France replaced the UK as the most active European market for syndicated real estate loans amid the slowest first six months of a year since 2013.
The latest research published by Dealogic shows that syndicated borrowing totalled €16.5 billion in H1 2017, the lowest H1 volume since €7.1 billion in 2013. During the first six months of 2017, just 79 syndicated deals were closed, a 25 percent year-on-year drop.
“The UK’s decline, both in deal and lending activity, is striking but unsurprising given its advanced property cycle, slowing economy and political uncertainty,” commented Peter Cosmetatos, chief executive of CREFC Europe. “While the Brexit effect has shaken Britain, the rise of the French market is noteworthy. It remains to be seen whether the French cycle is reaching its peak, or whether renewed optimism under President Macron will give it a new lease of life.”
In the UK market, volumes fell from €7 billion to €3 billion year-on-year, with deal activity dropping by 56 percent. In contrast, France’s volumes increased by 33 percent year-on-year to €5.4 billion.
This boom in volumes has made France the largest loan syndication market for the first time since Dealogic began compiling the league tables ¬– it now holds a 32 percent share of total EMEA’s loan syndication volumes.
The reduction in syndicated deals reflects growing uncertainty across the eurozone created by Brexit and broader political and economic risk, the report said.
Natixis topped the league table as the most active bookrunner across EMEA, with €14.47 billion completed across 11 deals. The French bank was followed by German lender LBBW, which closed €995 million in syndications. Crédit Agricole CIB also played an important role with €995 million, along with ING, which had syndications worth €731 million in H1 2017.
Dealogic’s league tables also specified the volume of syndicated lending which was non-recourse – 57 deals, equating to €9.5 billion of volume and accounting for 57 percent of overall business.
LBBW ranked first among syndicated bookrunners of non-recourse loans, having closed two deals totalling €855 million. Santander and Natixis were also significant lenders arranging non-recourse deals in the first half of the year, with volumes totalling €641 million and €619 million respectively.