French insurer AXA plans to lend more money to property investors to bridge the funding gap left by Europe's real estate banks, news wire Bloomberg has revealed.
French insurer AXA plans to lend more money to property investors to bridge the funding gap left by Europe's real estate banks, news wire Bloomberg has revealed.
Citing Pierre Vaquier, chief executive officer of AXA Real Estate Investment Managers, the news wire reported that AXA has already made EUR 1 bn of real-estate loans. AXA has the capacity to lend EUR 1.5 bn more, said Vaquier, whose company is the world's second-largest property asset manager.
'There's a lot of attraction to this kind of a product from insurance companies,' said Vaquier. Senior loans, which take priority for repayments in the case of a default, yield 2 to 3.5 percentage points more than other debt and so provide a higher return, he added.
European banks have seen their real estate lending portfolios shrivel in the past two years following a five-year lending spree during which they collected almost EUR 1 trn in debt. According to estimates from CB Richard Ellis, lenders will sell, foreclose or write down more than EUR 200 bn of loans from their balance sheets over the next decade.
