MIPIM 2012: A total of 21 banks have been included on Savills’ latest list of big-ticket lenders, an increase from 19 in October.
The agent defines “active lenders” as those which have completed at least three deals of more than £30m over the past six months or “are well advanced in realising serious ambitions to do such business”.
Four lenders – AIG, Citigroup, Deutsche Postbank and Lloyds Banking Group – have joined the list since October. Two others have dropped out.
The firm, however, reported that this was only one part of the market as many other organisations were seeking to provide debt finance in one form or another.
The full list, which includes all the UK clearers, eight German lenders, and five insurance companies, is:
AIG
Aviva
AXA
Barclays Bank
Bayern LB
Bawag
Citigroup
Deka Bank
Deutsche Bank
Deutsche Hypo
Deutsche Pfandbriefbank
Deutsche Postbank
Helaba
HSBC
ING REF
Landesbank Berlin
Lloyds Banking Group
M&G Investments
Met Life
Royal Bank of Scotland
Santander
William Newsom, Savills UK head of valuation, said: “There is no shortage of organisations seeking to provide both senior debt and mezzanine. However, the real issues are firstly that lenders are very selective, and secondly, tighter lending terms.
“Of the lenders listed, they are looking to provide finance to selected borrowers with a track record secured against good-quality commercial investment properties let to strong tenants on long-term leases in good locations, preferably located inside the M25.”
The agent also confirmed that loan to values (LTVs) had fallen over the past eight months and interest rate margins had increased by 100bp from circa 225 bp to 325 bp for prime investment.
LTVs against prime investment today are in the region of 55-60% with some banks having difficulty lending above 50%.
Savills said that this opened up increasing opportunities for mezzanine providers and, separately, banks preferring to take participations.
It said there were a further 50 senior debt providers who were active at the smaller and medium-sized ends of the spectrum, with around 20 firms keen to provide finance for residential development, particularly for smaller projects.
Furthermore, Savills said, there were around 30 providers of mezzanine finance, active in both the commercial and residential markets, who had an appetite to fill the gap between a reduced level of loan to value from senior debt providers and the equity slice.
Newsom added: “The number of lenders in the market is encouraging to see, but the further reduction in loan to value ratios means that borrowers may increasingly access the mezzanine market in order to bridge the funding gap.”
