UK banks return to commercial property
Move pares lending margins by up to 2 percentage points
[LONDON] Private-equity firms, pension funds and insurers face dwindling returns on loans to the UK commercial property market as competition intensifies from banks that shunned the business after the financial crisis.
A new lender has entered the market almost every week in the past year in search of higher returns as gilt yields neared record lows, according to brokers Savills. The UK banking industry avoided the market following the collapse of Lehman Brothers in September 2008 because of regulatory requirements to meet stricter capital rules.
Greater competition on commercial property loans has narrowed lending margins by as much as two percentage points in the past year, said Anthony Myers, a real estate executive at Blackstone Group. With UK commercial property values rising for the first time since 2011 and balance sheets on the mend, British banks are increasingly willing to offer loans backing offices, stores, and industrial properties.
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Property
Homebuyers shun new real estate in Vancouver, hurting builders
US pending home sales jump in March to hit highest in the year
Blackstone strikes US$1.6 billion student housing deal with KKR
European real estate deals slump to lowest level in 13 years
Singapore Q1 industrial rents rise further as occupancy dips and prices fall: JTC
Condo resale volumes rebound in March; prices inch up 0.4%: SRX, 99.co