Alejandrina Catalano
Non-bank players take a bigger role as new lending leaps 51%, reports Alex Catalano
The UK’s real estate debt market is well into recovery mode. De Montfort University’s latest UK Commercial Property Lending Market report found a much-improved picture, with new lending up 51% in 2014 and new entrants providing a bigger share.
Real Estate Capital market commentary
• Blackstone has refinanced two portfolios of logistics assets for its Logicor business, agreeing almost £1bn of new debt.
PERE Research and Analytics’ monitoring shows 74 debt funds in the market this month, seeking a total of $36.7bn. These include Tricadia Capital, which has teamed up with Irish adviser LeBruin to provide €100m of debt for investment acquisitions.
Colonial has raised €1.25bn with a bond issue to to replace €1.04bn of syndicated bank debt.
The issue, the first by a Spanish property company, was two times oversubscribed.
Deutsche Wohnen, Germany's second-largest listed residential landlord, will be refinancing €1.5bn of bank debt
"We hope to finish the total £1.5bn refinancing by the end of July, but it depends on market conditions," said Deutsche Wohnen's head of investor relations Torsten Klingner. The company will use mixture of bonds, new bank loans and cash to refinance and repay loans that mature mainly in 2018 and 2019.
Spain's bad bank, Sareb, is selling a €561m portfolio of resort assets and loans, the legacy of developer Polaris World.
Project Birdie includes three golf courses, two five-star hotels and 2,146 residences and land in Murcia.
Centre Parcs, the UK holiday operator, is partially refinancing its debt with a £590m CMBS.
The issue, CPUK Finance, is in two tranches of senior A notes: a five year, £350m piece carries a coupon of 2.667%, 135bps over the benchmark gilt while £140m of 10-year bonds are priced at spread of 165bps, a coupon of 3.588%.
Spanish property company Colonial is planning to refinance €1.04bn of bank debt with a bond issue.
Once the country's second-biggest property company, Colonial ran into severe trouble when Spain's property market crashed in 2008. A restructuring last year finally righted balance sheet with a new €1.04bn syndicated loan and a €1.26bn share issue. The bond issue, which Standard & Poor's has given a preliminary rating of BBB, will repay the syndicated loan. which carries a spread of 400 basis points over Euribor and matured in December 2018.
pbb Deutsche Pfandbriefbank has provided an additional €387m of financing to Scandinavian light industrial and warehouse specialist Sagax.
“The Scandinavian real estate markets show exceptional stability with increased activities from both domestic and international investors. Sagax is our largest client in the Nordic countries and we can look back on a successful business relationship of more than twelve years. The company has an excellent track record demonstrating a stable and sustainable growth over the years,” said Norbert Müller, pbb's head of real estate finance, continental Europe West.
With a liquid and fiercely competitive market for real estate, panellists at Real Estate Capital’s inaugural Germany 2015 Forum, held at Kempinski Gravenbruch, Frankfurt, last month, discussed whether lenders could keep chasing margins down and where to find value.
Germany’s real estate market is flush with cheap debt. “There is an oversupply of bank finance and that is a challenge for an international bank,” said Jürgen Helm, HSBC’s head of German real estate.
Deutsche Bank director Jörg Oestreich concurred: “Everybody is chasing exactly the same assets and that is why our lending margins have become so low.”