Deutsche Hypo to resume Spanish lending

Germany’s Deutsche Hypothekenbank (Deutsche Hypo) is preparing to resume lending in Spain, a market it pulled back from in 2013.

Germany’s Deutsche Hypothekenbank (Deutsche Hypo) is preparing to resume lending in Spain, a market it pulled back from in 2013.

Announcing its first-half 2017 results, the German bank said that the resumption of business in “the former target market” Spain is being prepared, alongside an announcement that it is to open a new branch in its domestic market in Berlin.

Speaking recently about the Spanish market, Sabine Barthauer, a member of the board of managing directors at Deutsche Hypo, said: “The commercial real estate market in Spain is currently celebrating a widely acclaimed comeback and is now one of Europe’s most dynamic markets.

“Accompanied by remarkable economic growth of more than 3 percent and a booming tourism sector, the transaction volume for the Iberian Peninsula’s commercial real estate market is seeing continuous growth. Domestic and foreign investors alike are optimistic about the Spanish market’s further development. I endorse their view.”

Meanwhile, Deutsche Hypo reported €2.11 billion in newly originated commercial real estate loans in the first half of the year, 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.

Office properties remained the most important asset class in the portfolio of Deutsche Hypo and contributed €712 million to the new business volume, which is 23.2 percent down from H1 2016. Retail properties accounted for a volume of €701 million, up 40.2 percent year-on-year. The volume for residential properties increased by 152.9 percent to €387 million.

“The European commercial real estate markets in which we are active remain robust,” said Andreas Pohl, chairman of the board of managing directors of Deutsche Hypo. “Even though the competitive situation remains challenging, we are confident that we can continue to acquire an appropriate volume of new business that satisfies our high quality and return requirements.”

Deutsche Hypo said that it made €35.2 million from normal operations in the first half of the year, a 4.5 percent year-on-year increase. The rise was mainly linked to the “stable earnings situation and the continuing positive risk situation in the core area of commercial real estate finance”, the bank said.

Net interest and commission income declined by 4.6 percent to €98.8 million, mainly due to the planned reduction of the capital market portfolio.