Stable environment!
Market Assessment of real estate financing by Dr. Christoph Husmann, speaker of the management board of HOCHTIEF Projektentwicklung GmbH
(firmenpresse) - All prophecies of doom aside, the feared financing gaps have failed to appear. The environment for the financing of real estate property has proven to be stable in 2013. Dr. Christoph Husmann explains why this development seems to indicate that nothing will change in 2014.
The classic banks have become more cautious in the loan business as a consequence of the financial market crisis. Some institutes have even completely withdrawn from the financing of commercial real estate, for example, the Hypothekenbank Frankfurt previously active as Eurohypo and the Commerzbank. However, the financing gap feared and prophesized by many has not appeared. Other actors have appeared on the scene and have intensified their involvement, for example, the savings banks and the Federal State banks, as well as the mortgage banks and mutual savings banks with their central institutions. The Postbank and the Pfandbrief banks are also involved. They show considerably more willingness to provide financing than some banks. One of the reasons for this is surely that investment customers have turned increasingly to the savings banks and mutual savings banks in the context of the Euro and finance crisis. Their increased investments, in combination with their regional focus, make them strong partners for real estate financing. Some of these institutes are even active nationally. The larger regional savings banks and banks, their central institutions and syndicates are even prepared to finance tickets from EUR 30 million and upwards. Credit funds are becoming considerably more active. However, they tend to concentrate more on portfolio properties. Different than with project development, their financing draws from a one-time request for capital and a defined repayment plan with a large final repayment after many years. The financing of a project development, however, requires a successive credit at call with construction progress and repayment following sale. The point in time for this is not agreed upon definitively, but instead depends upon the market, and can sometimes be on short notice.
Pension funds, insurance companies, closed funds, but also private equities and family offices in the meantime like to invest in project developments, including in the context of a forward deal. However, the latter are especially prepared when the completely developed project corresponds to an absolute core product. Most family offices thereby limit themselves to a volume of between EUR 30 and 70 million. However, for a few there is no project per se that is too large. The closed funds also invest in somewhat smaller tickets with a volume between EUR 50 and 60 million. But here too there are exceptions. Individual acquisition efforts for investments exceeding 100 million Euros have been known. While the pension funds and insurance companies generally limit their investments to EUR 70 to 100 million, or perhaps slightly more, the private equities are happy to invest in project developments with a volume considerably higher than EUR 100 million. Both German and foreign investors are scrimmaging in this field. A significant difference in risk behavior cannot be determined. A certain reserve can only be detected with the closed funds due to the AIFM Directive. For a project developer, those investors are coveted with which they can already arrange for payment parallel with construction during the realization phase. Pension funds, insurance companies and family offices generally don't have a problem with this. All of these circumstances thus ensure a stable financing environment. And we can assume that this tendency will continue.
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HOCHTIEF is one of the most international construction groups worldwide. The company delivers complex infrastructure projects, in some cases on the basis of concession models. The Group operates in the transportation infrastructure, energy infrastructure and social/urban infrastructure segments as well as in the contract mining business. With nearly 80,000 employees and a sales volume of more than EUR 25 billion in FY 2012, HOCHTIEF is represented in all the world’s major markets. With its subsidiary Leighton, the Group is market leader in Australia. In the USA, the biggest construction market in the world, HOCHTIEF is the No. 1 general builder via its subsidiary Turner and, with Group company Flatiron, ranks among the most important players in the field of transportation infrastructure construction. Because of its engagement for sustainability, HOCHTIEF has been listed in the Dow Jones Sustainability Indexes since 2006.
HOCHTIEF Projektentwicklung as a subsidiary of the HOCHTIEF Group has been developing, realizing and marketing real estate projects in Germany and abroad since 1991 and is considered Germany's leading inner-city center developer. Its core business comprises office buildings in downtown locations and areas within easy reach of city centers. It also focuses on residential properties, retail properties, and the development of entire urban quarters. HOCHTIEF Projektentwicklung does not build up any property portfolio of its own but operates as an "interim investor" with the goal of selling the projects to a final investor well-let and as swiftly as possible. With its offices in Germany and Europe, the company makes sure it is close to its clients. Sustainable concepts, prime locations, sophisticated architecture and innovative technology make for value creation and cost reductions.
Gabriele Stegers
Head of Corporate Communications
HOCHTIEF Projektentwicklung GmbH
Alfredstrasse 236
45133 Essen
Germany
Tel.: +49 201 824-2282
Fax: +49 201 824-1728
E-Mail: gabriele.stegers(at)hochtief.de
Datum: 11.12.2013 - 16:43 Uhr
Sprache: Deutsch
News-ID 323490
Anzahl Zeichen: 3816
contact information:
Contact person: Gabriele Stegers
Town:
Essen
Phone: +49 201 824-2282
Kategorie:
Real Estate & Construction
Typ of Press Release: Unternehmensinformation
type of sending: Veröffentlichung
Date of sending: 11.12.2013
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Die Pressemitteilung mit dem Titel:
"Stable environment!"
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HOCHTIEF Projektentwicklung GbmH (Nachricht senden)
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