growth was DekaBank with a 75% increase, followed by the Postbank with 30% - both banks, incidentally, the only two projecting a further rise in their own lending for 2017. The only bank that lent less last year than the previous year was pbb Deutsche Pfandbriefbank.
Overall lending portfolios also rose for 11 of the 13 banks, to a total of €200.2bn, a rise of 2%. The only two with a lower overall book were Deutsche Hypo and Aareal Bank. "Given the context of the strong regulatory influence from banking supervision, we consider this development to be remarkable", said JLL's Kreuter, pointing out the double effect of both an expanding credit book and the new higher equity capital requirements. Those adding most to their loan books were Berliner Sparkasse, Deutsche Postbank and BayernLB.
For 2017 the majority of banks are expecting lower lending than last year, although the level of commercial property transactions along with commercial residential deals, at a forecast €67bn, is not expected to fall much short of last year's record level.
