Scarce real estate lending covers smaller sums and higher pre-leases, Deloitte says

Newsroom 09/06/2009 | 15:39

And instead of looking at financing loan to value, they are looking at loan to cost. Now they are willing to finance a maximum 60 percent LTC, while last year they were financing up to 70 percent LTV,” Catherine Martin, financial advisory director at Deloitte in Romania, told BR. “Now developers need more equity than before, when they put up the land and financed the construction by debt.” With less money available and some banks having given up on real estate financing, lenders are looking at smaller projects. Financing volumes vary from EUR 15-30 million, with higher volumes being covered by a pool of banks or building the project in stages and obtaining financing for each separate stage. “Banks are financing professional developers nowadays and looking much more at track record, projects and the quality of tenants. For residential development it is difficult to get any financing. For assets which are rented and have a lot of pre-letting, it is easier,” said Martin.
The EUR 60,000 state guarantee to buy the first house is a good incentive for the residential segment, but the burden still remains on the borrower to re-pay the loan. Real estate professionals see a local market comeback in 2010, with nearly 40 percent of the respondents of a recent Deloitte study pointing to an upswing in the H1 of 2010, and 43 percent in H2 or after.
Corina Saceanu

BR Magazine | Latest Issue

Download PDF or read online: October 2022 Issue | Business Review Magazine

The October 2022 issue of Business Review Magazine is now available in digital format, featuring the main cover story titled “Globalworth Successfully Addressing Market Challenges From a Position
Newsroom | 26/10/2022 | 17:53

    You will receive a download link for the latest issue of Business Review Magazine in PDF format, based on the completion of the form below.

    I agree with the Privacy policy of
    I agree with the storage and handling of my data by
    Advertisement Advertisement
    Close ×

    We use cookies for keeping our website reliable and secure, personalising content and ads, providing social media features and to analyse how our website is used.

    Accept & continue