DGAP-News: BF.direkt AG: BF.Quartalsbarometer - Slight decline in willingness to finance

DGAP-News: BF.direkt AG / Key word(s): Real Estate/Market Report
BF.direkt AG: BF.Quartalsbarometer - Slight decline in willingness to
finance

26.10.2015 / 10:18

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Slight decline in willingness to finance

  - BF.Quartalsbarometer reaches -0.41 points in Q4 (previous quarter:
    1.23)

  - Sentiment remains balanced

  - Continued margin pressure accompanies higher liquidity costs

Stuttgart, 26 October 2015. BF.Quartalsbarometer for Q4 2015 showed that
the sentiment among market participants remains balanced but that higher
liquidity costs and a deterioration in the margins of portfolio financing
led to an ongoing decline in the sentiment of roughly one-fifth of those
interviewed. This trend barometer, which monitors financing practices for
commercial real estate and was published for the second time by BF.direkt
AG, an independent specialist for real estate financing strategies, dropped
for the second consecutive time to a level of just -0.41 points (Q3: 1.23).
As a result, the BF.Quartalsbarometer has entered slightly negative
territory for the first time since early 2013. Overall, however, the
experts interviewed regarding the barometer's level were still of the
opinion that there is a "balanced market".

The results from an analysis by bulwiengesa AG, an independent analysis
company in the real estate sector who conducts the interviews and
evaluations for BF.Quartalsbarometers, show that roughly 75 percent of
market participants are experiencing flat liquidity costs (refinancing
costs). At the same time there is a continuation in the trend for "newly
rising liquidity costs". This value, which shows an increase of 5.6 pp to
18.9 percent, is a new record high. Only 2.7 percent of those interviewed
experienced declining liquidity costs.

The current BF.Quartalsbarometer shows that the average margin for
portfolio financing in Q4 2015 has declined. Moreover, the trend of falling
margins (currently by two basis points) for project financing, which has
been visible since the analysis in the fourth quarter of 2014, has also
continued.

Furthermore, the lack of room for further price appreciation in prime
locations is increasing market participants' willingness to invest in other
locations and risk classes. "In terms of price development, we believe that
there are still opportunities, particularly outside German metropolitan
areas, for market participants with solid regional expertise. The
willingness to provide financing on the part of financial institutions
continues to be strong," commented Mr. Fedele, CEO of BF.direkt AG.

This was also the theme addressed in the survey for the current trend
barometer - Can investors in Germany still buy real estate at risk-adequate
prices? Roughly 51.5 percent of those questioned answered "no" reasoning
that yields are no longer sufficient to warrant the assumed risk. There is
a high willingness to pay exorbitant prices due to investment pressure,
among others. However, these excessive prices can only be financed in the
existing low interest rate environment.

Nearly half of those interviewed (48.5 percent) still consider the current
purchase prices to be risk-adequate. Most of the experts, however,
restricted their comments to real estate outside of the usual metropolitan
areas and B, C or D locations.

"What is interesting in this context is the change in decision-making
processes within bank organisations. The credit approval process at these
institutions is increasingly being transferred to risk departments, by some
15 percentage points. In this environment, market participants who put more
emphasis on quality than risk with their investments can hope for a warm
reception from financiers", explained Prof. Dr. Steffen Sebastian, who
holds the chair for real estate financing at the IREBS International Real
Estate Business School of the Regensburg University and is an academic
advisor to the BF.Quartalsbarometer.

With regard to the demand pertaining to alternative financing providers,
the value in Q4 2015 rose slightly in comparison to the previous quarter.
Whereas in Q3, nearly 38 percent of those interviewed expected strong
demand for additional types of financing, in Q4 that figure rose to 40
percent. "Currently we can detect a certain trend in demand particularly
for the most important type of alternative financing - mezzanine and
equity-like financing. We expect this trend to be continued in the upcoming
quarters", added Mr. Fedele.

The BF.Quartalsbarometer, issued by BF.direkt AG, an independent specialist
for financing strategies, is an analysis tool published four times per year
that was established in the financing market in 2012 and shows
participants' willingness to finance commercial real estate in Germany. The
accompanying analysis also includes comments on new business, asset
classes, expiry dates for loans and margins. The panel comprises 140
experts from lending institutions that, in addition to traditional
financiers such as mortgage banks, specialist banks, public-sector and
cooperative institutions and private banks, also includes newer types of
financing providers such as provident funds/pension funds, insurance
companies, real estate private equity and credit funds. Interviews and
scientific evaluations are conducted by the analysis company bulwiengesa.
www.quartalsbarometer.de

BF.direkt AG is a leading, independent specialist for the financing of
residential and commercial real estate projects. www.bf-direkt.de

bulwiengesa is one of the largest, independent analysis companies for real
estate within Continental Europe. www.bulwiengesa.de

Contacts:

BF.direkt
Manuel Köppel
Tel: +49 711 22 55 44 136
Email: m.koeppel@bf.direkt.de

BF.direkt PR Contact
GFEI Aktiengesellschaft
Tel: +49 511 47 40 23 10
Email: BF.direkt@gfei.de

bulwiengesa
Andreas Schulten
Tel: 030-278768-0
Email: schulten@bulwiengesa.de

Universität Regensburg
Lehrstuhl für Immobilienfinanzierung
Prof. Dr. Steffen Sebastian
Tel: +49 941 943 5081
Mail: Sekretariat.Sebastian@wiwi.uni-regensburg.de

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BF.direkt AG
Leuschnerstraße 12
70174 Stuttgart

BF.direkt AG
Headquartered in Stuttgart - Registered at the District Court of Stuttgart
under HRB 20834 Board of Directors: Francesco Fedele
Chairman of the Supervisory Board: Dr. Peter Maser, Attorney at Law 
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26.10.2015 Dissemination of a Corporate News, transmitted by DGAP - a
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