EXPO Real: Bayern opens Dutch property-only bank

Bayern LB, the Munich-based bank noted for its real estate focus, has taken an important step forward with the opening of a branch in Amsterdam, its fifth branch outside Germany after London, Paris, Milan and New York.

Speaking at EXPO Real, Christoph Schmitz-Wenzel, managing director and head of real estate Amsterdam at Bayern LB explained that, uniquely, this branch would be solely focussed on real estate lending. “The idea is to increase our Dutch customer base: we’re following our customers’ preference for a bank with a base in the market.” Already the Amsterdam business has €1.2 billion of assets making it the bank’s second-largest real estate business after Germany in Europe. The target is to grow this by €200 million per year.

Christoph Schmitz-Wenzel.

Almost all of this is in the residential sector. “It’s a stable asset class and one where we’re a bit underweight,” explained Schmitz-Wenzel. “Residential is less volatile than other real estate sectors and it’s a sector we have huge experience of in Germany.”

And it is a sector underpinned by strong demographic trends. “Demand for residential will not reduce,” Schmitz-Wenzel asserted. “Structural excess demand means it’s a long-term product.”

Residential’s performance over the past year underlines this resilience: “Other classes have seen large falls in value but in Dutch residential the fall has been relatively small,” he said. “On the way up regulation prevented excessive inflation and strong demand has restricted the fall in values.”

Globally Bayern LB now has €30 billion in real estate loans, 50% in Germany and 50 % across the rest of Europe and the USA. “Although the name sounds regional we’re actually very international,” observed Schmitz-Wenzel.

by Graham Parker