Deutsche Pfandbriefbank said it would continue to increase new lending to real estate ahead of a 2015 reprivatisation deadline.
The “good bank”, born out of Hypo Real Estate, reported a 43% surge in real estate lending, completing 131 deals last year worth €7bn (£5.9bn) in total.
This was split between €5.3bn of new commitments and €1.7bn of extensions longer than a year.
Pbb also said that in 2014 it “expects another marked rise in new business, compared with 2013”, although it forecast pretax profit would drop from €165m owing to a one-off transaction in 2013.
This is not expected to dampen prospects for the bank’s privatisation, which could be carried out through a stock exchange offering or a trade sale. Large banking groups looking for exposure to the UK and German markets could make a play for the bank, which must be sold under the terms of Hypo’s 2008 €102bn bailout.
The UK now accounts for 16%, or €3.5bn, of the firm’s €22.5bn real estate portfolio, up from 14% a year earlier.
The lion’s share of its book relates to its domestic market, with Germany accounting for 54% of its portfolio, up from 51% but steady at €12.1bn.
The sale of legacy European real estate lender Westimmo has recently been resurrected two years after a failed sale as parties bid for its €11.8bn property lending business from German state ownership. It has been reported that Allianz’s PIMCO has considered a bid, as has ING Real Estate Finance; Aareal Bank has pulled out of the process.
Commerzbank is also selling its legacy €4.4bn Eurohypo Spanish commercial property lending business in the Project Octopus process. Lenders including GE Capital Real Estate, Bank of America Merrill Lynch, Santander and Deutsche Bank and AXA Real Estate along with a number of private equity firms are bidding for all or part of the book.
bridget.oconnell@estatesgazette.com
