Europe’s Top 40 Lenders 2019, part 2: the other European and North American banks

In the second of three instalments, Real Estate Capital highlights the other European and North American banks most actively providing finance to Europe's real estate markets.

Welcome to the 2019 edition of Europe’s Top 40 Lenders. Now in its sixth year, this list is intended to highlight those most actively providing liquidity to Europe’s property markets today.

Here, in the second of three instalments, we highlight the other European (not including the UK and German) banks and the North American banks which have made the list. To see part one, covering UK and German banks, click here. Our final instalment, highlighting the insurers and debt funds, can be found here.

OTHER EUROPEAN BANKS

BNP Paribas

  • Senior, whole loan, development lender

  • Active across Europe

  • Lending volumes: undisclosed

  • Loan book: undisclosed

BNP Paribas was reluctant to provide lending volumes or the size of its European real estate loan book, but evidence of recent significant deals across the market determined its inclusion in this list.

On lending activity, a spokesman told Real Estate Capital the French bank had maintained double-digit percentage growth in new loans across Europe in 2018 and the first half of 2019.

In 2019, BNP Paribas participated as co-lead co-ordinator, alongside Crédit Agricole, in the €660 million loan provided to finance the Paris shopping centre Beaugrenelle in May. In its home country, the bank was also lead arranger in large office transactions including the Majunga and Lumière office buildings.

BNP Paribas
Paris: BNP Paribas has closed several financings in the French capital

BNP Paribas has a recent track record in large deals in the UK market. In H1 2019, it participated alongside four banks in arranging a CMBS-like transaction to refinance the Westfield Stratford shopping centre in London for Unibail-Rodamco-Westfield.

Elsewhere in Europe, the bank led the 2018 financing of the acquisition of Spanish SOCIMI Hispania by Blackstone, in what was understood to be a €340 million facility. In June, it financed a large logistics transaction in Spain, known as Phoenix, again with Blackstone as sponsor.

In the debt capital markets, the bank played leading roles in bond issues for property companies Klépierre, Prologis, Goodman and SEGRO among others.

Gilles Polet, the bank’s head of real estate finance Europe, said: “Markets remain positive even if it is now more important than ever to be selective in order to account for the different economic conditions across the region, as well as the evolution of the asset class.”

Crédit Agricole

  • Senior, bridge and development lender

  • Active in France, UK, Italy, Spain and Portugal

  • Lending in 2018: €3.9bn

  • Lending in H1 2019: €1.4bn

  • Loan book: more than €10bn

The real estate division within Crédit Agricole’s commercial and investment bank provided €3.9 billion of debt in 2018, it reported, up from €2.4 billion in 2017.

The French bank has been involved in two significant sustainability-linked financing deals since the last top 40 was published. In October, it partnered with Natixis and Société Générale on a €300 million green loan provided to AccorHotels, which financed the group’s purchase of its head office, Tour Sequana in Paris. The eight-year loan was priced at 1.8 percent.

In Spain, it acted as bookrunner and joint sustainability co-ordinator on a €1.55 billion sustainability-linked loan to Merlin Properties, which closed in April. The deal was heralded as the first of its kind for a listed Spanish property company. The facility refinanced a term loan and a revolving credit facility and was the largest real estate loan of its type to be closed in Europe, according to the bank. In all, 16 lenders participated in the syndicate.

In other deals, in February, Crédit Agricole partnered with BNP Paribas on a €660 million refinancing of the Beaugrenelle Paris shopping centre. The syndication of the deal was closed in June. In London, Crédit Agricole was mandated lead arranger in the £625 million (€674 million) refinancing of 8 Canada Square, Qatar Investment Authority’s tower in Canary Wharf and the global headquarters of HSBC. Six banks participated in total.

In Italy, in June, Crédit Agricole was mandated lead arranger and bookrunner alongside six other banks, in a €658 million, five-year financing of Grandi Stazioni Retail, the company that manages retail space across Italian railway stations.

ING Real Estate Finance

  • Senior, mezzanine, whole loan and development lender

  • Active in Benelux, Germany, UK, Spain, central and eastern Europe

  • Lending in 2018: €10bn

  • Lending in H1 2019: €6bn

  • Loan book: €30bn

ING reported a similar lending volume for 2018 as 2017, at €10 billion. Its mid-year 2019 figure – €6 billion – was also in line with its progress at the same point in 2018.

The bank is predominantly a senior lender and said its strategy remained consistent in the last year. However, its increased lending outside Europe is notable. “We follow the global presence of our clients,” a spokeswoman tells Real Estate Capital. “This has led us to further expand our business in the US and Asia.”

Deals outside Europe included participation in an A$ 2.2 billion (€1.4 billion) loan to Canadian real estate owner Oxford Properties to finance the take-private of the listed Australian real estate vehicle Investor Office Fund in December.

Madrid
Madrid: ING financed Spanish SOCIMI Colonial

In Europe, ING continued its efforts to finance energy-efficient buildings, as mandated by the bank’s global sustainability strategy. In November, it closed a €150 million sustainability improvement loan to listed French firm Gecina, which had a margin pegged to the firm’s environmental, social and governance rating, as measured by industry body GRESB. It was the first commercial real estate loan to be measured against a GRESB rating.

In February, ING provided a €75 million loan to Benelux logistics specialist Warehouses De Pauw. The proceeds refinanced eligible green assets under the borrower’s Green Finance Framework. In March, it provided its first sustainable loan to a Spanish SOCIMI, with a €75.7 million sustainable improvement loan to Colonial, the interest rate being linked to the borrower’s GRESB rating.

The bank continued to grow its presence in Germany. In April, it refinanced the Kaiser Wilhelm Höfe office complex in Cologne, which is managed by Art-Invest Real Estate, in a €100 million long-term loan. In June, it provided a €33.6 million loan to M&G Real Estate for the 13,800 square foot Aurum office building in Munich.

Natixis

  • Senior lender, plus mezzanine on trophy assets

  • Active in France, Spain, Italy, Germany

  • Lending in 2018: €7.5bn

  • Lending in H1 2019: €3.5bn

  • Loan book: €9bn

The French commercial and investment bank operates a global originate-to-distribute real estate lending strategy, typically syndicating 75 percent of loans.

In July, Natixis provided a €507.2 million facility to support Swiss Life Asset Managers’ €1.7 billion acquisition of an office portfolio, mainly comprising prime Paris properties, from French real estate company Terreïs. The seve

Emmanuel Verhoosel
Verhoosel: global head of real estate at Natixis

n-year loan was secured by property accounting for €1.3 billion of the portfolio value and was syndicated to German and French banks.

In January, Natixis provided €650 million, alongside French bank Crédit Foncier de France, to Ampere Gestion and Swiss Life Asset Managers, to finance the borrowers’ Foncière Vesta joint venture, which contains a portfolio of 4,000 French homes.

In June, it partnered with Cheyne Capital to finance luxury hotel owner LHC’s €154 million acquisition of Château La Messardière, a Saint-Tropez hotel. Natixis provided a €110 million senior loan alongside €110 million of mezzanine from Cheyne, to fund the acquisition and refurbishment of the hotel and the full refinancing of an existing loan.

Other French deals this year have included the €225 million acquisition and capex financing of a four- and five-star hotel portfolio in France. In Spain, Natixis provided a €130 million loan to investor Merlin Properties. Last year’s deals included the €115 million financing of a high street retail asset in Milan and the €123 million financing for a Munich office building in 2018.

Two subsidiaries of Natixis Investment Managers – AEW and Ostrum Asset Management – are senior lenders of third-party capital. A joint venture between the two firms is raising its third senior debt fund, targeting a final close of €700 million. The JV provided €500 million of loans in 2018 and a similar volume in H1 2019.

Emmanuel Verhoosel is global head of real estate and hospitality. He joined in September 2018.

Société Générale

  • Senior, whole loan lender

  • Active in France, UK, Italy, Spain, Germany, Austria, Benelux, Czech Republic, Poland

  • Lending volumes: undisclosed

  • Loan book: undisclosed

Société Générale declined to provide its lending volumes or loan book size. The bank’s first-half 2019 results, published on 1 August 2019, show the real estate sector accounted for 10 percent of the bank’s €353 billion corporate portfolio credit exposure, as defined by Basel banking regulations, with the construction sector at 4 percent.

The French bank is known to have recently completed deals in the UK, France, Spain, Italy and the Czech Republic, as well as pan-European lending.

In June, SocGén partnered with UniCredit and Erste Group to refinance Czech developer CTP’s Czech portfolio with a €1.9 billion facility. The deal, which refinanced €1.6 billion of debt on 200 individual buildings for seven years and provided debt for projects due to be completed, was heralded as the largest real estate debt transaction in central and eastern Europe to date.

In March, the bank was sole underwriter of the £615 million (€670 million) acquisition financing of four Grange hotels in London. The four hotels were bought by London-based investor Queensgate Investments in the same month in a deal reported to be worth around £1 billion.

Also in March, it led the €545 million financing of a pan-European portfolio of logistics assets, bought by a sovereign wealth fund.

In December, SocGén partnered with Bank of America Merrill Lynch and Santander in a €1.9 billion loan to fund Blackstone’s acquisition of the Spanish SOCIMI Testa.

“There is a continuing appetite from our institutional clients for core assets across Europe because they are following long-term holding strategies and can accommodate tight yields as commercial real estate still favourably compares to other asset classes,” said Jerome Gatipon-Bachette, Paris-based global co-head of real estate structured finance.

He added that opportunistic investors are also looking for higher yields by acquiring properties that need to be repositioned.

THE NORTH AMERICAN BANKS

Bank of America Merrill Lynch

  • Senior, whole loan, mezzanine lender

  • Active across Europe

  • Lending in 2018: undisclosed

  • CMBS issuance so far in 2019: €552.9m

  • Loan book: undisclosed

Bank of America Merrill Lynch declined to provide its lending volumes or loan book size. But, judging by the volume of deals it is known to have closed since the last top 40 was published in October, the US investment bank remains a significant source of finance in the European real estate market.

While last year’s transactional volumes did not reach 2017’s level, Matthias Baltes, head of EMEA commercial real estate structured finance, says: “Q4 2018 was one of our busiest quarters in many years, with deals from Portugal to Finland.”

BAML has been an active player in the revived commercial mortgage-backed securities market, with two transactions in 2019 at the time of publication. In April, it arranged a €237.1 million securitisation of a single loan provided to Colony Capital, secured on French properties. The highest rated tranche of the Taurus 2019 FR transaction was priced at 90 basis points.

Matthias Baltes
Baltes: leads BAML’s European real estate team

In June, the bank issued the €315.8 million Erna securitisation against a portfolio of mixed-use Italian properties. The transaction securitised four loans secured by a portfolio owned by TPG Sixth Street Partners.

In December, BAML issued a fresh securitisation of Blackstone’s The Squaire office building at Frankfurt airport, totalling €475 million. The bank had originally financed the property with a €445 million loan in 2015, which was securitised.

Other recent deals included its role as one of five banks that arranged the £750 million bond which refinanced Unibail-Rodamco-Westfield’s Stratford City shopping scheme in London. In December, it took a participation, understood to be between €750 million and €1 billion, in the €2 billion financing of Blackstone’s acquisition of the Spanish residential company Testa.

Citi

  • Senior, whole loan, loan-on-loan lender

  • Active across Europe

  • Lending in 2018: $4bn

  • Lending in H1 2019: $2bn

  • Loan book: undisclosed

Around 90 percent of Citi’s European real estate lending volumes in 2018 and the first half of 2019 were accounted for by senior loans, according to the bank. Its lending during the period was across the UK, Ireland, Spain, Sweden and the Netherlands.

The US investment bank has gained a track record in financing properties in the UK’s student accommodation sector in recent years. It provided around £1.3 billion (€1.5 billion) in the sector in the 12 months prior to our last top 40. The bank has continued to lend into the student housing market, with an £840 million loan for accommodation provider IQ in October, which refinanced two loans secured by around 25 properties, reflecting a 65 percent loan-to-value ratio.

In the same month, it financed the acquisition of a London-based prime serviced office company, London Executive Offices, for around £300 million. The flexible working group was reportedly bought by an Asian family for around £475 million, according to Sky News.

Citi also financed the take-private of a large office company, Technopolis, in the Nordics for more than $1.2 billion in May. The deal followed the acquisition of the Finnish company by a company owned by Kildare European Partners II for €730 million, agreed last August. The deal followed Citi’s role in the financing of Blackstone’s purchase of the Finnish Sponda office platform.

In April, Citi provided a €200 million loan secured by Irish single- and multi-family residential assets.

Wesley Barnes leads the lending team from London. The team also includes Omar El Glaoui and Russell Gould.

Goldman Sachs

  • Senior, whole loan lender (investment bank’s Real Estate Finance Group); mezzanine, whole loan lender (merchant bank’s Real Estate Principal Investment Area)

  • Active across Europe

  • Lending in 2018 and H1 2019 (REFG): £3.3bn

  • Lending in H1 2019 (REPIA): $734m

  • Loan book: undisclosed

Goldman Sachs lends against European real estate from two parts of the business. In the investment bank, the European Real Estate Finance Group, led by Jan Janssen and Andrea Bora, operates an originate-to-distribute model. In the merchant bank, the Real Estate Principal Investment Area, led in Europe by Jim Garman and Richard Spencer, lends mainly from its Broad Street Real Estate Credit Partners III global fund, which closed on $6.7 billion in January 2018.

Richard Spencer
Spencer: co-head of Goldman Sachs’ merchant bank’s property business

REFG has been a key player in Europe’s commercial mortgage-backed securities market. In 2018, it issued three CMBS deals totalling £830 million (€896 million). In 2019, it arranged a €264 million Dutch CMBS – Kanaal CMBS Finance 2019 – in Q1. This was followed in Q2 by a £283 million CMBS, collateralised by UK cold storage facilities – Cold Finance 2019 – the first deal of its kind.

REFG is also understood to have increased the volume of loans held on its balance sheet and remains active in the syndication market. In November 2018, it provided a £200 million loan-on-loan financing to Blackstone Real Estate Debt Strategies for the St Giles Circus scheme in London. In October 2018, it provided €248 million to Bain Capital Credit to finance the first Greek secured non-performing loan portfolio transaction, Project Amoeba.

REPIA, meanwhile, is understood to have committed more than $1 billion of its latest fund in Europe, mainly in large-ticket mezzanine and development financing deals. In April, it provided £118 million to investor Apache Capital for a build-to-rent tower in Birmingham. It also provided £185 million to Auriens and Zenprop for a retirement living project in London.

Other deals included a €145 million mezzanine loan as part of a take-private of a Nordic flexible office company; a €155 million loan for a development in Dublin; and a £60 million mezzanine loan to Blackstone for the acquisition of a portfolio of UK last-mile logistics.

Morgan Stanley

  • Senior, whole loan, mezzanine, loan-on-loan lender

  • Active across Europe

  • Lending in 2018: $15bn

  • Lending in H1 2019: $4bn

  • Loan book: undisclosed

US investment bank Morgan Stanley has been a major player in the European real estate lending market in recent years, through a combination of large secured loans and providing debt to support property loan portfolio acquisitions.

The bank did not disclose the size of its real estate loan book, but it wrote $6 billion of loans secured by property in 2018. Along with significant volumes of debt provided in the loan-on-loan market, Morgan Stanley’s 2018 European total stood at around $15 billion.

In the first half of 2019, including direct property lending and real estate loan-on-loan deals, the bank provided around $4 billion in transactions across eight European countries.

Morgan Stanley has been an active participant in the revived European commercial mortgage-backed securities market, with two transactions closed so far in 2019 at the time of writing. In May, it launched a £236.4 million (€261 million) UK CMBS deal, which securitised a loan written to Blackstone and M7 Real Estate, financing 112 industrial units.

In 2018, the bank issued five CMBS deals, including Salus (European Loan Conduit No 33) DAC, which securitised a £367.5 million single loan secured by the 36-storey CityPoint office tower in the City of London, which is owned by Canadian property giant Brookfield.

In other deals, Morgan Stanley closed a £750 million refinancing of the Chapter portfolio of UK student housing assets during Q2.

The European commercial real estate lending team is run by Stephen Dyer, who reports to Niall O’Rourke, the former head of European real estate, now based in New York.

RBC Real Estate Capital Partners

  • Senior, stretch senior, mezzanine, development, loan-on-loan lender

  • Active across Europe

  • Lending in 12 months to July 2019: €1.4bn

  • Loan book: undisclosed

RBC Real Estate Capital Partners did not disclose 2018 and H1 2019 lending figures, although it did tell us it provided €1.4 billion of loans in the 12 months to July, which was in line with the €1.3 billion reported for the 12 months to August 2018 in the previous top 40.

Royal Bank of Canada’s real estate lending business said it closed seven deals in the first half of 2019, equalling the number of transactions completed in the whole of 2018. Six of the H1 deals were primary originations, of which two were development loans. A spokeswoman added it closed another construction facility in July and, at the time of publication, had seven transactions due to close by the end of September.

The bulk of its loan book comprises loans secured by stabilised property portfolios, although the bank selectively writes development facilities in sectors including logistics and multifamily residential.

In May, RBC was sole lender of a £112 million (€122 million) acquisition and development facility to Delancey Oxford Residential, APG and Qatari Diar. The loan will finance the Middlewood Locks scheme, an 825-unit build-to-rent residential development in Manchester. In March, the bank was the sole lender in a €300 million development and term facility to GLP-Gazeley to finance the build-out of GLP Europe Development Partners I logistics portfolio, which initially comprises 12 properties in the UK, Germany and France.

RBC Real Estate Capital Partners is part of RBC Capital Markets and is led in Europe by Axel Brinkmann. Globally, the group, which was launched in 2011 and is overseen by Kathryn Ogden, has originated almost C$30 billion on its balance sheet.

Wells Fargo

  • Senior, development lender

  • Active in the UK and Ireland

  • Lending in 2018: £2.1bn

  • Lending in H1 2019: £612m

  • Loan book: £9.3bn

US bank Wells Fargo lends to commercial real estate in the UK and Ireland from its London office. Its 2018 lending was slightly up on 2017 at £2.1 billion (€2.3 billion).

A notable area of growth in the last year has been the bank’s ‘beds’ sector lending business line, which now accounts for almost 20 percent of Wells Fargo’s European real estate lending book, of which a large component is accounted for by development facilities.

Dublin
Irish loans: comprise 10% of Wells Fargo’s European loan book

In December, the bank provided a £55 million development loan to student accommodation REIT GCP Student Living, to fund the construction of a scheme in Brighton. The bank had previously provided a £45 million credit facility to the same borrower. In the purpose-built private rented housing sector, Wells Fargo provided a £67 million loan to Heitman for two schemes in Liverpool and Manchester in December.

The bank’s focus on accommodation properties has also included its announcement, in May, that it would enter the UK social housing market.

Wells Fargo has also increased its presence in the Irish market, which now accounts for around 10 percent of its property loan book. Deals included an €81 million loan in February to Hines and APG Asset Management to finance the Cherrywood build-to-rent residential scheme in Dublin.

Also in Ireland, the bank took a €90 million participation in a €320 million unsecured revolving credit facility provided to listed investor Hibernia REIT in December.

A stand-out deal since the last Top 40 edition was Wells Fargo’s £150 million participation in the financing of two buildings at Argent’s King’s Cross Central development in London. The loan, which was provided in December alongside HSBC and Helaba, was heralded as the first loan provided for an office development in the UK that meets the green loan principles drawn up by the Loan Market Association in March 2018.


Click here to access Part 1 and Part 3 of Europe’s Top 40 Lenders list