‘I see another record year ahead’

Karin Schmidt-Mitscher, Head of Group Commercial Real Estate and Leasing,Erste Group Bank AG

Caution and discipline bring rewards, as business is booming in office, retail, logistics and residential financing, Karin Schmidt Mitscher, Commercial Real Estate, Erste Group, told Real Estate Day.

Last year was the third record year in a row for the group and 2019 has started on the right foot. ‘We had an incredible January ,’ she said. ‘We have a very good pipeline so I see another record year ahead and I am looking forward to it because it marks our 200thanniversary as  group’. 

Looking ahead to 2020, ‘everyone is on a certain level of alert but nobody is panicking’, Schmidt Mitschersaid. ‘We still see prices increasing also in Vienna, in fact we have seen incredible sale prices in the last few weeks but being a  conservative lender I do not see any problems ahead if values were to come down to a certain extent’.

Erste Group is based in Vienna but covers the entire CEE region including Romania and stretching to the Balkans. ‘We have also started looking at Germany now, following our Austrian and international clients over the border,’ she said. 

‘Our biggest involvement is in office and retail but we also play a role in logistics with some big tickets in the pipeline right now and we also do residential financing as well in Austria, where we have a long-standing tradition, but also in the Czech Republic and in Slovakia,’ said Schmidt Mitscher.

‘We have been always been a very conservative lender and we haven’t changed our strategy, which helped us very much through the crisis,’ she said. ‘Of course we do have certain ratios when it comes to loan to value and debt service coverage’.

Decisions are made depending on the asset class, the region and the location. ‘An office building in Belgrade of course is not comparable to the same office building in Prague or in Vienna,’ she said. 

Erste Group is not ready to jump into alternative sectors that many institutions are now investing in. ‘Not yet,’ Schmidt Mitschersaid. ‘We know the residential sector very well and what we see now is a very big trend for residential for rent, especially in in Prague and Bratislava. We are very familiar with that kind of asset class in Austria, so the expertise is there and now we see more interest from investors’.

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