Commercial property loans often bigger than current valuations

A quarter of the commercial property loans made by Dutch banks are bigger than the value of the property itself, the Financieele Dagblad reports on Friday.

At the same time, some 30% of the €80bn in loans need to be refinanced this year, the paper says. It bases its claims on information included in the central bank’s half-yearly statement published on Thursday.
The bank and financial services regulator AFM are currently looking into risks attached to the property portfolios of banks, insurance companies and pension funds.
In Thursday’s report, the bank states ‘around 25% of the property-related loans are bigger than 100% of the guarantee’. It is also notable that these figures are based on ‘dated valuations and do not reflect the latest developments’ on the market, the bank said.
Uni-Invest recently sold its property portfolio at a 40% discount.

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