Lending business of the Pfandbrief banks

Commercial Property Finance

New commercial property financing amounted to € 53.1 billion in 2013, an increase of 10.3 % on the previous year. Lending within Germany increased by 14.2 % and hence represented a particularly large proportion of this growth, while business outside Germany also grew by
4.4 %.
Financing for retail properties and hotels substantially contributed to this rise, while the most significant market segment in terms of volume – office properties – also experienced growth. As well as being helped by the stable economic environment, commercial property
financing also benefited from increased demand among investors, both in Germany and abroad. While the more modest lending levels seen in recent years were due in large part to preparations for forthcoming regulatory requirements, banks are now prepared for the regulatory changes. They have also developed solutions that allow them to grant large loans, in spite of the pressure to reduce their balance sheets. This involves working with financial intermediaries and making greater use of syndicated loans.

The prospects for commercial property financing in 2014 appear encouraging. Demand on the commercial property market is likely to remain stable in 2014, providing potential opportunities for investment and the associated financing.

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