Lloyds raises its targets for real estate lending in 2013

Lender is believed to have set £2.5bn target for global corporates team

Lloyds Banking Group plans to increase lending on real estate this year, in a boost for the debt constrained market.

The bank’s ‘mid-markets’ real estate team, headed by Gabrielle Berring, has told lending advisers that it has a much higher target this year, while the global corporate lending team’s target is believed to be £2.5bn.

Berring’s team focuses on private property firms, entrepreneurial investors and some plcs. Barry Fowler heads the global real estate corporate lending arm, which lends to REITs and Lloyds’ largest property clients.

It is thought that cheaper funding and good progress in shedding impaired property loans has cut the bank’s cost of capital, making new lending more attractive than last year.

Richard Heath, head of corporate real estate, said: “We are committed to supporting existing core real estate clients and are also looking at opportunities to work with new clients, as we seek to grow our core business.

“These need to be the right opportunities and we are pleased to be able to play our part in supporting the real estate market and wider economy.”

Meanwhile, RBS’s real estate corporate lending business is looking to lend about £6bn in the UK this year. See ‘Banks team up to refinance regional property assets’.

Andrew Goodbody, Montagu Evans’ debt advisory head and vice-president of the Association of Property Lenders, said: “More lenders will be active in 2013, including insurance companies, debt funds and banks.

“The focus on prime central London assets must change if all the capital is to be deployed. I expect some lenders to increase leverage and look to fund more secondary/value-added properties for experienced sponsors. “More secondary lending is badly needed if the market is to move forward this year.”