UniCredit ramps up 2011 target for property lending

UniCredit has earmarked up to €6bn for financing real estate deals this year – a 10-20% higher allocation than last year. But the UK is not one of its core markets as loans cannot go into its pfandbrief programme and the bank is not allocating balance-sheet capacity here.

The German bank plans to invest more in Austria and Germany, where it lent €4.7bn last year – up 85% on 2009. Excluding refinancings,
€2.7bn of this was channelled into Germany; UniCredit expects its German lending to reach at least €3bn this year. The bank will go after core investments, although it is also open to development opportunities in Germany, as long as they are at least 60% prelet. Up to 25% equity will be required by investors.

Meanwhile, Bank Austria, part of the UniCredit group, has €1bn to spend on energy efficient buildings in Central and Eastern Europe. “We especially favour energy efficient developments that take advantage of the decline in land prices,” said senior real estate analyst Karla Schestauber. For such projects it will offer debt on a fully speculative basis. But investors in higher-risk markets such as Russia and Ukraine will be required to provide around 50% equity.

UniCredit recently provided a €215m bilateral loan for Berlin residential company GSW, on a five-year term. The loan-to-value ratio exceeded 65%. The bank’s commitment was part of an €890m refinancing that also included contributions from IBB; Hypo Vereinsbank; Deutsche Pfandbriefbank; Berlin-Hanoversche Hypo; Deutsche Hypo; and Münchener Hypo.