German perspective for the Dutch real estate investor

In the Dutch real estate market, a tsunami of expensive refinancing is looming. According to De Nederlandsche Bank (DNB), by the end of 2022, around €200 billion in real estate loans were outstanding at Dutch banks. Roughly half of this debt, totaling around €100 billion, needs to be refinanced in the coming years.

With the sharp rise in interest rates, refinancing has become significantly more expensive than a few years ago. Combined with increased construction costs, this puts significant pressure on the wallets and returns of real estate investors and developers. Furthermore, uncertainty remains high for this group, as an increasingly large portion of real estate loans are provided by Dutch banks and other real estate financiers at variable interest rates.

So, it’s high time to look across the border to see if things can be better and cheaper.

Novel Finance is an expert in international real estate financing and has built a stable and professional network of banks and financiers, particularly in Germany. For over 20 years, we have regularly visited Germany to maintain our network.

We see several advantages that German banks currently offer:

  • Interest rates are generally lower
  • Loan durations are longer
  • Existing financings are often transferable
  • Conditions for real estate developers and builders are also favorable in Germany

German banks have a higher ticket size than in the Netherlands: most parties have a minimum financing value of EUR 20 million, with a few requiring EUR 5 to EUR 10 million. The Loan to Value (LTV) is generally lower, preferably around 50%, but usually limited to 60%.

Interested or want to know more? We are here to provide advice and obtain the best rates and conditions for you from the international market.

Contact us to schedule a meeting for a discussion and analysis of your specific situation and financing needs.