The amount of UK real estate debt that was syndicated halved in the first half of the year.
Volumes across Europe fell to their lowest levels since 2013.
The data reflects an overall slump in investment activity and a subdued appetite from buyers of real estate debt. This in turn may affect lenders’ willingness to lend and the pricing of debt.
According to a study by Dealogic, volumes in the UK fell to €6.3bn (£5.4bn) across 20 deals – down by 51% from the same period last year.
Peter Cosmetatos, chief executive of CREFC Europe, said that the UK had posted a larger drop than other European countries, with June’s referendum “no doubt playing a part in falling levels of activity”.
Despite the fall, the UK was still the biggest contributor to syndicated finance with a 30% EMEA market share.
Lloyds was the most active syndicator of loans in the UK during the first half of the year, with €689m syndicated across seven deals, 11% of the market.
Its deals included the sale of half of a £185m loan issued against elements of the O2 arena in Greenwich, SE10, to Industrial and Commercial Bank of China.
The EMEA market was down by 19% year-on-year, with 84 deals signed, totalling €20.7bn.
Although Germany’s volume fell by nearly 90%, from €6.7bn to €783m, the drop was largely because Deutsche Annington Immobilien, now Vonovia, secured a single €6.3bn loan from JP Morgan last January.
With syndicated finance playing a growing role and becoming “the only show in town” in the lending market, with very few CMBS deals issued this year, Cosmetatos said that the report was indicative of the state of real estate lending on a broader level.
The fall was unsurprising, he said, because 2015 was a strong year for the industry and was followed by a period of political and economic uncertainty.
| Biggest EMEA real estate finance loan bookrunners, H1 2016 | |||
|---|---|---|---|
| Bookrunner | Value €m | Deals | % Share |
| ING | 2,330 | 12 | 21.8 |
| Bank of America Merrill Lynch | 1,389 | 8 | 13 |
| Natixis | 606 | 5 | 5.7 |
| UniCredit | 597 | 5 | 5.6 |
| Danske Bank | 553 | 3 | 5.2 |
| Goldman Sachs | 515 | 2 | 4.8 |
| BNP Paribas | 474 | 3 | 4.4 |
| JPMorgan | 440 | 1 | 4.1 |
| Nordea | 433 | 3 | 4.1 |
| Abu Dhabi Islamic Bank PJSC | 359 | 2 | 3.4 |
| Total market | 20.7bn | 84 | 100 |
| Biggest UK real estate finance loan lead arrangers, H1 2016 | |||
|---|---|---|---|
| Mandated lead arranger | Value €m | Deals | % Share |
| Lloyds Banking Group | 689 | 7 | 11 |
| Bank of America Merrill Lynch | 621 | 4 | 9.9 |
| Wells Fargo | 581 | 6 | 9.2 |
| HSBC | 570 | 7 | 9.1 |
| Santander | 539 | 8 | 8.6 |
| BNP Paribas | 481 | 3 | 7.6 |
| RBS | 426 | 5 | 6.8 |
| Barclays | 372 | 5 | 5.9 |
| Credit Agricole CIB | 333 | 3 | 5.3 |
| ING | 327 | 2 | 5.2 |
| Total market | 6.3bn | 20 | 100 |
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