US investment banks have ramped up their loan business in Germany since the shock Brexit vote in June, Nick Harris, director of European valuations at Savills, said at Expo Real on Tuesday.
'Banks such as Goldman Sachs, Bank of America and Morgan Stanley have definitely become more active in Germany since the vote in the UK to leave the EU,' Harris said. 'They are largely interested in senior debt.'
Interestingly, German lenders, particularly alternative lenders, have also become less active in the past year because they are driven by absolute returns.
However, Germany's lending market has stabilized in the past year and has become very broad, liquid and very competitive. As a result, loan margins have stabilized at around 80 basis points to 120 basis points on prime assets.
Subsequently, some German lenders are turning their attention to other markets, particularly the UK following the Brexit vote, Harris said. 'Some German banks have actually re-entered the UK market since the vote in June. Many of them are looking at Greater London but, very interestingly, some are looking at offices and retail in Scotland, which has been a surprise to the market.'
