H1 European syndication volumes dip to three-year low

The European syndicated real estate loan market had its weakest first half of a year since 2013 during H1 2016, according to new figures compiled by financial data provider Dealogic.

Syndicated real estate loan volumes totalled €20.7 billion in the EMEA region during the first six months of this year, the lowest first-half total since €7.1 billion was transacted in H1 2013. The H1 2016 total was down 41 percent from €34.8 billion during the same period last year.

“The difference in the market from the heady days of 2015 is striking, with the UK’s EU referendum no doubt playing a part in falling levels of activity this year,” said Peter Cosmetatos, chief executive of the Commercial Real Estate Finance Council (CREFC) Europe, which backs the research.

The number of deals being signed fell by a fifth compared to the same period in 2015. Only 84 syndicated real estate financings were closed during the six months.

Excluding loans written to REITs, which are typically unsecured, H1 2016’s syndicated volumes stood at €14.9 billion, a 7 percent fall from 2015’s H1 total of €16.1 billion. The number of non-REIT deals dropped to 64 transactions compared to 75 in the same period last year.

ING was the most active book-runner and mandated lead arranger in the market, Dealogic’s league tables showed (see below). The Dutch bank was book-runner in €1.588 billion of syndicated loans, excluding REIT financings, achieving more than 17 percent market share. “Our commitment to this market is absolute,” said ING’s managing director of syndicated finance, Jean-Maurice Elkouby.

Bank of America Merrill Lynch (BAML), BNP Paribas and Natixis also featured strongly in the tables.

The largest syndicated deal in the first half of 2016 was a €1.32 billion financing for Spanish property company Metrovacesa by ING, Goldman Sachs and JP Morgan. It was followed by another Spanish deal, a €755 million financing of GMP Property Socimi by a club of banks.

Two Finnish deals featured in the top five transactions; a €600 million club financing for investor Sponda and a €575 million loan by BAML to finance Logicor’s investment in the country. Another major deal was a €575 million financing by Turkish bank Yapi Kredi and Unicredit of a portfolio of shopping centres in Turkey owned by Multi.

The UK accounted for 30 percent of the market, although activity was down 51 percent year-on-year to €6.3 billion. German volumes dropped to €782 million from €6.7 billion, although the vast majority of the H1 2015 total was in a single €6.25 billion financing of residential landlord Vonovia, formerly Deutsche Annington.

Dealogic has been publishing its syndicated real estate finance tables since 2014, supported by CREFC Europe which is keen to see the research improve transparency across the lending market. The latest research was collated based on submissions from more than 25 lenders.