Here is an interesting article on European Activities, specifically banks are not calling in any loans for LVR breaches.....
" By Anita Likus Of DOW JONES NEWSWIRES
LONDON (Dow Jones)--The number of European lenders to the real estate industry has increased since the beginning of the year, and they are also providing bigger amounts of finance. But the dearth of prime property means that lending will still fall overall this year.
"The level of activity by lenders is determined by the level of investment activity so, although there are quite a few banks wishing to lend, there is limited lending because sales are scarce and equity buyers are prominent in the market," said William Newsom, head of U.K. valuations at property services company Savills PLC.
An analysis by Savills of investment transactions across the U.K. in the first half of 2009 found that activity, is down 40% compared with the same period of 2008.
Newsom estimates that the level of lending activity is likely to have fallen similarly.
The De Montfort commercial property lending survey for the first half of the year, due for release at the end of October, is likely to confirm this downward trend.
As lenders try to mitigate risk, only lending for absolutely prime properties - well-let assets in good locations offering secure incomes - which are scarce, they face competition from rivals but, unlike in the boom times, are unwilling to compete on margins, preferring to lose deals instead.
"Debt is still available, although it is more expensive and only offered on certain assets," said Michael Rhydderch, a partner at real estate brokers Cushman & Wakefield.
European banks usually require some 300 basis points above the European interbank offered rate, while U.K. banks want 225 basis points to 250 basis points, indicating that European property is viewed as more risky.
Nevertheless, Savills identified a dozen pan-European banks, which are willing to lend to commercial real-estate players. Most of them are German banks such as Helaba Landesbank Hessen-Thuringen, Deutsche Postbank AG (DPB.XE), Deutsche Genossenschafts-Hypothekenbank, Eurohypo AG, and Deutsche Pfandbriefbank AG. But some French banks, such as Societe Generale S.A. (GLE.FR), BNP Paribas (BNP.FR) and Calyon, and also Spain's La Caixa, are also willing to lend.
There is only one U.K. bank, Banco Santander S.A.'s (SAN.MC) Abbey National, with pan-European appetite, although industry experts said that Lloyds Banking Group PLC (LLOY.LN) is looking for properties in major European countries but is not yet active. The banks could not immediately be reached for comment.
The Royal Bank of Scotland Group PLC (RBS.LN) didn't rule out international investment, but said that real estate lending outside the U.K. is not a core activity. A spokesman for RBS said: "In the U.K. we continue to support strong management teams, whether existing customers or not."
The amount of lending by willing institutions has also increased. Until recently, most European institutions were limiting commercial real-estate loans to between EUR10 million and EUR20 million, but lately banks have been willing to lend up to EUR50 million, with a handful going up to EUR100 million, according to Justin O'Connor, chief executive of Cordea Savills, a fund manager that has EUR2.5 billion of assets under management.
A spokesperson for Postbank said: "Postbanks' commercial real estate lending usually amount between EUR10 million and EUR50 million. Lending exceeding that range are rare exceptions and must be well-founded."
Cushman & Wakefield's Rhydderch named Eurohypo and Santander as banks willing to lend more than EUR100 million on a single commercial real-estate deal. The banks were not available to comment.
Savills also identified 22 banks willing to lend in the U.K. and more than ten banks happy to lend for French property, including Credit Fonciere de France, which is willing to provide EUR50 million to buyers in France.
But the majority of lenders, in Europe and the U.K., are German. Lender Deutsche Pfandbriefbank AG said it would focus on real estate investors with an established track record in Europe, and mid-size deals between EUR30 million and EUR70 million. However, it would start lending in Germany at the lower end of this range.
Major German real estate financier Helaba Landesbank is an active lender to real estate investors across Europe and also in the U.S., said J??rgen Fenk, the bank's head of real-estate financing.
Fenk said, however, while the bank is open for business, recently providing financing for deals in Poland, Finland and Sweden, it lends conservatively, having raised requirements for equity in projects, focusing on cash flow, and doesn't lend to everyone.
Because lenders are risk-averse, they favor less-leveraged clients who can demonstrate their ability to service loans, and on properties with secure income, long leases and good tenants. But such clients are currently in short supply. As a result, Helaba's Fenk says, lenders for absolute prime properties are competing with each other.
Indeed, banks have not been calling in loans, which are in default on loan-to-value covenants, as long as interest was being paid. Industry experts said that some banks even provide funds over and above the loan required to enable that it can be serviced without problems until economies improve.
Additionally, to mitigate risk, lenders are not open for business for speculative, unoccupied, developments and secondary properties. As banks try to reduce risk, syndication of a loan between a number of lenders has become standard practice.
Helaba, for instance, loaned EUR140 million to private equity real estate advisory MGPA, in a club deal with Westdeutsche ImmobilienBank AG and Postbank - two other active German lenders - to buy a mixed office and retail property at Place de la Madeleine in Paris. While RBS said it will consider all transactions case by case, it will also syndicate or distribute risk.
But although institutions are more ready to make finance available, lending terms remain conservative, with low loan-to-value rates of between 60% and 65%, compared with in excess of 85% in boom times, making it difficult for investors who aren't equity rich to borrow and hence invest.
In response, buyers and vendors are also getting savvier in current markets, providing seller financing or buying assets and refinancing them later, to ensure speedy completion of a deal.
Although investment volumes seem to be stabilizing this year, the EUR24.5 billion invested in European property is just 20% of the volume seen in the first half of 2007, according to Aberdeen Property Investors. And although volumes are expected to pick up by the end of the year, they will be nowhere near their boom levels. Morgan Stanley said that there is a very real risk that good quality assets will remain tightly held despite a larger amount of money chasing this type of asset. "
