 |
Lending business of the Pfandbrief banks |
Commercial Property Finance
New commitment activity in commercial property finance made a marked recovery in 2010, after the effects of the financial and economic crisis had led to a substantial decline in lending in the previous year.
During the year under review, total loan commitments rose by € 6.3 billion or 16.9% to € 43.8 billion. Total commitments in Germany were up by 12.0%. Besides the favourable overall economic environment, this reflected the fact that, since the beginning of 2010, there was an increase in transactions as well as in commercial construction investment. This was probably attributable in part to projects which had been postponed during the financial crisis and were resumed again in the year under review in light of positive expectations. Cross-border lending even rose by 22.0%. However, it should be borne in mind that lending activity in 2009 had dropped to a comparatively low level because of the strains mentioned above. The apparently strong growth is therefore not due to an expansionary effect but, above all, to a basis effect.
Developments in the individual segments differed. Growth in commercial property finance was driven above all by a significant increase in lending for office premises, by far the most important market segment, with a share of roughly 56% of total commercial loan commitments. Commitment activity in this segment rose by about one quarter (€ 5 billion). In particular, hotel properties as well as factory and workshop buildings recorded a very positive development in 2010, with new loans almost doubling. Because of their small shares in commercial property finance, however, their contribution to growth was relatively modest. Meanwhile, loan commitments for retail buildings, the second most important property category, and accounting for one quarter of commitment activity, stagnated at around € 11 billion.
