· Highest volumes for nearly a decade underpin strength of sector
· Year-on year volumes up nearly 60%
· UK is the largest national market, followed by Germany and France
The volume of EMEA syndicated real estate finance loans for full-year 2015 (EUR74.7bn) is the highest full year volume since 2007 (EUR76.7bn) before the Global Financial Crisis, according to league tables released by Dealogic.
The full-year 2015 figures also boast 58% year-on-year increase compared to full-year 2014 when only EUR32.9bn of volume was reported.
Excluding loans to REITs, 2016’s volume stands at EUR32.9bn, a near 50% increase from 2014’s figure of EUR22.5bn, the league tables show. The number of non-REIT deals also picked up considerably, with 147 deals reported this time around compared to 86 in 2014.
The UK led the charge in contributing towards the volume, with EUR20.9bn of volume via 59 deals. Germany and France posted volumes of EUR19.9bn and EUR12.9bn respectively.
Last year’s largest deal excluding REIT activity was a EUR1.4bn loan to French borrower, Carmila SAS.
HSBC and ING are the banks placed in the top three for most of the categories for 2015, which have been collated by Dealogic based on submissions from more than 25 lenders.
The EMEA syndicated real estate finance league tables were launched in 2014 by Dealogic, and were supported by trade body Commercial Real Estate Finance Council (CREFC) Europe.
CREFC Europe is backing the league tables as a way to improve transparency across the CRE lending market giving market participants and observers an insight in to activity levels and key players.
Loan syndications – where a group of banks pool balance sheet capacity to participate jointly in a large loan – long a dominant feature of the corporate debt market, have become an increasingly important part of the CRE landscape since the crisis. Syndication is a valuable tool for originators, allowing them to manage balance sheet capacity and capital constraints efficiently. In turn, it allows a wide range of lenders to participate in loans they didn’t originate themselves. Overall syndication facilitates the effective flow of credit to the real economy, supporting urban regeneration schemes and transactional activity in the real estate market.
Steve Willingham, managing director and head of EMEA real estate finance at HSBC, said:
“These league tables are an indicator of the property sector’s commitment to transparency and collaborative working; and underline how much progress has been made since the GFC in realigning our sector to minimize risk and maximize the sharing of data.
“Clearly, the greater liquidity there is in a loan, the tighter pricing that can be achieved; and
the more market standard that terms develop, the more liquid it becomes. The transparency we are trying to promote here is crucial if we are to achieve the kind of sensible regulation we need to support the sector’s growth. Attracting a rich diversity of investors into real estate is positive not just for banks but for funds, developers and borrowers across the board”
Frank Jeschke, head of portfolio management at Landesbank Baden-Württemberg, said:
“LBBW’s league table position once more shows the meaningful role it plays in European Commercial Real Estate Finance and is a prove of the reliable underwriting capacity it has. “For us, it is a great confirmation of the strong relationships we have with institutional CRE investors as well as (of) our ability to access liquidity in the secondary markets through our platform due to the quality of our loans and the reputation we have with our syndicate partners.”
Jean-Maurice Elkouby, Head of REF Syndications at ING, said:
“We are delighted to feature so well for the second year running in those league tables. This is a valuable tool for all stakeholders: arrangers, participants and regulators alike. We think 2016 may generate the same levels of activity as more assets change hands. Refinancings will also trigger some more volumes.”
Peter Cosmetatos, chief executive of CREFC Europe, said:
“The importance of the syndication market for commercial real estate finance can be seen clearly form Dealogic’s tables. Regulatory pressure on some banks to distribute broad appetite for commercial real estate risk and a returns, and the absence of an effective securitisation market are all contributing to these healthy figures.”