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Real estate the logical choice in Germany’s competitive market

Real estate is the logical choice, even for smaller and mid-sized banks in Germany says Assem El Alami, Berlin Hyp’s head of real estate finance.

The German market is “functional” and competition is ferocious El Alami told Real Asset Media’s Richard Betts. Banks are pushing assets towards real estate because other sources of revenue are more fragile.

“But while finance for real estate is available there is a disparity between high quality, low risk projects and those that are more challenging,” he said.

Funding a small hotel or refinancing a small out-of-town shopping centre will be more difficult than a grade A office asset or residential portfolio.

Meanwhile, Covid has triggered a recession in Germany with negative growth, -6.5%, which is quite severe. But the mechanism of the German economy is allowing people to remain in work and is buying time for the introduction of a vaccine. El Alami expects a 4.5% recovery in 2021 but it will take 2022 and 2023 to make up the remaining ground.

Click on the video to watch the full interview, or listen via the podcast below.