Anti-cyclical investors eye distressed loans in Germany

Distressed loans are continuing to attract investors with an opportunistic, anti-cyclical approach, according to Thomas Köntgen, the new chairman of the board at Eurohypo, who has replaced Frank Pörschke.

‘There is a significant level of liquidity, especially for non-performing loans. We are keeping a close eye on the distressed loan market and we are looking at market opportunities [to sell on distressed loans],’ he told PropertyEU at EXPO REAL. However, he insisted that fire sales are not on the cards.

While Eurohypo, a subsidiary of Commerzbank, has no fixed timeline to dispose of its distressed loans, it would ‘seriously consider’ any suitable offers made, Köntgen said.

So far, the ongoing crisis in European capital markets hasn’t had an impact on Eurohypo’s lending strategy, Köntgen said, although he conceded that Europe is in ‘the eye of the hurricane’. ‘Hopefully, we will have clear answers in the next quarter. The market is concerned because something is going on that is beyond participants’ control.’

The lender originated EUR1.5 bn in new loans in the first six months of the year, as well as extending EUR 4.6 bn of existing loans. This compares with EUR 12 bn in new loans and extensions in 2012.