Warmdraaien..

Commercieel vastgoed financieren in ‘zwaar weer’
VGM, 26 oktober 2013
Drs. Philip Zwart
Nyenrode Real Estate Center
2
Agenda
1.
2.
3.
4.
Introductie, stellingen en vragen
Vastgoedfinanciering door banken
Funding
Vastgoedfinancieringsmarkt: de trends
3
Warmdraaien…
1. Wie zijn de belangrijkste financiers op de
financieringsmarkt voor commercieel vastgoed?
2. Wat zijn de belangrijkste trends in de Nederlandse
vastgoedfinancieringsmarkt?
3. Wat zijn de belangrijkste financiële ratio’s voor
vastgoedfinanciering?
4. Wat is een gezonde LTV voor de Nederlandse
vastgoedmarkt?
5. Vinden de beleggers de Nederlandse markt te hoog
gefinancierd?
4
Warmdraaien..
6. Wat is de gemiddelde LTV voor particuliere
vastgoedbeleggers in 2013?
7. Wat is de gemiddelde LTV voor institutionele
vastgoedbeleggers in 2013?
8. Wat is het gemiddelde rentepercentage in Nederland?
9. Wat is het gemiddelde aflossingspercentage in Nederland?
10. Wat is een spread?
5
Warmdraaien..
11. Voor wat voor termijn zouden vastgoedbeleggers willen
financieren? En de vastgoedfinancier?
12. Hoe staan de vastgoedbeleggers ten opzichte van
derivaten? En de financiers?
13. Naar welke alternatieve financieringsbronnen zoeken
vastgoedbeleggers?
14. Wat zijn convenanten?
15. Wat zijn verschillen in financiering, gezien over heel
Nederland?
6
How do banks determine and price property risk?
The 4 most important factors for assessing risk in property (re)financing:
– Loan To Value (LTV)
20%
– ICR
30%
– Average WALE
25%
– Quality and tenant diversification
25%
20%  Value
80%  Cashflow
•
Value decline through yield-shifts
•
But also value decline possible through decreasing rents
•
Banks increase their margins to price this risk
•
In addition to Requirements Basel driving up margins: higher capital buffer, less
leverage, lower RoE, longer funding.
7
Pricing of banks
1.
Base rate
1. EURIBOR / LIBOR (variable rate)
2. X yrs swap-rate (fixed rate)
2.
Liquidity fee (FTP)
1. Determined by the costs banks bear to attract funding
2. Directly priced to the clients
3.
Margin
1. Compensation for all internal costs plus the risk a bank is taking
2. The higher the risk, the higher the margin
Vastgoefinancieringstarieven
gebaseerd op 3M Euribor en 3-jarige lening
%
8
7
6
5
4
3
MARGE
2
1
LIQ. OPSLAG
EUR3M
0
8
Vastgoedfinanciering door banken
9
TMB PZ 10-2013
10
Prof. dr. T.M.
‘Staat hanteerde Europees waardebegrip
bij nationalisatie SNS’
‘De Nederlandse Staat heeft de
leningportefeuille van SNS Property
Finance bij de nationalisatie laten
waarderen via een waardebegrip van de
Europese Commissie, dat een hogere
waarde oplevert dan de marktwaarde.’
Nationalisatie SNS
(1-2-2013)
Vastgoedfinanciers worden in de periode
2015 – 2018 zwakker, niet zwakker of
sterker, sterker.
14
Influences on real estate finance market
Liquidity Costs
(funding, CDS)
Economic conditions
News / press
‘The Wall of Debt’
Regulations
CRE Financing
(Basel III, Solvency II)
Challenging business
Market’s sentiment
towards CRE in Europe
Banks’ sentiment
towards CRE
Valuations
15
Activa
Leningenportfolio
Passiva
Eigen vermogen
Deposito’s
Obligaties
Interbancair
16
RWA
RWA is a function of the perceived riskiness of the asset
B/S
Available
Capital
Regulatory
Capital (8% of RWA)
RWA
Assets
17
Riskiness of assets
CRE loans example
Source: INREV – October 2012
18
De-risking existing loan book
Option for CRE lenders
Negotiations with clients for additional de-gearing
• cash sweeps
• additional security
• equity injections
• new third party capital
• property sales
• enforcement
Significant workload ahead for all property lenders
19
Pro active loan book management
Various ways
Reduce
• Exit clients: inform 6+ months in advance
• Transfer loans: externally and continuation of funding projects
• Bond markets: product push
Maximise top-line
Re-price
• Market margin or more
• PIK margin if deal cannot pay
• Take % equity whenever clients cannot de-gear
Ability to sell each loan at par
Liquid assets
• Transferability language / standardisation of documentation
• Further align DD requirements with market
• Introduce non-bank institutions in deals
20
But deleveraging will take time
European deleveraging cycle has just begun
History suggest 4-7 years post a banking crisis
Trajectory of loan/deposit ratio in previous crises
Trajectory of loan growth ratio
Source: MS Research: ‘Banks deleveraging and Real Estate’, March 2012
•
•
•
•
Source: Bank of England, Financial Stability Report, Thompson
Through MS Research: ‘Banks deleveraging and Real Estate’, March 2012
Average loan tenor 5 years
Extensions to optimise recovery
Euro-zone crisis drives longer shrinkage period
LTRO relieves stress near term
21
Funding
22
Funding from a clients’ perspective
-
+
Size & complexity
Towards Investment Grade
23
Funding from a clients’ perspective cont’d
Gross margins in sector at historic high
Average interest rate margins for different RE loan sectors
….steady upward trend for REF as result
Margin on new production in ING Lending Services
24
Basel III: Focus on funding side of the BS
Simplified example Balance Sheet
Assets
Liabilities
i.e. Deposits,
Savings Accounts,
Current Accounts,
Treasury Products.
Funding GAP
•
The crisis learned funding in
(liquid) capital markets &
interbank market can easily dry
out (funding gap).
•
Funding gap in the ING NV
Balance Sheet is even more
stretched
Basel III provides constraints to further close the funding gap and continue our business.
We need to capture “stable” and long term funding (see next slide).
25
Funding from banks’ perspective
Liabilities
Simplified example Balance Sheet
Assets
buffer to protect
deposit holders
A minimum Core Tier 1 (CT1, equity and retained profits) is required
to absorb unexpected losses in the commercial loan portfolio
and not impact the deposit holders
26
Vastgoedfinancieringstrends
27
Vastgoedfinanciers moeten juist
nu anticyclisch financieren.
28
On-going decrease in property appetite
A self-fulfilling prophecy?
Lower asset
valuations
Crisis
Limited liquidity in
Financial Markets
Value
decline
29
Traditional way of banking is history
Before
•
Focus mainly on asset growth. Funding was available and cheap
•
Balance Sheets (BS) largely increased
•
Dependence on short term funding on capital markets and the interbank market
Now
•
The crisis showed liquidity does have a price and Banks shouldn’t take the risk to
depend too largely on capital markets and the interbank market
•
Real estate has a bad and high risk image
30
Debt
European CRE Debt & CMBS maturity profile (€/billion)
Source: CB Richard Ellis, De Montfort University, Standard & Poor’s, Fitch
Difficult to refinance in
the current market
No refinancing on short
term required
Short-term Debt
Poor Quality
Properties, High
LTVs
Long-term Debt
(2016 +
maturity)
20%
Opportunity
alternative debt
Short-term Debt
Good Quality
Property High
LTVs
23%
24%
33%
Source: CB Richard
•
•
•
•
Easy
to refinance
Short-term Debt
Good Quality
Property Low
LTVs
Ellis
Total financed CRE by the largest European banks>€1.2 trillion (5.2% of total assets)
UK and German banks have largest CRE exposure with respectively €317bn and
€255bn
The wall of debt peaks 2012-2013 with €350 billion of expirations
Large opportunity for alternative debt providers that are aiming for higher returns
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Leverage effect
Example
•
Rental income = EUR5m
•
Cost of debt = 5%
•
Holding period = 5 years
•
Annual value increase = 1%
•
Equity IRR requirement fixed at 10%
All depends on
LTV available in
debt markets !
How much can investor pay for rental stream?
Input
LTV
IRR
80%
10%
Calculation
Year
0
Rental income
Interest
Sales value
Loan repayment
CF to equity
(20)
IRR
10%
1
5
(4)
1
2
5
(4)
1
3
5
(4)
1
4
5
(4)
5
5
(4)
105
(80)
1 26
Loan
Equity
Purchase price
Output
80
20
100
80%
60%
LTV 40%
20%
0%
Sensitivity
IRR
10%
100
83
72
63
56
(44%)
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Alternative financiers
Looking at “European Real Estate Debt”
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Future of property lending
High quality
Loan book
• No more secondary property
• Lower leverage
Avoid losses
• Liquid paper
+
+
Sustainable attitude
Culture
• Compete on service (vs risk)
• Staff- & shareholders aligned
Healthy margin
• Syndicate responsibly
=
Profit
=
Consistent contribution
• No P&L volatility
• Costs under control
Future
• Protected reputation
34
TMB PZ 10-2013
35
Cases Vastgoed, Agenda
1. KPI’s perspectief Financier
2. KPI’s perspectief Vastgoedadviseur
3. Cases
1. Office
2. Retail
3. Residential
36
Perspectief Financier
•
•
•
•
Betaalbaarheid
Debiteur (asset management)
Wederverhuur
Loan-to-Value
37
Perspectief Vastgoedadviseur
1. Gebied
2. Gebouw
3. Gebruiker
38
Case 1 – Office, Stationsstraat 15 te Amersfoort
•
•
•
•
•
•
•
•
•
•
•
ING beoordeelt financierbaarheid •
DTZ adviseert de koper
•
•
8.000 m2 v.v.o.
Bouwjaar 1992
Parkeernorm 1:100
16 huurders (bonte
mix)
Rest. Looptijd 3,1 jaar
Leegstand 15%
Koper is vermogend
Core business: ICT
Nieuwe toetreder
Doel: deel v/h
vermogen beleggen in
vastgoed
Motief: risico spreiding
LTV
: 60% •
BAR v.o.n.: 8,5% •
•
•
•
•
•
Object is
marktconform
verhuurd
Stationslocatie
Marktconform
onderhouden
Gebruik conform
bestemming
Geen kadastrale
waardebeperkende
factoren
Eigen grond
Spread (10-jr staatslening) : 2,20%
Factor k.k.
: 11,0
39
Case 2 – Retail Wijkwinkelcentrum te Apeldoorn
•
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•
•
•
•
•
•
ING beoordeelt financierbaarheid •
DTZ adviseert de koper
•
1.000 m2 supermarkt
3 x 250 m2 dagwinkels
1 x 250 m2 leeg
Supermarkt huurt nog
1,5 jaar
Rest. Looptijd
dagwinkels 4,5 jaar
Koper is ervaren partij
Koopt aan in B.V.
Vennootschap heeft
financiële buffer en
solvabiliteit van 45%
In privé is vermogen
aanwezig
LTV
: 65% •
BAR v.o.n.: 6,75% •
•
•
•
•
•
•
•
Marktconform
verhuurd
Kadastraal gesplitst
Voldoende openbare
parkeerplaatsen
Supermarkt wil min.
1.250 m2
Gebruik conform
bestemming
Geen kadastrale
waardebeperkende
factoren
Geen erfpacht
Spread (10-jr staatslening) : 2,00%
Factor k.k.
: 14,0
40
Case 3 –Residential Wijk: Malburgen te Arnhem
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•
•
•
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•
•
•
ING beoordeelt financierbaarheid •
DTZ adviseert de koper
•
Verkoper is een
particuliere belegger
Koper wil
doorexploiteren
Woningen zijn
kadastraal gesplitst
Goede voorzieningen
in de wijk
150 grondgebonden
arbeiderswoningen
Bouwjaar 1956
90 m2 g.b.o. per vhe
Perceelgrootte 150 m2
Huurprijs EUR 5.250
per jaar = max. redelijk
LTV
: 60%
BAR v.o.n.: 6,0%
•
•
•
•
•
•
•
•
•
•
•
Goed onderhouden
Leegwaarde per
woning EUR 150.000
Contracten voor
onbepaalde tijd
Opzegtermijn 1 maand
Homogeen complex
Niet geliberaliseerd
Gebruik conform
bestemming
Geen kadastrale
waardebeperkende
factoren
Eigen grond
Spread (10-jr staatslening) : 1,85%
Factor k.k.
: 16,0
41