Lloyds Bank lending to commercial real estate shrank by only 4% to £8.6bn in 2016 despite sharp falls in transactions in the broader market.
The bank called it a strong performance in the face of market volumes that fell by about 30% last year.
In the first half of 2016, loan origination to UK property fell by 13%, according to the De Montfort property lending report.
Bank of England data also showed that outstanding loans to property development made by UK banks fell by 7% in 2016 as traditional lenders regarded the industry with extra caution.
Despite this, Lloyds launched its £1bn Green Lending initiative last year. The initiative provides development loans with a discount of up to 20bps if the developer meets certain green requirements such as improved energy efficiency. It has seen £70m of loans issued so far, with the biggest, at £39.7m, provided for the University of the West of Scotland’s Hamilton International Technology Park.
At the end of the year, Lloyds led Lazari Investments’ £409m refinancing, providing a £118m, 10-year loan through its subsidiary Scottish Widows. The remaining £291m was issued in a club deal involving Lloyds, Met Life and Royal Bank of Scotland on a five-year term.
John Feeney, managing director and global head of commercial real estate at Lloyds, said: “In 2016 we distributed far more UK CRE risk than any other bank, which places us in a strong position to source sometimes volatile liquidity.
“Our prudent approach keeps us focused on quality assets and new opportunities, and on working with the industry’s most expert sponsors.”
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