UK real estate 2013: outlook variable?

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A look ahead at the UK real estate market in the coming year, covering mortgage lending and the London market.

The latest De Montfort report shows even less lending in 2012 than 2011. Traditional banks will continue to play a limited role for now as most are still deleveraging their loan books, and are highly risk averse in new lending, with a limited appetite for secondary property and little development finance. There has, however, been some traditional lending from German banks which have fewer legacy issues or government support: PPB Deutsche Pfandbriefbank has recently provided a £106m facility to Plaza Global Real Estate Partners towards the acquisition of 23 Savile Row in London’s West End. We advised Plaza, a joint venture between Quantum Global Real Estate and LaSalle Investment Management, on this deal which has allowed them to refinance their first purchase.

We are starting to see new overseas banks, insurance companies, debt funds and private equity investors become active, especially on big ticket deals or with blue-chip borrowers. We have acted on a number of deals wholly or partly financed by non-bank lenders, including Unite’s £121m financing of its student accommodation portfolio, the first direct lending deal for Legal & General…

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