banks were willing to help fund large UK real estate purchases in the last six months than in the previous year, though many commercial property deals are being done without the need for debt, according to research out today.
Twelve banks have lent at least £100m each in the period, in typical loan sizes of above £20m, said property advisor Savills.
Nine of these lenders are based in Germany, including Deutsche Bank. Eurohypo and DG Hyp. Only Barclays, RBS and Santander stand out as non-German large property lenders.
Savills said that banks from other countries are instead teaming up to provide large-scale loans for property purchases. A syndicate of French banks and ING helped fund the Carlyle Group’s £671m purchase of six properties in the White Tower portfolio in July.
Many other lenders with existing property loan books have worked with existing customers to restructure existing loans, in particular HSBC and Lloyds Banking Group, said Savills.
Savills’ head of UK valuation William Newsom said: “In the commercial property investment market there has been a reduced volume of properties coming to the market, and often those prime assets that lenders would like to lend against are being snapped up by non-debt-backed purchasers.
“The transaction markets are being dominated by equity players, leading to a scarcity of opportunities for lenders.”
Felix Rabeneck, director of central London investment, said: “The market this year has been largely driven by equity buyers who are in some cases favoured by vendors given the perception that debt is difficult to secure with a lengthy approval process. We estimate that of the ten largest deals in the City this year, six have been equity driven.”