Deutsche Bank is planning Germany's first true sale commercial mortgage-backed securities deal, and more are likely on the way. It is planning to securitize a single E550 million loan originated by its conduit. The loan was made to London-based Stadium Real Estate for the 753,000 square foot Centro Oberhausen shopping mall in Oberhausen, Germany, says John Nacos, head of real estate debt markets in Europe.
Nacos says there is no question Deutsche Bank will be doing more German CMBS transactions. His group concentrates on originating loans in the U.K., France, Germany and Italy.
Until now there have only been synthetic CMBS deals from Germany. However, synthetic CMBS deals were not popular with investors, in part because they permitted for loan substitution in the underlying pool, so if a loan repaid, the issuer could put in another. But, with the recent passage of an amendment from the German Bundesrat permitting cash securitizations, Deutsche Bank's deal is possible. It should come to market in September or October.
Analysts and bankers say there will not be a flood of new German cash CMBS deals in the near future. "It is going to be a while until issuers become comfortable with CMBS technology, but there eventually be more funded deals," says one London-based CMBS analyst.
Still, German banks are the largest owners of real estate in Europe and among the largest commercial mortgage lenders, says one CMBS banker. He predicts that German banks in need of regulatory capital relief will consider a variety of CMBS as part of their balance sheet management options. The regional Landesbanks, HVB Group, EuroHypo, Wuerttembergische Hypothekenbank and Westdeutsche ImmobilienBank are said to be in the forefront of potential issuers.
