ESG compliance centre stage as lenders query RE values

This year is likely to be marked by uncertainty as buyers and vendors struggle to find the right price for assets and lenders share the mood.

They will “probably not be very bullish so I don’t think there’ll be growth in lending,” said Berlin Hyp’s head of international real estate finance Assem El Alami.

He envisages contraction of the traditional lending market, although this will create opportunities for alternative lenders to fill the gap.

The Berlin Hyp view of the sector hierarchy has changed little, Alami added, although pricing will have changed. “We’re very keen on multi-family, we’re very optimistic when it comes to core office buildings, and a bit more conservative on retail,” he said.

Transformation for ESG compliance is one key area where the real estate and mortgage bank will concentrate. “I think we have a focus on, and we’ll try to develop that side more, how to transform non-ESG compliant buildings into ESG-compliant buildings, knowing of course that the initiative has to come from our clients, not from us.”

Transformation loans are not yet a major part of the business, but they should be, he said. “If we want to talk about the war against climate change, that’s going to be fought in existing buildings not so much in new buildings.”

Please click on the video above to watch the full interview or listen to the podcast below.