New signs on the horizon for residential construction

New signs on the horizon for residential construction

by | Oct 17, 2022 | Borrow, Invest

The German market for residential real estate is characterized by high rental and purchase prices in the metropolitan regions. An important factor here is the insufficient number of new construction projects for years and decades. The new traffic light coalition government in Berlin also wants to give new impetus here..

The German GEWOS Institute for Urban, Regional and Housing Research, based in Hamburg, expects a “trend reversal” to occur in the German real estate market in the current year 2022. According to the current GWOS Real Estate Market Analysis IMA®, which is considered the only area-wide study based on actual sales, a decline in turnover on the German transaction market is forecast. Cash turnover on the German real estate market had exceeded the €300 billion mark for the first time in the past year 2021.

The major increases in sales on the real estate market were caused primarily by the multi-family house and condominium segments and Germany’s top 10 cities: Berlin, Hamburg, Munich, Cologne, Frankfurt/Main, Stuttgart, Düsseldorf, Leipzig, Dortmund and Essen. The decline in sales expected by the GEWOS Institute would be the first of its kind in 13 years now. This “trend reversal” is likely to be further accentuated by an inflation rate in Germany that is unprecedented for over 70 years. According to the Federal Statistical Office Destatis in Wiesbaden, the inflation rate is expected to have been as high as ten percent in September 2022.

Target mark a distant prospect

Fewer real estate sales, rising interest rates, high inflation – what’s happening to the lofty goal of the red-yellow-green German government and its Construction and Housing Minister Klara Geywitz? The coalition agreement signed in December 2022 stipulated the following: “Our goal is to build 400,000 new homes per year, 100,000 of which will be publicly subsidized homes. To achieve this, we will continue federal financial support for social housing construction, including social home ownership subsidies, and increase funding.”

But at the latest with the latest economic developments, this goal seems to have receded into the distant future. In 2021, just 293,000 new homes were completed across Germany. The 400,000 mark for 2022 is probably an illusion. Although Minister Geywitz continues to adhere to this goal, she only expects “over 200,000 apartments” for this year. The interim conclusion: There is still too little being built. The impending recession and the increased cost of building materials are also contributing to the fact that private investors and project developers are having to review and recalculate construction projects that they thought were secure and financed.

Is the Chancellor’s “boom” also coming to the housing market?

On the other hand, these developments also mean that banks are now taking a closer look at real estate financing. In its latest issue (September 29, 2022), the “Immobilien-Zeitung,” the leader medium of the German industry, ran the headline: “Lending platforms take up position”. Potential borrowers need “quick access to the appropriate lender and speedy loan decisions,” writes cover story author Ulrich Schüppler. Digital platform solutions could easily provide this quickly and reliably.

The “trend reversal” described at the beginning of this report therefore not only affects the real estate transaction market in Germany, but also project developments, financing and, above all, the residential market. In addition, the public sector, i.e., local authorities, the federal government, and the federal states in Germany, want to step up their role as developers again. Public housing construction could even be facing a major “revival”. If Chancellor Olaf Scholz (SPD) decides to unleash billions of euros of investment on the residential real estate market, too, with a “bang”.

Author and contact for your commercial real estate financing needs:
Julian Grimm, Head of Real Estate Financing Deutschland, Loanboox GmbH
E-Mail: julian.grimm@loanboox.de, Telefon: +49 221 98654215

Loanboox Germany goes Real Estate Finance

Loanboox Germany goes Real Estate Finance

by | Jul 5, 2022 | Borrow, Invest, Media

The leading debt financing platform Loanboox uses the experience from municipal debt financing and expands its product portfolio. The company now also offers its services to German real estate companies, funds and housing cooperatives. To this end, Loanboox welcomes the commercial real estate financing expert Julian Grimm to the German team.

To date, municipalities and large companies have concluded 2,700 loans with a volume of EUR 27 billion via the leading platform for financing. Due to the high demand, Loanboox is now also offering its services to real estate companies, funds and housing cooperatives in Germany. With its new offering, Loanboox combines the advantages of the digital platform (digital offer comparison, data room, efficient processes and expansion of the lender network) with professional, personal advice. The first transactions have already been completed in Switzerland in recent months.

The real estate financing expert Julian Grimm is strengthening the team as Head of Real Estate Financing. Julian Grimm previously worked as a real estate financing specialist at the x-bricks Group, CORESTATE Capital Group and TRIUVA Kapitalverwaltungsgesellschaft (now PATRIZIA):

Portrait von Julian Grimm

“What I missed in my previous function as a real estate investor are simple, efficient and comprehensible processes for handling my large-volume commercial financing. That is exactly what Loanboox offers. That fascinates me. I look forward to supporting real estate companies with their financing in the future!”

Lenders appreciate the broad access to attractive financing options and the lean processes. In the digital data room, all documents and necessary information are available in one place and clearly summarized. This eliminates the multiple back and forths between borrowers and lenders. The fair communication and clear deadlines are a benefit for all parties.

Loanboox is open to partnerships with interested associations or organizations.

About Loanboox

Loanboox is the leading European debt financing platform for large issuers. For more information about Loanboox, click here.

Contact for questions

loanboox GmbH
Andrea Gazzetto, Marketing Communications Manager
Julian Grimm, Head of Real Estate Financing
Neue Weyerstr. 9, 50676 Köln
0221 – 98654220, info@loanboox.de

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DOWNLOAD PORTRAIT JULIAN GRIMM

Results of the World Climate Conference: What the financial industry has to do with it

by | Dec 2, 2021 | Borrow, Invest

The World Climate Conference COP26, which ended mid-November, delivered important results against climate change. We show these and explain what sustainable finance means and what role the financial sector is playing in the fight against climate change.

The goal of the 26th World Climate Conference COP26 in Glasgow was to advance measures to achieve the goals of the Paris Agreement and the UN Framework Convention on Climate Change.

Achieving Net Zero: The contribution of the World Climate Conference COP26

The Glasgow Climate Pact was adopted at COP26 – almost 200 countries agreed to it. Aside from the one-sentence explanation of keeping the temperature rise below 1.5°C, these are the main points discussed by the delegates:

  • Coal will be “phased down”.
  • $500 billion to developing countries in the next 5 years to help them cut emissions and cope with the impacts of the climate crisis.
  • A database, communications and reporting system (Santiago Network) for countries and organisations to identify and catalyze opportunities and mobilize assistance to address loss and damage from climate change.

Some countries and NGOs described the results as “disappointing”. However, most countries agreed that the deal was balanced at this point, given their differences. The New Zealand chief negotiator summarized it as follows: “The text represents the ‘least bad’ result.”

More information about COP26 and its results can be found here.

Explanation of terms: Net Zero

Net Zero (net zero emissions) means that, through various measures, humans remove the same amount of the greenhouse gases they produce from the earth’s atmosphere. Accordingly, net zero means climate neutrality. The goal of global climate policy: to achieve Net Zero respectively climate neutrality by 2050.

Sources: Avenir Suisse and IPCC

What is the connection between the measures mentioned and the financial world?

The importance of sustainable finance

The way the world is currently managing its economy is not sustainable. The ecological level is overstretched and has reached its capacity limits. The financial sector has a central role to play in fighting climate change. On the one hand, enormous sums must be invested to promote sustainable measures, such as renewable energies. This is in order to achieve the UN’s Sustainable Development Goals. On the other hand, huge amounts of money are still flowing into organizations, projects and investments that do not meet sustainability criteria.

What role does finance play in net zero?

One of the key objectives identified in the run-up to COP26 was to mobilize finance. The Glasgow Financial Alliance for Net Zero (GFANZ) was launched to raise standards, drive ambition and ensure that Net Zero commitments are transparent, credible and consistent. Trillions must flow from the private and public sectors for Net Zero to be achieved.

Portrait von Andi Burri

Image source: flickr

“The private sector is realizing that climate risks are very important for their portfolios and they need to align them to a more sustainable way of doing things.”

 

Patricia Espinosa, Executive Secretary of the UN Framework Convention on Climate Change

500 global financial services firms have responded and agreed to align $130 trillion – 40% of the worlds’ financial assets – with the goals set out in the Paris Agreement, including limiting global warming to 1.5°C. An encouraging sign.

In the next article, we will do a deep-dive on the roadmap and the role of institutional investors, governments and cities to financing Net Zero.

Stay tuned.

What is the current status of German municipalities in terms of sustainability?

What is the current status of German municipalities in terms of sustainability?

by | Nov 26, 2021 | Borrow, Insights, Invest

Now available at Loanboox in the SDG Portal

The United Nations’ 2030 Agenda comprises 17 Sustainable Development Goals (SDGs). They serve to promote sustainable peace and prosperity and to protect our planet. What is so big starts small: Where measures become effective and tangible for people on a daily basis.

Supporting municipalities in their key role

“Municipalities play a central role in implementing the 2030 Agenda. Many municipalities have already set out on the path to a sustainable future, and many more are currently working on strategies and measures,” says Marc Wolinda of the Bertelsmann Stiftung.

In order to support municipalities in impact-oriented sustainability management, leading municipal associations, the Bertelsmann Stiftung and other partner organisations have created the SDG portal. “For example, the portal offers 56 SDG indicators with data for all municipalities with a population of 5,000 or more, SDG measures and a reporting tool,” Marc Wolinda explains further.

SDG portal now integrated on Loanboox

With one click on the SDG portal linked on the platform, all the goals already pursued by the municipality appear with stored indicators. The information, which can be accessed quickly, is an added value for investors as an orientation, since the importance of sustainable financing is becoming more and more important.

For municipalities, a whole catalogue of measures and examples for the implementation of the SDGs is available as inspiration for their own sustainable development. In addition, there is the possibility of comparison with other municipalities as well as the documentation of their own sustainable development through a reporting function.

TEST THE SDG-PORTAL
Klicks

Background knowledge

These are the 17 Sustainable Development Goals (SDGs) at a glance.

New budgetary crisis? – Communal finance report 2021 of the Bertelsmann-Stiftung

by | Jul 15, 2021 | Borrow, Insights, Invest

The Corona-Crisis in Germany had a massive impact on everyone, including communes. They needed a large financial assistance package from federal and state governments. The generated surplus is solely based on those aids. Without them, the biggest deficit in history would be standing in the budget books!

Meanwhile, the communal investments reached an all-time high. Whether or how these can be realized, is not predictable. Find out more.

The communal finance report published by the Bertelsmann Stiftung analyses, which financial burdens for communes arose during this crisis and what impact the governmental financing aides had.

Do you want more details? You can download the entire report from the Bertelsmann Stiftung for free.

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Happy Birthday Direct loan!

Happy Birthday Direct loan!

by | Mar 31, 2021 | Borrow, Invest

One year ago, Loanboox and Deutsche Kreditbank AG (DKB) launched the “Direct Loan”. The summary: With more than 200 loans totalling 2.5 billion euros, we were able to support municipalities in obtaining liquidity quickly and unbureaucratically.

A product that turns classic processes around

On 31 March 2020, Loanboox and DKB will jointly launch a fundamentally new, digital solution for taking out and granting municipal liquidity loans. What exactly is so new about this solution? It is no longer the municipality or the municipal corporation that obtains the offers in the traditional ways by telephone or in writing. With the direct loan, it is the other way round. The lenders proactively post their offers, i.e. loan conditions with different terms and corresponding interest rates, on a daily basis. The municipality can compare the offers directly online. After selecting the desired volumes and terms, the loan is bindingly concluded on the platform. This is quick and, above all, transparent.

Positive resonance

53 municipalities have already used the direct loan, including cities such as Frankfurt am Main or Mönchengladbach. They all benefit from the advantages. “The direct loan ensures market transparency. The daily updated offers are comparable at a glance and can be concluded directly online if required,” says Rainer Lohse, treasurer of the city of Frankfurt am Main. Smaller municipalities such as Wipperfürth have also had positive experiences. Michael Berger from the municipal treasury: “The direct loan product gives me a direct, daily updated overview of the conditions available on the market”.

 

Keeping up with current developments

Is everything really online? No, because the direct exchange with our customers is and remains important. Thanks to their feedback – from both investors and municipalities – the functions of the online direct loan are constantly being optimised. And above all, the support we offer in case of questions remains personal.

If you would like to contact us, we are available by phone (+49 221 9865420) or via Mail (direktdarlehen@loanboox.de).

YES, I WOULD LIKE TO DISCOVER MY DIRECT LOAN CONDITIONS