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‘Safe harbour’ Germany drives MünchenerHyp’s lending increase

The bank recorded €1.9bn in fresh CRE business last year, with solid activity in the UK, Spain and the Netherlands also contributing to the 13% year-on-year increase.

German mortgage bank Münchener Hypothekenbank wrote €1.9 billion of new commercial property lending in 2017, 13 percent up from the previous year.

MünchenerHyp provided €1.3 billion of new lending in Germany with the remaining €600 million lent mainly in Europe.

The bank said the increase was due to a “sound” property environment in target markets, particularly in Germany, seen as a “safe harbour” by investors. In international markets, the UK, Spain and the Netherlands also contributed to the increase. In addition, the lender’s return to the US market nudged up new lending volumes, it said.

MünchenerHyp also noted its new commercial property finance business benefited from the bank’s new syndication strategy, through which it acted as the underwriter for larger loans with, generally, more attractive margins. The bank syndicated a volume of about €200 million last year.

Total new property lending topped €5 billion last year, up by 2.5 percent from 2016. The bank’s new business for private residential property financing increased last year to €3.2 billion, up 3.2 percent year-on-year.

The bank expects positive demand for property financing in 2018, as interest rates “will remain attractive”. However, competition in the property finance business will intensify even further, it said.

“The overall conditions are becoming more demanding. However, we anticipate that even in this environment we will be able to continue our growth strategy,” said Louis Hagen, chairman of the bank’s management board.