Unicredit expects EUR 3b of new lending in 2012

Italian lender Unicredit is planning to originate some EUR 3 bn of new loan business, excluding extensions, in Austria and Central and Eastern Europe this year while pressing ahead in markets such as the Czech Republic, Turkey, and Russia.

In an interview with PropertyEU, Anton Höller, head of international real estate finance at Unicredit Bank Austria said: 'We are targeting a lending volume similar to the 2011 level, and we plan to focus on cash-flow generating assets. We will only occasionally provide financing for development projects'.

In particular, the banking giant will look to strengthen its exposure to the Turkish property market, where it has been present since 2006 with a clear focus on retail product in second- and third-tier cities. Höller: 'We will seek to grow in Turkey where we would like to double our portfolio by the end of this year.' Unicredit is active in Turkey through its majority-owned Yapi Kredi Bank.

In the rest of CEE, Unicredit has a preference for funding office and retail assets in the Czech Republic, retail in Poland, and offices in Romania and Hungary. 'We are cautious on offices in Warsaw as we see a risk of pressure on rents in the coming months due to the large pipeline of speculative projects currently under way.'

Commenting on the outlook for property financing in CEE, Höller noted that Unicredit has limited competition in some CEE markets. 'Financing dried up completely in some CEE/SEE markets after the withdrawal of the German as well as Greek banks which were active in the market. In the next few months, we see a chance for alternative lenders and insurance companies to step into property lending in CEE, in the same way as is already happening in Western Europe.´