Savills redefines lending list criteria as banking rules impact on UK market

International real estate advisor Savills has named the UK commercial property market's Top 16 'most active bigger ticket lenders'. These lenders are those who, according to Savills' enquiries, are both actively seeking and have actually achieved total new lending over the last six months of at least £75 mln (EUR 87 mln) in typical loan sizes of above £20 mln. The list sees the definition of 'actually achieved' reduce from £100 mln in October 2010 to £75 mln today, reflecting the changes in the current lending market.

'There is no doubt there is less debt financing about,' said William Newsom, Savills UK head of valuation. 'There are also fewer opportunities for lenders to pursue. I have changed the definition to 'actually achieved' because there are a number of major banks that are actively seeking bigger ticket opportunities but who have not been able to achieve their ambitions owing to these market dynamics.'

Compared with Savills' previous list published in October 2010, new entrants on today's list are: Deka Bank, Deutsche Hypo, HSBC, ING Real Estate Finance, MetLife, LBBW and Société Générale. All of these names have appeared on previous lists of active lenders published by Savills with the exception of MetLife, who are strong emerging lenders with two well-publicised deals recently completed.

According to Savills, the total investment volumes transacted in the UK may be increasing but this does not correlate with the amount of new lending achieved. The impact of Basle III along with banks' continuing caution, the refinancing bulge and increased cost of capital, has led to some banks such as DG Hyp and West Immo to exit the market in the past six months. Some banks have also been affected by takeover and merger activity.

The firm sees a second list of medium ticket lenders, active in the £10-20 mln loan bracket to include Handlesbanken, Nationwide Building Society and Santander, the latter of whom is also included in the big ticket category. Neither list specifically includes Royal Bank of Scotland/Coutts or Lloyds Banking Group who, whilst very active in the property finance market, are nevertheless focusing on working with their existing core clients.

Newsom added: 'The new names appearing in the market are encouraging, in particular those non traditional banks such as insurance companies, but for the most part they remain on the periphery of the market and collectively they are not making up for the reduced activities of existing players.'

The list of 16 includes:
Aareal Bank
Barclays Bank
Bayern LB
Deka Bank
Deutsche Bank
Deutsche Hypo
Deutsche Pfandbriefbank
Eurohypo
Helaba
HSBC
ING Real Estate Finance
Landesbank Baden-Wüerttemberg (LBBW)
Landesbank Berlin
MetLife
Santander
Société Générale