Top 40 European lenders, part 1: The UK and German banks

Top 40 European lenders, part 2: The other European and North American banks

Top 40 European lenders, part 3: The insurers and debt funds

A raft of lending organisations are keen to provide finance to Europe’s real estate investors. In the first of three installments, Alicia Villegas, Lauren Parr and Doug Morrison highlight those leading the pack.

Welcome to Real Estate Capital’s Top 40 European Lenders 2017. Now in its fourth year, this list is intended to highlight those most actively providing liquidity to Europe’s property markets today.

Here, in the first of three installments, we highlight the UK and German banks that have made the list.

A few notes on methodology. Firstly, this is not a ranking – the Top 40 intends to capture the organisations most active in their areas of the market which consistently provide loans. It is not possible to make direct comparisons between the performances of German Pfandbrief banks, investment banks and mezzanine funds, for instance. While the first group might pump out senior debt worth billions each year, the second might provide smaller volumes, but in more complicated or challenging situations, while the third group might provide relatively small amounts of high-yielding debt which few are willing to risk.

Secondly, in a break with previous years, the list has been arranged by lender type, in a bid to separate the major lenders into their component groupings: the banks – split further by their place of origin; the insurance companies that have become established lenders; and those debt fund managers not affiliated to either group – typically comprising businesses within investment managers, or boutique firms.

Some of the categories are not clear-cut. A few of those included in the insurance lender list also have significant third-party debt-fund businesses, as do at least two of the banks. However, organisations are limited to one entry each, categorised by the overriding nature of the company.

Thirdly, in a bid to form an unbiased rundown of the market, the Top 40 has been compiled following rigorous research and after garnering the views of many senior industry figures. Some may contest our selections. If so, Real Estate Capital would welcome the feedback, and the reasons why your organisation should be in the running, at

We hope you find this latest edition of our Top 40 an enjoyable read, and possibly a source of discussion.



• Senior, whole loan, mezzanine and development lender
• Lends in the UK and Ireland
• £6bn (€6.5bn) new lending in 2016
• £16bn loan book

Although the UK’s clearing banks are more selective lenders since the country’s EU referendum result, Barclays’ 2016 total volume was consistent with the previous year. With a team of 150, its property team maintains relationships with a large client base, including major housebuilders.

“We’ve got a very keen eye on the private rented sector” Dennis Watson, Barclays

A headline deal was its role in Terra Firma’s mega-refinancing of its UK housing platform, Annington, in July, which saw the bank act as joint bookrunner on a £3 billion corporate bond issue as well as participating in a £400 million bank lending club. In addition to tackling the maturity profile of its securitised debt and reducing interest rate risk, the deal granted Terra Firma growth capital to invest in the PRS sector.

The residential sector is a particular target, says Dennis Watson, head of real estate in the corporate bank: “We’ve got a very keen eye on and want to increase our support to the private rented sector, whether that’s providing access to mezzanine or equity, as well as helping housebuilders with operational efficiency and developing thought leadership around the topic of PRS.”



• Senior, development, capital markets lender
• Active in the UK predominantly
• £8.6bn new lending in 2016
• £19.4bn loan book

Lloyds’ 2016 lending volume was not far behind the £9 billion completed in 2015, indicating that the bank’s real estate unit remains active despite the slowdown in its core market, the UK. In January, the bank arranged a £409 million financing package for family-owned investor Lazari Investments, combining medium- and long-dated debt alongside three other lenders, secured by six central London properties.

A £118 million, 10-year element of that loan was provided through the bank’s collaboration with Lloyds Banking Group insurer Scottish Widows – a partnership which has closed several deals this year, capitalising on the insurer’s ability to write long-dated debt.

In May, Lloyds wrote its first loan to a standalone private rented sector residential project, with the £17.8 million financing of a scheme in Birmingham. Other development loans have included £47 million to HB Reavis to fund its refurbishment of the Cooper & Southwark office building In London.

The bank’s £1 billion green lending initiative – which awards margin discounts in loans to assets with sustainable credentials – has also produced several loans, most recently a £61 million financing of a redeveloped office building in Birmingham. The largest loan to be issued through the green initiative, and a rare foray into the continental European market, closed in April, with a €600 million syndicated loan to French REIT Unibail-Rodamco.

In August, Madeleine McDougall took the reins of the CRE business following the promotion of John Feeney to head of the bank’s global corporates division.


• Senior lender
• Active across Europe
• €5bn lending in 2016
• €20bn loan book

Headquartered in London, but with an extensive network and history in Asia-Pacific, HSBC has been well-placed to capitalise on the wave of Asian investment into the European markets. The prime example was the joint financing of the Cheesegrater building for Hong Kong’s CC Land in June, alongside Bank of China and ING. Other significant loans to Hong Kong investors in London have closed in the past 12 months.

HSBC financed the landmark Cheesegrater building for its Hong Kong-based buyer

HSBC funds clients across borders, harnessing its knowledge of a sponsor in one region to help it in another. It is one of the most internationally diversified of the UK banks, with a €6 billion continental European loan book.

“The mainstay of what we’re doing is providing senior loans to companies we know well, where we understand the real estate risk,” says Steve Willingham, co-global head, real estate and infrastructure financing. “We’re driven more and more by large institutional investors and cross-border transactions, whilst continuing to support our strong domestic business in the UK and France,” Willingham says.

The bank led Intu’s expansion into Spain throughout 2015 and 2016. Last year, along with AIG and UniCredit, it backed Blackstone and Round Hill’s purchase of a €1bn portfolio of residential properties in the Czech Republic – a market in which it has become more active.

An example of the way HSBC optimises its international network includes the continued funding of Echo Polska, a client listed in South Africa that it deals with in London. The bank has supported several North American pension funds and sovereign wealth funds investing into Poland.

The bank has also been a significant provider of unsecured facilities to REITs, including a role in a £430 million financing of NewRiver in August.


• Senior, development lender
• Active in UK, Ireland and western Europe
• £7bn new lending in 2016
• £26bn loan book

Royal Bank of Scotland wrote around £7 billion of loans across the real estate sector in 2016 – down circa £1 billion from 2015.

The bank’s lending strategy has no annual targets, as it looks through long-term cycles, says Paul Coates, head of real estate finance at RBS.

“We have a lending capacity of between 15 percent and 20 percent of the bank’s commercial balance sheet, which we will deploy with customers when they find the right opportunity,” Coates explains.

In H1 2017, RBS’s property loan book stood at around £26 billion across the UK, Ireland and western Europe. The UK represents more than 90 percent of the bank’s real estate lending business. Strategically, the bank is looking at the country’s build-to-rent sector.

In early 2016, RBS announced a £1 billion commitment to the UK PRS sector. So far this year, the bank has committed more than £300 million to the development of around 3,000 residential units across the UK. Its current pipeline takes it up to around £1 billion, Coates says.

Asked about the growing uncertainty gripping the UK housing market in the wake of the Brexit vote, Coates says this is only one among several challenges. “There are a lot of macro influences on the market, one of which is Brexit. It’s a very simplistic view to say Brexit is the biggest risk.”



• Senior lender
• Active in Germany, rest of Europe and North America
• €9.2bn new lending in 2016
• €27.1bn loan book

Across 2016, Aareal wrote €9.2 billion of new loans, exceeding its expectations for the year, which had been set at between €7 billion and €8 billion.

During the first half of 2017, the bank’s structured property financing segment originated €3.8 billion, putting it behind its progress at the same point last year (€4.4 billion), perhaps reflecting the tough market conditions facing all of Germany’s major property lenders.

A positive development has been the 18 percent increase to 260 basis points of its average gross margins across the €2 billion of new loans underwritten in the second quarter of 2017. Despite considerable competitive pressure in its home market, Aareal boosted its margins on the back of a continued push into high-margin markets such as North America – this market accounted for 44 percent of the bank’s new business during Q2 2017.

Aareal’s 2017 stand-out deal illustrates the bank’s commitment to the property markets in North America: in July, it provided a C$716 million (€476 million) financing for a Canadian hotel portfolio to Leadon International Investments, with the aim to syndicate part of the loan.

With 56 percent of new business originated in Europe, Aareal forecasts a stable performance in most of the region, including in Germany, France, Italy, the Netherlands and Poland.

“We expect a slightly positive development owing to the good economic situation in Denmark and Spain,” says Christof Winkelmann, member of the management board at Aareal and responsible for the markets in the structured property financing segment.
Winkelmann added that the situation in the UK is subject to uncertainty following the Brexit vote.

In the first half of the year, the bank has been most active in hotels and office buildings, with each asset class accounting for more than €1.3 billion in new business activities including refinancings.


• Senior, whole loan and development lender
• Active in Germany, France, Benelux, Poland, Czech Republic
• €6bn of lending in 2016
• €18.1bn loan book

German mortgage bank Berlin Hyp achieved a 6.9 percent rise in new lending volume to €3.1 billion and a healthy 41.4 percent increase in pre-tax profits to €44.4 million in the first half of 2017, despite “fierce competition” in commercial real estate financing and ever-stricter regulatory requirements.

“We do see some lenders going up the risk curve” Assem El Alami, Berlin Hyp

The bank benefitted from the sustained boost to domestic property investment activity that has come from ongoing low interest rates.

In a key transaction this year, it provided the senior funding for the acquisition of Allianz Campus Berlin. Hines, acting for Korean investors, reportedly paid €300 million for the 645,835 square feet office scheme.

Berlin Hyp nonetheless adheres to its motto, “quality over quantity”. As Assem El Alami, head of real estate finance, observes: “We do see some lenders going up the risk curve. We try to stay cautious and if that would mean in the near, or more distant, future we lose market share, then so be it. We remain a conservative lender.”

Given the competitive market, El Alami admits that pricing is an issue – although he suggests that margins for “the very top segment” have stabilised and the outlook for Berlin Hyp is positive. “The opportunities lie for us in projects where we can add value – projects that require expertise in structuring and execution of the transaction.”


• Senior lender
• Active in Germany, France, UK, Italy, Ireland as well as North America, Asia, Australia
• €3.9bn new lending in 2016
• €6.4bn loan book

DekaBank’s €4 billion lending target for 2017 is slightly up from last year’s loan volumes, as the German bank is increasing its loan book with a cautious approach amid a competitive market and geopolitical uncertainties. The lender provides loans ranging from €50 million to €300 million with a maximum maturity of 10 years and a loan-to-value ratio of up to 65 percent, depending on the asset.

King Edward Court: DekaBank financed the home of the London Stock Exchange

It syndicates its largest loans with the aim to hold up to €125 million. A landmark deal in December 2016 illustrates this strategy: the bank wrote an almost £160 million senior loan to finance Madison’s acquisition of a 50 percent stake in King Edward Court, the headquarters of the London Stock Exchange. DekaBank then sold down about £50 million, holding now £110 million.

“Germany remains a strong market for us but competition is quite high. We like the idea to be in other countries which provide slightly higher margins, such as the UK,” says Aren Wegner, head of real estate lending in Europe.

The bank continues to selectively look to diversify real estate lending sectors. Apart from offices, which are its main focus, it is also paying special attention to logistics and retail – in July this year, it was co-underwriter of a £488 million club deal to refinance the Merry Hill shopping centre for Intu, the UK regional mall owner.

In September, it joined forces with BNP Paribas to lead a €625 million financing of Hammerson and Allianz Real Estate’s Dundrum mall in Dublin.

Another major financing was its €290 million February funding of the purchase of the Paris headquarters of cosmetics giant L’Oreal for a Korean investor consortium, led by Hyundai M&F Insurance.


• Senior, mezzanine, whole loan, bridge, development and loan-on-loan lender (investment bank); senior, whole loan, mezzanine and development lender (Deutsche Asset Management)
• Active in western Europe
• €3bn new lending in 2016 (investment bank), plus €270m-plus through Deutsche AM
• Investment bank loan book undisclosed; €760m for Deutsche AM

The outlier among the German banks listed here, Deutsche Bank primarily finances real estate through its investment banking business, usually putting it in competition with the US investment banks rather than its Pfandbrief bank compatriots. In addition, the bank’s asset management business is a lender of third-party capital. Further, both units are headquartered in London, rather than Germany.

Deutsche Bank Twin Towers, Frankfurt

The real estate team within the investment bank, led by Roman Kogan, has already written €2 billion of real estate loans across Europe so far this year, more than half of last year’s total lending of €3 billion. Opportunistic deals, along with increased refinancing activity, have contributed to business. However, lending volumes are down when compared with the last three years, which experienced €4 billion to €5 billion per year. The bank is active across all of Europe and “consistently” finds opportunities in its largest markets – especially in Italy, Spain, France and Germany, says Kogan.

In June, the bank closed its largest deal of the year to date; it was lead arranger on a €1 billion-plus senior financing of Blackstone and M7 Real Estate’s €1.28 billion acquisition of a German, Dutch, French and Danish industrial portfolio from Hansteen. Another landmark loan this year was the €125 million ground-up construction financing it wrote for Kennedy Wilson’s Capital Dock development in Dublin in May.

Deutsche Asset Management’s third-party real estate lending business operates independently from Kogan’s team. Led by Andrea Vanni, it has rapidly grown its loan book through the real estate debt funds it launched two years ago, along with a separate €750 million mandate it secured from German pension fund Bayerische Versorgungskammer (BVK) last November.

Over the past year, the asset manager has deployed around €600 million of its €750 million senior debt fund, and around €800 million of the €1 billion mezzanine fund. The senior debt fund invests only in core, investment-grade loans across Europe, with margins ranging from below 100bps to 250bps. The mezzanine fund, which can invest in the US and Europe, aims for returns ranging from 5 percent to 7 percent.

“Our strategy is to focus on core locations, with a value-add component as long as locations are also core. In addition, some of the assets we have are trophy buildings,” says Vanni, head of European debt investments.


• Senior, whole loan, development lender
• Active in Germany, UK, France, Benelux, Poland and Spain
• €4.5bn new lending in 2016
• €12.6bn loan book

Last December, Deutsche Hypo completed the largest lending deal in its history, leading the €960 million refinancing of an office-led portfolio owned by German real estate investor DIC Asset AG. It provided a €510 million share of the debt, part of which has been syndicated, with Berlin Hyp contributing €250 million and HSH Nordbank issuing €200 million.

“We’ve made a good name for ourselves in the structuring of portfolio transactions in recent years,” says Thomas Staats, head of origination, international property finance.
Deutsche Hypo has expanded its branch network since last year, adding offices in Düsseldorf, Berlin and Madrid. It pulled back from the Spanish market in 2013, but now sees “positive development of the Spanish investment market”, according to Staats. “The plan is to grow existing activities and to create a notable loan book within the next five to six years,” he says.

The bank reported €2.11 billion in newly originated commercial real estate loans in the first half of this year, up 17.4 percent from H1 2016. Its new business volume was partly boosted by residential financing in the Benelux, where the bank wrote €358 million of loans.

In the UK, Deutsche Hypo recently teamed up with pbb Deutsche Pfandbriefbank to finance HB Reavis’s development of 33 Central, an office scheme in the City of London, with a £127 million loan.


• Senior, development lender
• Active in north-western and central Europe
• €10.4bn new lending in 2016
• €35.9bn loanbook

Helaba has been expanding its business in various jurisdictions this year, including central Europe where it has taken advantage of a heavy influx of investors, especially from Korea, buying regional assets in Poland and the Czech Republic. “We understand the needs of Asian investors, having worked with them in western Europe,” says Michael Kröger, head of international real estate finance.

“We understand the needs of Asian investors” Michael Kroger, Helaba

Recently, the bank led the more than €370 million financing of the Warsaw Spire office complex on behalf of Belgian developer Ghelamco.

Helaba has also increased its efforts in northern Europe, adding headcount in the Stockholm office it opened last year. “Institutions like this market; it’s very lender friendly and not many international banks have returned since the crisis,” says Kröger.

The bank wrote an €80 million loan for the acquisition of an office complex in central Stockholm by a UK investor in the first quarter of 2017, and co-underwrote the financing of a large shopping centre close to the city’s old airport for an international fund in Q2.

The bank, which hired Christian Schmid from Aareal to replace Jurgen Fenk as board member at the beginning of October, has been increasing its debt capital markets business by syndicating to banks, institutions, debt funds and its owner-base savings bank sector. It wrote less new business in the first half of 2017 (€4.2 billion) than in the same period of the previous year, amid a competitive market, although the 14 percent fall was set against a year of outperformance in 2016.

In its core home market, the bank is seeking to combat tight margins by targeting repositionings, developments and complex portfolio financings. It provided Gazeley with a €136 million loan in early 2016, partly to develop a large logistics facility in northern Germany.

In the UK, Helaba has closed circa €850 million of deals in the past 12 months, meanwhile, in France, the bank is in the process of sealing a deals worth several hundred million euros in Paris.


• Senior, whole loan, development lender
• Active in core markets of Germany, UK and North America, plus western European portfolios
• €6.5bn new lending in 2016
• €23bn loan book

LBBW has written €3.4 billion of new loans in the first half of 2017, with the aim of generating new business in the range of €6 billion to €7 billion by year end.

The bank’s 2016 lending volumes decreased by €1 billion to €6.5 billion when compared with 2015, but Thorsten Schönenberger, a member of LBBW’s board of managing directors, says he is “satisfied” with the new business generated from last year to the present, which is being driven by large tickets of up to €500 million.

Despite “high competition”, the bank remains focused on Germany, its core market, along with the US and the UK. Its lending strategy has not changed either: the German bank continues to be a conservative lender backing well-known sponsors with senior debt on core assets in prime locations.

Following the Brexit vote, LBBW is confident in the UK market, where it holds a loan book of €2.5 billion. “We still look at Canary Wharf-style assets. But, of course, we are more selective and conservative in our assessment of UK assets,” Schönenberger says.

LBBW is focused on increasing its lending activity in France and, further afield, will open a new office in Toronto next year. “Our expansion is organic, it isn’t driven by the lack of business opportunities in the existing markets. Instead, we want to back our sponsors in the markets [in which] they are being active,” Schönenberger says.


• Senior, development lender
• Active in Germany, UK, France, CEE, Nordics, Spain, Benelux, US
• €9.5bn new lending in 2016
• €27.1bn European loan book

Pbb Deutsche Pfandbriefbank has remained a high-volume lender across several European markets in the past year, with a renewed focus on the US market. Its target for 2017 is to deploy €10.5 billion to €12.5 billion across its real estate and public finance business lines.

The German bank originated €4.5 billion in new property loans in H1 2017, which means that volumes remained stable year-on-year. “We are on track in terms of reaching the new business target, but we do expect only a moderate portfolio growth,” says Thomas Köntgen, deputy CEO at pbb.

In H1 2017, Germany accounted for half of pbb’s new property lending business, followed by the UK, the US and central and eastern Europe – where pbb focuses on Poland and the Czech Republic. France is also a relevant market, and has hosted pbb’s largest deal so far this year: a €300 million loan for a mixed-use portfolio of retail and office.

Last year, the bank re-entered the US – a market that accounted for €500 million of newly generated business by H1 2017, and where pbb has seen a “growing new pipeline”.

Following the Brexit vote, the bank has a “conservative risk appetite” for new business, avoiding speculative development in the UK market. “In the UK, we have always provided lower LTV on average than in our portfolio and this trend continues. In the current situation in the UK, we put more emphasis on strong and sustainable cash flows,” Köntgen said.

The other European banks and the North American banks will follow on 27 September, with the insurers and debt funds on 28 September.