Outlook on the Debt Market in Germany Remains Cloudy: FAP Barometer for Commercial Real Estate Financing Returns Negative Trend

BERLIN, January 28, 2013 /PRNewswire/ --

• The incipient trend of a cooling real estate financing market observed in Q4 2012 has persisted: In Q1 2013, the FAP Barometer shows a score of -0.25 (previous quarter: +0.5)
  

Sentiment on the German market for commercial real estate financing has continued to deteriorate. On a scale from -15 (credit crunch) to +15 (liquid market), the FAP Barometer for Q1 2013 reads -0.25 (previous quarter: +0.5). Said Curth-C. Flatow, founder and Managing Partner of FAP: "While the negative tendency is negligible in and of itself, the score has dropped below the psychologically significant threshold of zero. It is a sign suggesting that conditions on the commercial real estate financing market are becoming more complex."

While the overwhelming majority (79.8 percent) of the respondents deem the financing conditions unchanged quarter on quarter, 13.8 percent felt that conditions have become more restrictive, and only 6.9 percent reported a progressive situation. One main reason for the inferior market evaluation is the lenders' new business: Those who reported an "increase in new business volume" accounted for only 47.1 percent in the current poll, down from 58.9 percent last quarter. At the same time, the market share of small-scale activities is rising. While 1.8 % of the interviewees in the previous round still thought loan tranches of more than 100 million euros likely, none of them think so anymore. "Especially against the background of the imminent major CBMS maturities, the small-scale lending involved in refinancing these tranches presents yet another challenge," observed Curth-C. Flatow.

Regarding the focal points in new business, lenders unsurprisingly attach chief priority to "maximisation of income or yield" (18.6 percent). In places 2 and 3, however, priorities have traded places: Second place at 17 percent was taken by the wish to acquire new clients, followed by the "sustainable management of existing client accounts" at 15.5 percent. The priority "Minimising risks" dropped from 16.2 to 14.9 percent while remaining in fourth place.

The Q1/2013 quarterly report for the FAP Barometer including press release and charts is available as download at: http://www.fap-finance.com/en/barometer.aspx

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