Austrian bank BAWAG has built up a property loan book worth around €900m since its launch 18 months ago.
Jürgen Fenk, MD and head of international commercial real estate, said the bank was targeting deals ranging from €25m-€70m bilateral loans and participation in clubs, to lending up to 75% loan-to-value levels for the right deal.
Fenk said about 65% of the book was new lending and 35% secondary performing loan buys, “where we are interested in refinancing at maturity – other-wise you would have exit risk”. The bank’s main markets are Germany, the UK and France, but BAWAG has bought from UK banks in Spain.
BAWAG is not funded through the pfandbrief market but through retail deposits. Fenk said: “Our job is to invest our deposit funding in a higher-return environment. The bank is also doing this in its corporate debt business.
“Pfandbrief-driven lenders focusing up to 50-55% LTV ratios get a certain margin for it. If you can provide leverage that is a bit above that you can get a little bit more.”
BAWAG’s most recent UK deal was funding Blackstone’s £214m Teal distribution portfolio purchase on a pari passu basis with Deutsche Pfandbriefbank. Fenk’s team is based in Vienna and has grown from two to 11, including managing directors Marie Fernandez and Tim Jones.