Frankfurt-based Allgemeine HypothekenBank and Munich-based Münchener Hypothekenbank are both trying to break into a market already crowded with German lenders.
Allgemeine set up a representative office in London earlier this year with the aim of growing its UK business.
The Frankfurt bank has joined other lenders in syndicated loans over the past few years, and it is now aiming to build up its own loan book as well. Münchener does not have a London office but has appointed a director, Dr Peter Ditges, to win business in the UK. So far, the bank is thought to have lent €€50m (DM100m) in the UK.
Anthony Legg, general manager of Allgemeine’s London office, said he was under no pressure to build up a loan book by undercutting competitors.
“We don’t come into this market in an aggressive way. We’ve built the business very conservatively over the past few years and I see no reason to depart from this strategy in the foreseeable future.”
He said Allgemeine prefers to lend from £5m, mainly on investment deals, but would consider backing prelet developments.
German banks are the largest lenders to UK property companies, and stiff competition has allowed borrowers to secure good loan deals.
Last week, HBV Real Estate Capital, the biggest German lender, announced plans to double its £2.3bn loan book.
