BayernLB still ready to lend despite economic headwinds
The fact that there is still equity allocated to real estate is cause for optimism, even though the economic environment is currently difficult for both the banking and real estate sectors owing to interest rates said BayernLB’s global head of real estate Alexander Huber.
In an interview with Real Asset Insight, Huber said that when interest rates level out buyers and sellers will establish price levels and transaction volumes will increase.
There are differences between the different property sectors and construction is likely to remain difficult this year but there is a more positive outlook for logistics and residential.
However, there is still a question mark over the office sector while the type of space required is determined and the impact of ESG is assessed. The outlook for retail should be more promising because the big adjustments were made there last year.
Bayern LB is still in the market and looking to expand internationally, Huber said. “Our home turf is Germany but we would also like to increase our international share where we have offices, in Milan, Paris, London and New York – currently 40% of the firm’s business is international we would like to grow that.”
“Overall we would still like to grow our real estate loan book,” he said, even in the knowledge that this year might be a challenge and that it will be a year of housekeeping, looking to manage existing loans.
Please click on the video above to watch the full interview or listen to the podcast below.