Deutsche Hypo will open a new office in Spain this year, as the German bank prepares to re-enter a market from which it pulled back in 2013.
The office will be based in Madrid and will be headed by María Teresa Linares Fernández, who has been with the bank for eight years, managing its remaining legacy Spanish portfolio. Her role with the bank will now be focused on new lending for acquisitions.
“It’s important to come back to the market. Our clients are institutional, private and international investors interested in this market again” – Sabine Barthauer
The bank will resume lending activities in the Spanish market in the coming months, and expects to lend €200 million per year initially, with the aim to increase volumes progressively.
“The Spanish economy has gained pace again. And our clients are again interested in investing in this market. The office segment is quite successful at the moment in the country,” Sabine Barthauer, member of the board of managing directors at Deutsche Hypo, told Real Estate Capital.
Barthauer also noted that Spanish CRE transaction volumes increased by more than 25 percent to €8 billion in the first half of 2017 – the highest first half since 2008.
“This is a strong sign of recovery and I think it’s important to come back to the market. Our clients are institutional, private and international investors interested in this market again,” she said.
Deutsche Hypo will focus on the prime office segment in Madrid and Barcelona. Asked about the Catalonia crisis and the threat for Spain’s growth if the regional government decides to push for full independence, Barthauer said the bank “will keep a close eye on the developments in Catalonia”.
Although commercial real estate prime assets are currently scarce in Spain’s main capitals, new office developments will provide further availability, Barthauer noted.
“At the moment, there is limited supply in the prime segment, but there will be new developments and enough transactions in the future on the back of new projects,” Barthauer explained.
“The interest of occupiers has gained pace as well. We are seeing growing demand for rental space and this is the strong sign for us that there is a good perspective for the real estate market in the future,” she added, noting that the bank has no plans to target the Spanish residential segment.
In the first half this year, Deutsche Hypo reported €2.11 billion in newly originated commercial real estate loans, up 17.4 percent from H1 2016.
Its new business volume was partly boosted by real estate lending in the Benelux market, where the bank wrote €358 million, up by 321.2 percent, or €273 million year-on-year. The increase was mainly driven by residential real estate finance.
The bank’s core business remained in its domestic market, with property lending totalling €1.31 billion, up 20.1 percent year-on-year. The focus of new domestic business was office and retail, with selective financing of hotels and logistics. By contrast, new property lending in the UK market went down by 46.4 percent to €253 million. Overall, Deutsche Hypo’s new business volume in international target markets totalled €803 million, up 13.1 percent from H1 2016.