Lloyds Bank lent £8.6 bn (€9.9 bn) to the UK commercial real estate sector in 2016, only slightly less than 2015's £9 bn volume, despite the fall in investment transactions before and after Brexit.
Lloyds held overall lending volumes roughly steady and increased its market share in a year when 'market volumes fell by around 30%', said John Feeney, managing director and the bank's head of commercial real estate.
With real estate investment volumes falling particularly steeply in London, from £39 bn in 2015 to £18.7 bn in 2016 according to Real Capital Analytics, it is likely that a relatively higher proportion of Lloyds' lending last year was refinancing rather than acquisition loans.
In December, for example, the bank completed a £409 mln refinancing with Lazari Investments in which it combined arranging a £118 mln, 10-year loan via Scottish Widows with a £291 mln, five year-facility in a three-bank club.
Scottish Widows
The £8.6 bn lending volume in 2016 includes both its larger loans and SME lending and funding which Lloyds underwrote and then distributed in the capital markets. Feeney said the bank was the UK syndicated real estate debt market leader.
He said: 'We continued to support clients both with our balance sheet and underwriting expertise. In 2016 we distributed far more UK commercial real estate risk than any other bank which places us in a strong position to source sometimes volatile liquidity on behalf of our clients.'
He added that the bank had increased its lending on development, launched a green lending programme and begun to arrange loans for Scottish Widows, the Lloyds-owned insurer which lends longer-dated fixed rate debt.
'In 2016 we increased our support for clients' development activities. Our clients are shaping the future of the UK economy, providing crucial investment for jobs and growth and we’re proud to help make this happen.
'We also launched the ground-breaking £1 bn Green Lending Initiative while our partnership with Scottish Widows had its busiest period yet. We believe that our innovative product mix sets us apart from the rest of the industry and this explains how we grew our market share against a challenging backdrop.'
PropertyEU’s first issue of FinanceWatch, published next week, looks in detail at Lloyds' green lending programme.
