CBRE: Maximum loan size doubles to €200 million in Germany (DE)
Wednesday 24 August 2011
The maximum loan size in Germany has doubled to €200 million in a single quarter, CB Richard Ellis (CBRE) has revealed in its Q2 2011 European Capital Markets report. Competition between lenders to finance prime transactions in this core market has allowed Germany to defy the trend of tightening lending conditions spreading across Europe.
In stark contrast, lending in Spain remains severely constricted and single lenders are only prepared to finance relatively small transactions. The downgrading of the country’s sovereign debt has increased the cost of capital to Spanish banks, resulting in high margins.
In France, lending remains generally available for prime assets and good secondary properties but a substantial proportion of lender’s capacity is being absorbed by refinancing deals.
Finance is also reasonably available for prime and good secondary assets in the United Kingdom, but there has been a steady increase in margins over the last nine months.
Natale Giostra, Head of UK & EMEA Debt Advisory, CBRE Real Estate Finance, said: “The deteriorating economic situation and new concerns over sovereign debt has accelerated the tightening of lending terms, which first became evident in the Southern European markets. There is almost no desire to finance speculative construction and, outside prime, lenders are only prepared to provide capital to borrowers with a proven track record.
“German banks remain active across much of Europe, apart from in France where local lenders are dominant, which is keeping margins relatively low particularly in the Netherlands. This has created a gap in the market for loans that are too small for the German banks, but too big for local niche lenders.”