Euro zone lenders dominate UK property - Savills

LONDON Tue Oct 4, 2011 12:03am BST

A pedestrian passes a branch of estate agent, Savills, in London August 28, 2008. REUTERS/Luke MacGregor

A pedestrian passes a branch of estate agent, Savills, in London August 28, 2008.

Credit: Reuters/Luke MacGregor

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LONDON (Reuters) - Three quarters of banks actively lending for bigger-ticket UK commercial property deals in the quarter to end-September are based in the euro zone, with lenders and insurance companies likely to play a greater role, research showed.

William Newsom, UK head of valuation at consultant Savills, said 12 of the 16 lenders active in the UK commercial property market were based in the euro zone.

"The last three months have been a period of considerable volatility across all the financial markets, with a particular focus on the future of the euro zone," he said, referring also to the introduction of new Solvency II and Basel III capital adequacy rules for the insurance and banking industries in 2013 as well as to Greece's economic woes.

"Once the way forward is clearer, I am expecting some of the euro zone lenders to be replaced by UK lenders (despite the Vickers report) and others by insurance companies benefiting from Solvency II," he said in a statement.

The Independent Commission on Banking's Vickers Report on UK banking made several recommendations for change in the wake of the global financial crisis, including that banks should ringfence their retail business from their investment banking arms.

Meanwhile, Newsom said there was increasing activity from lenders such as Handelsbanken, Clydesdale, Coutts, HSBC, and Nationwide Building Society.

The top 16 lenders in the last three months -- which had each achieved total new lending of at least 75 million pounds in loan sizes of 20 million pounds or more -- were, in alphabetical order:

Aareal

Aviva

Barclays Bank

Bayern LB

Deka Bank

Deutsche Bank

Deutsche Hypo

Deutsche Pfandbrief

Eurohypo

Helaba

ING REF

Landesbank Berlin

Met Life

Royal Bank of Scotland

Santander

Societe Generale

(Editing by Greg Mahlich)

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