GERMANY – The results of Germany's first De Montfort-style property financing study were revealed at Expo Real in Munich and showed a substantial increase in competition from lenders.

The 'German Debt Project' launched last year by the International Real Estate Business School (IREBS) analysed €146bn in loans, capturing around 50% of the lending market in Germany.

The project – which was initiated by Real Capital Analytics (RCA) but now involves DTZ, Jones Lang LaSalle, Savills and Bulwiengesa – aims to increase transparency and provide Germany with something comparable with the De Montfort study in the UK.

The project's first results showed that the commercial lending market in Germany declined by €12bn in 2012, despite a strong increase in transactions.

The report said growing competition for the financing of core assets would lead to declining margins and increasing loan-to-value (LTV) ratios between 2013 and 2014.

Tobias Just, professor at IREBS, said: "Slightly elevated maturities during the years 2013 to 2015 do not lead to major concerns for the interviewed lenders.

"In prime lending (core assets), there are no financing gaps at all. In contrast, there is high competition around lenders. This is not necessarily the case for the debt financing of secondary and tertiary real estate assets."

There were more signs at Expo Real that competition from banks and alternative lenders would remain high, as Allianz Real Estate announced it was planning to lend €5bn, and Union Investment was revealed to be the latest real estate fund manager considering a debt investment strategy.

Roland Fuchs, who took charge of Allianz Real Estate's European lending programme last week, said: "Our project pipeline is full, and we have the necessary resources to carry out high-volume property-financing transactions over the next few years."

He said the investor would act as a direct investment partner to team up with established banking partners to provide club deals rather than directly "replace banks or quickly seize market shares from them".

Christoph Schumacher told IP Real Estate Union Investment Institutional Property was exploring the possibility of launching a real estate debt fund after identifying a lot of interest from investors.

He said it was at an early stage but it would be likely to entail partnering with a bank to provide financing at LTVs of 60-75%.

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