Equity buyers dominate investment market
Banks’ strict lending criteria and a lack of suitable opportunities are stopping many lenders from lending on real estate, despite their strong ambitions to do so, says Savills. In its latest list of the top 12 most active bigger-ticket lenders – those that have lent at least £100m over the past six months in typical loan sizes of more than £20m – nine are German lenders.
The list in full reads as follows: Aareal, Barclays, Bayern LB, Deutsche Bank, Deutsche Pfandbrief, Deutsche Postbank, DG Hyp, Eurohypo, Helaba, RBS/Coutts, Santander, and West Immo. They all appeared in Savills’ previous list published in June. Other active lenders that have lent in smaller lot sizes, such as Handelsbanken, Investec and Nationwide BS, did not satisfy the criteria of ‘most active bigger-ticket lenders’.
William Newsom, UK head of valuation at Savills, 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 Savills Central London Investment team, said: “There are unprecedented levels of investor demand for Central London investment property and it is lack of supply that has constrained the volume of turnover. 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 lengthy approval processes. We estimate that of the ten largest deals in the City this year, six have been equity-driven.”
