New lenders spark legal debate in Germany

The growth of new lenders is creating a need for new structures and standards in Germany, according to Stephan Kock, partner and head of international finance at law firm Ashurst.

In Germany mezzanine providers are still coming to terms with the new market conditions and legal requirements, for example, whether a banking licence is needed, he said. 'There's no established mezz standard here. Structures are creeping in from the UK, but there is a disconnect between the legal and the investment issues.'

Speaking at PropertyEU’s Outlook 2013 Investment Briefing held at the OpernTurm tower in the Frankfurt office of law firm Ashurst at end-November, Kock predicted that 2013 would generate further opportunities for buyers interested in non-performing loans and workouts as a wave of CMBS and other loan maturities hit the German real estate market.

Kock noted that more attention was now being paid to the interface challenge and that an interconnected approach was evolving. 'Up to now there was low growth, but we're pleasantly surprised by the new business and it is becoming more stable. This will remain a strong feature for the next year. That's a good sign for the product and the way forward.'

On the financing front, lending terms will remain tight in the next 12 months, Gerhard Meitinger, head of real estate finance Germany at Deutsche Pfandbriefbank, told the briefing. Like other major real estate lenders, Deutsche Pfandbriefbank has retreated to core markets but is still open to financing classic real estate assets, he said, including residential, retail and logistics.

'We're not financing hotels or healthcare and clients have to bring equity.' Depending on tenant structure and the type of loan, typical LTVs range from 50-60% for logistics to 65% for resi, he said.

The full story appears in the December issue of PropertyEU. Click on the link below to subscribe: