EUROPE - Real estate lending bank Deutsche Pfandbriefbank (PBB) has opened an office in Stockholm to target Swedish and Finnish investors in Scandinavian markets described by the bank as "stable, mature, transparent and well known to us".

The opening of the four-strong office - with a planned addition of two staff next year - follows the bank's first transaction in the region - the SEK464m (€56m) refinancing of a Swedish logistics portfolio belonging to a subsidiary of Norway's NLI Eiendomsinvest.

Although its predecessors were active in the region between 2001 and 2009, PBB re-enters the Nordic market after a three-year hiatus.

A Scandinavian presence will enable the AUM €1.6bn bank to target international investors looking to Sweden and Finland.

Rockspring and Grosvenor have both recently acquired significantly sized retail assets.

A spokesman for the bank, pointing to Finland's relative strength within the euro-zone, said: "Sweden and Finland are the biggest, most liquid, transparent and international markets.

"National and international investors value the stability of the property market and the good governance of the countries. On top of this, other factors such as the private consumption are seen positively."

Yet an industry source cast doubt on the suggestion that cross-border expansion would become a broader trend among pfandbrief banks as other banks pulled out of lending.

Overall, pfandbrief real estate lending has in fact fallen by 16% compared with 2011.

"You still have some activity in cross-border lending, though lenders might be more careful than they have been in the past," said the source.

"Some pfandbrief banks will find opportunities abroad, although lending will become more difficult."

Pfandbrief banks account for just under 30% (€330bn) of the residential lending market in Germany - slightly more than savings banks - and 56.5% (€297.3bn) of commercial property loans. 

For investors, pfandbrief would continue to have traction in an environment characterised by low interest rates.

"From an asset management point of view, there is always a case for them - and the case is bonds," the source said.

"In absolute dimensions, you might find the return on both mediocre - but pfandbrief are still better than the alternative."