What is Commercial Property Finance Lending In Germany?
Commercial Property Finance lending in Germany and Europe is any loan secured on commercial property that is looking for financing or refinancing. The property can be either owner occupied or for investment purposes. It can also be known simply as a commercial mortgage for commercial premises. These types of mortgages are available for many countries but mostly we have access to many commercial mortgage lenders in Europe that are happy to look at lending. Our lenders are mainly non bank institutional lenders that draw their funding requirements from large pension and investment funds, We also have commercial banks and also private investors that are happy to lend. This type of commercial finance funding used to be provided by traditional high street commercial mortgage lenders but their liking for this type of lending has diminished dramatically since the start of the lending crisis in 2007 and 2008. Commercial property prices had a bigger downturn than residential properties and as a result there are fewer lenders in this marketplace. The high street lenders have now been replaced by challenger banks who are obtaining their financing requirements from the bond markets and investment and pension funds. The return on lending offers a good and guaranteed return so the market has exploded in recent years with large institutions happy to lend their clients funds because of the security they provide against commercial properties. We work with active commercial real estate lenders throughout the UK and Europe from the bank and non bank lending panels.
Types of Commercial Finance in Germany?
These are types of commercial finance in Germany used to fund the acquisition or refinance of commercial property. They can be used to fund a wide variety of property types including full commercial or mixed-use properties and even land. German commercial mortgage lenders tend to take an individual view to assessing applications, meaning criteria is often more flexible. This allows lenders to consider a wide variety of ‘out of the ordinary’ scenarios without issue.
Key Benefits of Commercial Finance In Germany
There are several key benefits to taking out a commercial mortgage, including:
- The interest paid is tax-deductible.
- This type of lending is much more flexible than it was a few years ago due to the rise of German challenger banks.
- Using this type of mortgage to purchase commercial property could see you benefit from increases in the property value.
- Investing in commercial property in Germany could produce higher yields than investing in residential property
Commercial Mortgage Rates for Germany
We offer market-leading terms for almost every situation in Germany:
Owner-Occupied Commercial Property
- Low Rates from 2.25% dependent on lender
- Borrow up to 80% Loan To Value (LTV) in some cases
- Fixed and variable rates available
- Interest-only or capital repayment
- 5 to 7 Years terms
- EUR20 million minimum loans up top EUR200m syndicated
Commercial Investment Mortgages
- Rates from 2.85%
- Up to 75% LTV
- Commercial or mixed-use properties
- Borrow for up to 7 years
- Interest-only or capital repayments
- EUR20 million minimum loans up top EUR200m syndicated
German Commercial Property Portfolio Financing and Refinancing
- Finance existing properties simply and on a customized basis
- Offices, retail, logistics, residential or other asset classes: financing portfolio properties is a complex matter.
So it’s good when your broker makes things simple for you.
We offer a totally transparent service, providing expert advice and giving you the information that you require to compare the latest rates and choose the right product.
What Fees Will I Have To Pay for Commercial Finance in Germany?
We work hard to save you money on your commercial mortgage application. It’s not usually possible to avoid all fees, below are some of the common fees you can expect to pay:
Lender Arrangement Fee
Arrangement fees are often charged as a percentage of the loan. Lender arrangement fees range from 1-2% but are usually between 1.5-2%. Although some lenders will expect some of the fee to be paid on offer, it may be possible to add the fee to the loan but all lenders have different policies and terms.
Broker Fees
Most brokers will charge broker fees for arranging. This is often upwards of 1% to 2% of the loan.
Some will also charge an upfront administration fee before working on your application. We never charge upfront fees to work with you on your application.
Valuation Fees
As with a residential mortgage valuation, a valuer will inspect the property and produce a commercial valuation report report for the lender. The fee is usually paid partway through the process. This is before the offer and the cost will vary based on the type, value and location of the commercial property in Germany.
Legal Fees
Lenders will expect you to cover both your own and their legal fees concerning the loan. The cost of legal work is higher for commercial financing in Germany than for residential. The fees charged will vary depending on the loan size, property value and complexity of the transaction. Legal fees are usually quoted on a case by case basis.
German Lenders Also Finance Other Countries
Are you looking to finance a property abroad? In France, the UK, Benelux, Austria, Switzerland, Poland, the Czech Republic, Italy, Spain, Sweden or the USA? .
We have an extensive network of banks in Germany and local specialists that we work with hand in hand.
Then talk to us about a real estate loan
Range of Options From German Commercial Finance Lenders
Our advisors develop a special financing solution for each real estate project, which we can implement for you in the shortest possible time. Your contact person is responsible for the entire business process, from the project initiative to the feasibility study to the planned marketing or transfer to your inventory.
From classic fixed-rate loans to structured financing, we offer you all common loan formats based on the money and capital markets: annuity loans, interim construction financing, current account credit and additional guarantees and derivatives.
For complex transactions, we have strong consortium partners at our disposal.
We support you beyond real estate financing and are available to you with our entire commercial financing product range.
German Cities We Can Help Finance
We can finance a large number of cities through our network of lenders including:
Berlin
Hamburg
Munich
Cologne
Frankfurt
Stuttgart
Düsseldorf
Dortmund
Plus many more of the smaller German cites
What Types Of Commercial Financing Can Our Lenders Offer?
- Acquisition
- Refinance
- Opportunistic recapitalizations
- Capital improvement
- Lease-up,
- Redevelopment and adaptive reuse
- Construction and development
What Commercial Properties Can Your Lenders Finance?
- Office Blocks
- Student Accommodation
- Retail – retail stores, shopping centres, shops
- Industrial – warehouses, factories
- Leisure – hotels, pubs, restaurants, cafes, sport facilities
- Healthcare – medical centres, hospitals, nursing homes
- Logistics
- Residential
- Strategic Land
What Locations Can Our Commercial Funders Lend In
- United Kingdom
- Ireland
- United States
- Canada
- Austria
- Belgium
- Netherlands
- France
- Spain
- Germany
- Portugal
- Italy
- Denmark
- Sweden
- Norway
- Finland
- Switzerland
- Plus many more European countries
What are the Key Features our Commercial Finance
- Commercial property loan interest rates start from 5% per annum
- Typically LTV of up to 80%
- Options with no Exit Fees
- 1 Year to 15 Year terms
- Options with no Personal Guarantees.
- Commercial Loan sizes ranging from EUR2m up to EUR500m
- Full UK Coverage. (For Europe, Asia and the United States terms will differ slightly)
- Valuation and Surveyor fees case by case.
Commercial finance lending usually falls into two categories:
Owner Occupied: this is where an individual owns the property in which they have commercial interest. This can be a shop, factory or garage. The owner repays the loan through the profitable return of their business and as such the business owns the property and they or a number of shareholders will own the business.
Buyer Investment: this is where the individual owns the property as an investment but does not run the commercial element of it. This can be an office block which local businesses lease from the owner or perhaps a building which offers residential flats. The individual simply receives revenue from the property as rental / lease payments.
What can Commercial Finance Lending used for?
A Commercial loan can be used for a wide variety of reasons. One example would be if you wanted to purchase a commercial property and you wanted to convert it into a residential property i.e. an office block into a set of apartments then you could get commercial finance secured against the property to either fund the purchase and/or the conversion. If the property is already owned, you could get commercial lending just to fund the conversion. Commercial finance loans are used for numerous reasons such as: releasing equity for debt consolidation, business cash flow injection, building improvements or to purchase more new commercial properties as part of a business.
What fees are involved?
Arrangement fees: Arrangement fees are typically added to the loan after the loan is approved but some lenders may request the arrangement fees earlier to cover their work in case you don’t accept their offer. Arrangement fees are usually 1% -2% of the loan amount for loans up to £1 million for a commercial property mortgage.
Valuation Fees: A valuer will visit the property and write a report to the lender. Commercial valuations can start at around £500 for a simple case, the fees are based on an individualised quotation which is payable to the lender after an initial indicative offer has been accepted.
Legal Fees: You’ll need to pay both your own legal fees as well as the lender’s which can start at around £500 for each party.
Broker fees: A broker gives you advice specific to your situation and real estate and presents your case to the lenders. Their service is usually charged at up to 1% of the loan value.
Eligibility and Criteria for Commercial Loans
In order for you to qualify for a commercial mortgage, you’ll need to pass the lender’s eligibility checks which usually includes:
- The cash flow and any debts you may owe to assess the financial health of your company
- Your businesses’ projected income to determine whether you can cover the cost of the loan
- Your ability to pay the deposit which can range from 20% to 40% of the loan
- Rental income may also be taken into account as this will have an effect on your business’ cash flow
- General income, credit and assets
What information would I need to provide for Commercial Finance Lending ?
- Applicant company name & Ltd Company number.
- Full property address.
- Sales and Purchase agreement
- Personal or Directors & significant shareholders CV’s or Biographies.
- Copy of the tenancy agreement.
- Rental income proof
- Detailed build costs for renovations or conversions
- Schedule of proposed works
- Details of the professional team (contractor, architect, structural engineer, CDM coordinator etc).
- Procurement Method ( Design & Build or Construction Management?).