A look at property lending as MIPIM gets under way
It’s MIPIM time again! Those who struggled through yesterday’s Eurostar delays to make it to the south of France have arrived to find it rather breezy and cool so far in Cannes, but the slew of news from the annual event has already begun. Key events on the programme today include a keynote address this afternoon by London’s deputy mayor Sir Edward Lister, entitled “2012: London’s year of opportunity”.
The Times today reports on Cushman & Wakefield’s survey of bank lending on commercial property across Europe, which will be launched at MIPIM today. The results of C&W’s survey show that only 36 of the 78 banks interviewed are ready to lend to new commercial property customers, while a further nine will only lend to existing clients. The Times says this survey represents a fall of one-third in active property lenders compared with C&W’s survey a year ago.
Many of the banks surveyed have strict criteria with regard to lending, with some only prepared to lend in the UK, France and Germany. Within the UK, some lenders are only ready to offer loans on commercial property in Central London. C&W says that banks such as Eurohypo and Societe Generale, which had previously been active lenders, have since withdrawn from new property lending in the UK altogether.
Savills meanwhile has published its own survey of “bigger ticket” property lenders in the UK (at least three deals over £30m in the past half-year): Property Week says the firm has expanded its list of these lenders to 21 from 19 over the past six months, with AIG, Citigroup, Deutsche Postbank and Lloyds joining the list while Aareal and Eurohypo have been removed from it. Savills also says lenders are being very selective, and that they are tightening their lending terms.
Savills’ head of valuation William Newsom says lenders are seeking to provide finance to borrowers with a good track record, secured against good-quality properties, let to strong tenants on long-term leases in good locations – preferably inside the M25. That’s certainly a specific set of requirements.
