The strong positive momentum seen in European commercial real estate lending throughout 2014 showed no signs of abating during the first quarter of 2015. In a sector characterised by a high volume of investment deals, debt was widely available from a variety of lenders including banks, institutional investors and private equity funds.

1. 1Q15
EUROPEAN CRE
FINANCE REPORT
OVERVIEW 2
UK LOANS 3
GERMANY LOANS 4
NETHERLANDS LOANS 4
DEALS IN FOCUS 5
SOUTHERN EUROPE LOANS 6
LOAN PORTFOLIO SALES 7
LOAN PORTFOLIOS FOR SALE 9
IRISH CRE ANALYSIS 10
CRE FINANCING INDEX 11

2. EUROPEAN CRE FINANCE REPORT
1Q15
2
The strong positive momentum seen in European commercial real estate lending throughout
2014 showed no signs of abating during the first quarter of 2015. In a sector characterised
by a high volume of investment deals, debt was widely available from a variety of lenders
Including banks, institutional investors and private equity funds.
Tight pricing was the key talking point of the quarter. In March, the
CBRE Capital Advisors’ Four Quadrants report showed that prime
lending margins were as low as 130 basis points and had arguably
reached a point of stabilisation, partly as a result of capital
adequecy regulations. Borrowers entered 2015 in a favourable
position, the research found, with the total cost of debt falling by
29% during 2014, due to margin compression and a decrease in
swap rates.
UK senior debt margins for prime property reached a low of 110 bps during the first quarter and
as tight as 60 bps in Germany, according to Debtwire’s pricing index. Lenders polled by this
news service said LTVs for UK senior debt were found at 60-65%, while in Germany senior LTVs
could go as high as 80%, at the end of the quarter.
The rise in bank lending against property was partially fuelled by low interest rates and partly by
quantitative easing. “QE has produced a swathe of global investors in the prime real estate
markets worldwide, in both equity and debt, who reference returns on real assets to corporate
bonds, and see value where there is a yield uplift which they consider a sufficient illiquidity
premium,” said Emma Huepfl, head of capital management for investment management firm
Laxfield Capital. “The secondary property market reflects property fundamentals more closely,
which in turn is more reflective of the local rather than international economy.”
“We are seeing gradually increasing numbers of requests for finance for secondary assets, and
lenders are getting more comfortable with lending in the better locations, where rents are ris-
ing, and we are still a good way off [from] over-supply,” Huepfl continued. Secondary margins
have come down significantly, to as low as 175 bps, according to one market source.
CBRE said that the proportion of debt in investment transactions remained far below the long-
term average. The percentage of investment turnover funded by debt was 34% during 2014; a
long way from the 69% seen in 2007, the market peak.
OVERVIEW
Tight pricing
was the key
talking point
of the
quarter
“We are seeing a variety of interesting capital in the [CRE] debt market,” said Huepfl. “More
investors are agnostic about whether they invest in the equity or debt, and are actively seeking
complex transactions, or stress in the capital structure where they can use their flexibility of
capital to gain enhanced yield.”
Lenders’ search for returns has led them into peripheral markets such as the Netherlands,
Spain, Italy and Ireland. In the Irish market, for instance, assets acquired through private equity
loan-to-own strategies started to come back for refinancing, with some domestic sponsors also
seeking finance opportunities.
The market for distressed debt continued to provide opportunities for new loan origination.
Loan-on-loan finance was increasingly available, market players said. For example, during the
first quarter, Citi provided a GBP 500m senior loan to Cerberus Capital Management for its
purchase of the GBP 1bn face-value Project Carlisle UK loan book from Nationwide for GBP
680m. The three-year loan (with two one-year extensions) carried a circa 300 bps margin. In a
February 2014 loan market report, Cushman & Wakefield said that loan-on-loan margins during
2013 had tightened to between 400 bps and 600 bps, with 300 bps seen in some instances.
Despite the competitive nature of the debt market with more lenders than ever to choose from,
existing lenders remained best positioned. “Incumbent lenders are in a good position to retain
business,” said one market participant, speaking in private. “We see a lot of deals go out to the
debt market, only to be refinanced by existing lenders. From a borrower’s perspective, it is often
easier to stay with a lender rather than have to start the documentation all over again with a
new party. Of course the lender still has to prove it is able to match the most competitive
terms.”
The syndication market was also active. The GBP 365m loan wrote by ING to finance the Safra
Group’s purchase of the Gherkin in the City of London was successfully placed with a number of
banks including three from Japan GBP 230m
was sold down to three of the banks, while a
fourth slice of less than GBP 50m was also
syndicated. In addition, Lloyds and Citigroup
went out to the market to sell down a portion
of the GBP 277m loan which they wrote to
The Peel Group and Legal & General, secured
by the MediaCityUK estate in Greater
Manchester.
Sector LTV (%)*
Margin
(bps)*
UK senior 60-65 110-225
UK mezz 60-80 500-900
Germany senior 60-80 60-175
Germany mezz 75-80 650-850
UK & German loan margins on prime property
*Figures are informal estimates by five European
bankers polled by Debtwire

3. EUROPEAN CRE FINANCE REPORT
1Q15
3
At the prime end of the spectrum, the UK commercial real estate finance market remained
busy and very competitive during the first quarter of 2015. Tight pricing continued to be a
major theme during the quarter, as it was during 2014 when prime margin compression was
evident. However, some market participants argued that margins have reached a point of
stabilisation, with no significant downward shift during the quarter. Borrowers did not seek
higher LTVs, with potential interest rate rises and refinance risk limiting day-one leverage.
Lenders were holding on tight on covenants too.
Finance was widely available for buyers of prime
London commercial property, with banks and alterna-
tive lenders alike providing significant loans to finance
major deals during the first three months. One example
was Lloyds Bank Commercial Banking’s GBP 200m-plus
loan to finance the purchase of the Tower Place office
building in the City of London. The deal was an example
of a major clearing bank providing debt for a well-
heeled core buyer – in this case Chinese insurance firm
Ping An – backed by a prime London office property.
However, the quarter also saw several instances of lenders looking outside the prime space and
into the regional and value-add sectors of the market to source deals. For some, this meant
writing loans against some of the country’s prime regional office stock. In March, Lloyds and Citi
provided GBP 277m, reflecting a 55% LTV, to the owners of the MediaCityUK scheme in Greater
Manchester – The Peel Group and Legal & General. The 37-acre MediaCityUK is one of the
country’s flagship developments of the last decade and is exactly the type of prime regional
stock banks are eager to finance. But such opportunities do not appear too often.
Regional portfolio transactions provided opportunities for lenders to gain exposure to UK prop-
erty during the quarter. Wells Fargo and Royal Bank of Canada provided senior debt to Lone Star
for its GBP 1bn purchase of retail, office, hotel, and residential property as well as student
accommodation from two Moorfield funds. The circa GBP 600m five-year deal carried a margin
in the high 200 bps, as reported.
Another portfolio deal was Aviva Commercial Finance’s GBP 325.3m vendor finance to Kennedy
Wilson Europe Real Estate to facilitate the GBP 503m sale of 180 mixed-use UK properties by
Aviva. The 70% LTV deal was split into three tranches paying a weighted average margin of
207bps.
UK loan origination
Finance was widely
available for
buyers of prime
London commercial
property
Elsewhere, Barclays provided a GBP 96m whole loan to a
Harbert Management Corporation subsidiary in January to
finance 807,000 sq ft of UK business park properties. The 70%
LTV loan was backed by properties bought from Arlington
Business Parks and located in places such as Oxford, Leicester,
Sunderland and Glasgow.
Barclays also financed Oaktree and Patrizia’s GBP 127m
purchase of the Citrus portfolio of UK properties, with a circa
GBP 70m four-year loan alongside DRC Capital which provided
GBP 24m of mezzanine debt. The collateral was 24 properties
located across the UK ranging from offices in the City of London to a distribution warehouse in
Haverhill.
Lenders also sought exposure to the London market, by financing less core properties. German
bank LBBW provided GBP 97m to refinance CLS’s Spring Gardens property, located in the
Vauxhall area of the city, south of the River Thames. Lenders also looked to finance value-add. A
good example is BNP Paribas’s GBP 90.4m loan to Tishman Speyer for 100 New Oxford Street.
The building is in the process of being bought by Tishman Speyer and is a scheme in the heart of
London with significant uplift potential (see deals in Focus).
Lenders also
sought exposure
to the London
market by
financing less
core properties

4. EUROPEAN CRE FINANCE REPORT
1Q15
4
The German property lending market has traditionally been one of the most competitive in
Europe, both in terms of pricing and LTVs. The simple reason is that the country has too
many banks – from local savings banks to Landesbanken – willing to finance property. Plus the
Pfandbrief market remains an easy and cheap way to refinance. Domestic banks have always
preferred core properties. However, core properties accounted for only 40% of new business
last year compared with 60% in 2013, according to the German property lenders index (Difi).
The index rose by 10.2 points from the fourth quarter to 39.1 points, its highest level ever.
German banks stretching further into non-core is potentially bad news for foreign banks. Non-
core assets have normally been their preserve. For example, in the first quarter, both Bank of
America Merrill Lynch and SEB wrote big tickets against non-prime assets.
BAML provided German property company IVG Immobilien
with a EUR 470m loan for the SQUAIRE property outside
Frankfurt. The loan represented a 70% LTV, with the margin
coming in at less than 250 basis points. The refinancing of the
property came after IVG failed to sell the asset following
heavy marketing by CBRE. IVG sought around EUR 700m,
compared with a book value of EUR 800m, but serious bids
did not go beyond EUR 600m. It is suspended above the
railway tracks at Frankfurt airport, with KPMG as the main tenant. The big question is whether
KPMG will remain in situ, its employees are rumoured to be unhappy about the location.
SEB financed another difficult Frankfurt property. The Swedish bank provided a five-year loan to
Blackstone for its purchase of the 257m tall Messeturm office tower for around EUR 250m. The
62,000 sq m property suffers from small floor plates and has a vacancy rate of around 30%.
More importantly, the tower’s location is not prime sitting outside Frankfurt’s banking district.
SEB syndicated parts of the loan to two other unnamed banks. Blackstone bought the
MesseTurm around the same time as Pollux, a vacant office tower in Frankfurt’s banking district.
Deutsche Bank financed that one.
German loan origination
Core properties
accounted for
only 40% of new
business last year
Domestic lenders are making a comeback in the Netherlands. While FGH and SNS Propertize
remain burdened by their legacy loans, ABN Amro and ING are stepping up their lending
activities, albeit on a selective basis. However, ABN Amro recently noted that foreign financiers
retain a dominant position in major deals. It listed Royal Bank of Canada and Deutsche Hypo as
well as non-banks such as debt funds, as the main players.
In January, ING provided EUR 140m of debt to a secondary office portfolio bought by Valad on
behalf of an unidentified investor. The five-year senior loan was made at around 210 basis
points, and 60% LTV. The portfolio, sold by Unibail-Rodamco, consists of three buildings in
Rotterdam, one in Almere, one in Delft and one in Zoetermeer. The biggest building in the
portfolio is the 33,442 sq m Central Plaza in Rotterdam, which also has 480 parking spaces.
The Dutch residential sector saw plenty of lending activity
in the first quarter. Investors see potential upside from a
liberalization of social housing sector and increasing
demand for houses due to a continuing fall in home prices.
In February, ING took part in a consortium of three banks
to provide a EUR 331m loan for the EUR 578m purchase of
5,500 residential units in the Netherlands by German
Investor PATRIZIA Immobilien for its Wohnmodul I vehicle. The three banks are each taking a
third of the debt, paying an all-in interest rate of 2%. Deutsche Hypo acted as mandated lead
arranger, agent and bookrunner, ING Real Estate Finance as MLA and pbb as co-arranger.
Interestingly, the loan came out of ING Germany as the Dutch bank’s cost of capital is lower
there. ING’s retail savings services have been successful in Germany, leading to a surplus of cash
to allocate.
Dutch residential is also on ABN Amro’s menu. The bank financed two acquisitions by Round Hill
Capital. The private equity firm completed on two Dutch residential portfolios totalling 958 units
across approximately 84,600 sq m for a combined value of approximately EUR 98m. It has also
completed on a 976 unit Propertize portfolio that Round Hill which it agreed to acquire for EUR
89m in December. Round Hill is currently looking for debt for its EUR 365m purchase of the WIF
portfolio. Although the deal was agreed last year, it still has not closed as the Dutch interior
minister needs to give his approval. Meanwhile, a number of social housing corporations –
which sold their stock to WIF in return for a stake in the fund – are objecting to the deal, arguing
refinancing is a better alternative than an outright sale.
Netherlands loan origination
Domestic lenders
are making a
comeback in the
Netherlands

5. EUROPEAN CRE FINANCE REPORT
1Q15
5
BNP Paribas backs London value-add
BNP Paribas took what most observers would probably agree was a calculated gamble on the West End of London during
the quarter. The French bank wrote a GBP 90.4m, six-year senior loan to property investor Tishman Speyer for the purchase
of 100 New Oxford Street; a mixed-use office and retail block close to the Centre Point tower on the eastern edge of the
West End.
The deal was a good example of a lender gaining exposure to value-add opportunities in the increasingly tight London
market. The 103,500 sq ft 100 New Oxford Street building is a bit of a fixer-upper. Sold by Canada Pension Plan Investment
Board and Hermes Real Estate in a deal expected to close in May, Hermes is in the process of refurbishing elements of the
building before it changes hands. Three floors are currently being revamped. Vacancy in the building – which Tishman stated
was around 50% back in January - is also being tackled, with office and retail space under offer when Debtwire reported the
loan in February.
The associated financing reflected the asset management potential of the building. BNP Paribas’s loan was structured pre-
dominantly as acquisition finance, alongside a GBP 5m tranche intended to cover costs while the existing vacancy is filled up.
The pricing of the loan reflected the value-add status. The margin was written at 175bps over Libor from day one, although
it is due to reduce to below 150bps once the majority of the building is leased.
V&D refinancing target missed
Dutch department store V&D is causing financiers a headache. The ailing retail chain just about survived in the first quarter
thanks to a rescue package in which landlords, banks and the owner, Sun Capital, pulled together. Sun Capital desperately
needs a new formula to bring customers back to the former icon of the Dutch high street. V&D’s concept of offering
everything to anybody no longer works. Retail spending is sluggish, an increasing number of consumers are buying online.
Meanwhile, landlord IEF Capital missed a February refinancing target of around EUR 200m due to the problems at V&D. IEF
Capital is gradually refinancing a EUR 1bn retail property portfolio whose loan – securitised in Leo Mesdag – matures in
2016. In addition to V&D stores, the portfolio contains stores let to loss-making Hema, a Dutch version of M&S, and
upmarket department store Bijenkorf. The latter is the only one out of the three doing well after adopting the shop-in-shop
concept.
To avoid balloon risk at maturity, last year IEF asked CMBS noteholders for permission for a staged refinancing. The
bondholders reluctantly agreed after IEF Capital promised to inject EUR 40m of fresh equity. But that was before problems
with V&D came to a head. V&D accounts for 18% of rental income in the Leo Mesdag CMBS. Under the refinancing deal, IEF
Capital agreed that V&D should not account for more than 25% of the property pool to be refinanced at any one time. This
could be more problematic at the next refinancing date in August, when IEF has to refinance EUR 400m or more.
Loan size GBP 90.4m
Lender
BNP Paribas Corporate and Institutional
Banking
Borrower Tishman Speyer
Term 6 years
Acquisition price c. GBP 130.00m
Margin 175 bps (to reduce to sub-150bps)
Loan size EUR 1bn
Lender Leo Mesdag CMBS
Borrower IEF Capital
Country Netherlands
Asset type Retail
DEALS IN FOCUS

6. EUROPEAN CRE FINANCE REPORT
1Q15
6
The search for returns has led lenders outside of the core European markets of the UK,
France and Germany and into peripheral geographies including Spain and Italy. However,
each country has its individual challenges and market participants said that it can be difficult to
source the right deals.
During the first quarter of 2015, there were a few
examples of banks providing debt finance outside
core Europe. Italy is a geography which almost every
market player claims to be looking at, although a
limited number seemed to be closing deals.
In March, Debtwire reported that Bank of America Merrill Lynch (BAML) was lined up by
Cerberus Capital Management to finance its EUR 230m purchase of a portfolio of seven public-
sector leased buildings in Italy from the Fondo Immobili Pubblici (FIP) fund. Once the deal clos-
es, BAML will provide a loan with a circa 65% LTV with a margin of just less than 300 basis
points.
It seems that the lender’s relationship with, or confidence in, the sponsor is paramount in Italian
deals. In BAML’s case it is lending to a borrower with a strong track record in opportunistic
European investment. Previous deals in the country have included Deutsche Bank financing
Blackstone’s acquisition drive, providing loans that were subsequently securitised.
During the quarter, ING provided a EUR 63m five-year loan secured by Credit Suisse’s Milan
offices. In this case, the loan was written to a holding company incorporated in the Qatar
Financial Centre. The property securing the facility is an 11,000 sq m prime office building locat-
ed in Via Santa Margherita 3 in Milan, bought by Qatar Investment Authority in the second
quarter of last year from Tishman Speyer for EUR 108m, according to Knight Frank’s Milan Office
Market Outlook research. Using that purchase price, ING’s loan reflected circa 58% loan-to-
value.
The Spanish market looks set to provide lenders with significant opportunities during 2015.
According to Savills’ Spain Investment Market Report in February 2015, the retail investment
volume for 2014 was more than EUR 2.3bn, in line with 2006’s figures. Offices were in the
region of EUR 2.8bn. SOCIMIs were lauded as one of the main factors in the market upturn,
accounting for almost a third of total investment volume last year.
Southern Europe loan origination
Italy is a geography
which almost every
market player claims
to be looking at
During the quarter Allianz Real Estate wrote a EUR 133.6m ten-year loan to Spanish SOCIMI
Merlin Properties to finance its acquisition of the Marineda Shopping Centre in A Coruña. It is
Spain’s second largest commercial and leisure complex and the borrower is one of the country’s
most active real estate investment trusts.
Italy – a fertile ground for securitisation
The arbitrage between CMBS and bilateral lending is most pronounced in jurisdictions where
finance is not readily available, or in size. Italy is proving to be one of these geographies and was
the setting for two new deals during the quarter.
Bank of America Merrill Lynch launched its Taurus 2015-IT in January, which investors
welcomed due to its straightforward structure and strong sponsors. The EUR 286.39m deal
securitised three loans and featured three tranches. All the notes have a February 2020
expected maturity.
The multi-borrower deal read like a roll-call of some of the most active private equity investors
in the Italian sector. It comprised the EUR 101m Calvino loan sponsored by Cerberus, the EUR
85m Fashion District loan sponsored by Blackstone and the EUR 115m Globe loan, sponsored by
Orion Capital Managers.
The EUR 206m A-class priced at 150bps (from initial price thoughts around 140bps), while the
EUR 23m B-class priced at 190bps (from IPTs at 180bps), and the EUR 34.3m C tranche priced at
250bps, in line with the IPTs.
More than 20 investors bought into the deal, of which 79% went to the UK. Dutch investors took
10%, Italians 6% and investors in other jurisdictions took the remaining 5%. Asset managers
were the largest group with 80%, insurance companies and pension funds took up 10% and
hedge funds and banks the remaining 10%.
Just two investors bought the privately placed TIBET CMBS backed by super prime retail space in
Milan. The EUR 203m deal — launched by Banca IMI and Cairn Capital — refinances an existing
syndicated loan for sponsor Giuseppe Statuto and consists of four rated tranches. The EUR
105m A, EUR 27m B and EUR 10m C notes were placed with one investor while class D went to a
second. The margins ranged from 165bps for the A tranche to 415bps for the BB rated D
tranche.

7. EUROPEAN CRE FINANCE REPORT
1Q15
7
The first quarter of 2015 was relatively quiet in the European loan portfolio space, following
a frenzy of business at the tail end of 2014. Cushman & Wakefield’s corporate finance team
said that a record-breaking EUR 80.6bn of CRE loans and real estate-owned (REO) properties
were sold last year across Europe. This year is tipped to be huge once again for loan sales (C&W
predicts EUR 60-70bn of CRE loan and REO transactions), suggesting the first quarter may be the
calm before the storm.
Last year saw huge volumes traded in Ireland, but the first quarter was quieter. In March, Per-
manent TSB said it had sold EUR 1.5bn of non-core loans – known in the market as Projects
Munster and Leinster – to a vehicle funded by Deutsche
Bank and funds affiliated with Apollo Global
Management. The loans were sold for EUR 800m, a 47%
discount to face value. Permanent TSB is preparing for sale
the final portion of its non-core Irish loans; the EUR 900m
Project Connacht containing buy-to-let mortgages and CRE
loans, the Irish Independent recently reported.
The National Asset Management Agency (NAMA) closed the sale of Project Boyne to Deutsche
Bank. The portfolio with a face value of EUR 287m sold for around EUR 95m. Boyne was not a
huge portfolio by Irish loan market standards, but was typical of the mid-sized single borrower
portfolios that NAMA is expected to bring to the market in the coming months. Boyne related to
the entrepreneur William Smyth and contained debt secured by property including serviced
offices in Dublin.
NAMA spent the quarter preparing new portfolios, including the EUR 8bn-plus Project Arrow, a
granular portfolio to contain loans written to in the region of 500 borrowers. Other banks such
as Lloyds Banking Group and Ulster Bank, the Irish arm of Royal Bank of Scotland, still have the
remainder of their Irish loan books to offload, and more sales are expected. As one debt special-
ist told this news service recently: “If you are a bank and have a tail, it’s worth getting it into the
market now. Good assets will appreciate. The tail won’t”.
Loan sales have been thin on the ground in Germany. Last year, they fell 45% compared with
the year before, according to Cushman & Wakefield. But there are signs the flow is increasing
once again. In the first quarter, Goldman Sachs and Wells Fargo sold two loan portfolios.
Goldman Sachs’ asset manager, Archon, sold Project Wagner, a EUR 650m portfolio of 600 loans
to EOS Group for around EUR 100m. Wells Fargo sold a EUR 60m loan portfolio secured against
Loan portfolio sales
This year is also
tipped to be a
huge one for loan
sales
10 German nursing homes to Bank of America Merrill
Lynch.
Commerzbank is launching a EUR 800m sale of loans made
by Eurohypo, and Helaba has started to market a EUR
500m loan sale under the name Project Aurora. Contrary to
their European peers, German banks resisted large loan
sales so as to avoid painful write-downs. But with the market improving and investors hungrier
for riskier assets in Germany, they may have been proven right to wait after all.
Dutch banks were also slow to sell down their loan books, but the few deals have generated a
lot of investor interest. FGH and HSH sold a loan secured against an office portfolio, called
Project Omega, to Archon and Valad. The properties were bought at the top of the market by
Dutch investor and asset manager Ping Properties.
ING sold a loan secured against another Ping Properties portfolio, Project Ogon. ING sold Ogon
for around EUR 60m to Apollo Global Management compared with a face value of EUR 100m
and a EUR 70m guide price. Although the loans involve the same borrower, the sales were
different. There was no longer a role for Ping Properties following the sale of Omega, whereas it
continues to be the owner and asset manager of Ogon. Meanwhile, FGH is still touting around a
EUR 250m Dutch loan portfolio through PWC. The portfolio consists of loans secured by office
properties bought by German fund manager Wölbern Invest.
Southern Europe was quiet for loan sales in the first quarter. Just before year-end SAREB
confirmed loan sales with a combined face value of EUR 847m had been sold to various buyers
including Cerberus and Hayfin Capital Management.
Attention in Spain in the first quarter was mostly fixated on Project Gaudi, a circa EUR 750m
portfolio held by German bad bank FMS Wertmanagement. As this report went to press, Colony
Capital and Oaktree Capital Management were the final two parties shortlisted to buy the
portfolio for between 60 and 70 cents in the Euro.
The UK had a quiet quarter. In February, Kennedy Wilson Europe Real Estate bought eight loans
secured by Park Inn hotels leased to Rezidor Hotel Group and located across the UK for GBP
61.5m. Market observers do not expect the UK market to be a major focus of NPL sales during
the course of 2015.
The Southern
European market
was quiet in terms
of loan sales

8. EUROPEAN CRE FINANCE REPORT
1Q15
8
LOAN PORTFOLIO SALES
Date
reported
Portfolio
name
Seller(s) Buyer(s) CUR
Sale price
(m)
Property
type
No. of
properties
Country
Original face
value (m)
Seller’s
financial
advisor
Notes
09-Jan-15 Project Omega
FGH Bank, HSH
Nordbank
Goldman Sachs EUR Office 24 Netherlands
The property transaction had
a volume of EUR 109m, ac-
cording to an entry in the
Dutch land registry
13-Jan-15 Project Boyne
National Asset
Management
Agency
Deutsche Bank EUR 95.00
Office,
retail,
residential
Ireland 287.00 JLL
The purchase price reflects a
discount to par value of
around 67%
14-Jan-15
National Asset
Management
Agency
Invel Real Estate
Partners
GBP
Retail,
residential
UK, Italy c.140.00
The collateral is located in
Liverpool, South East
London and the Italian island
of Sardinia
16-Jan-15
Project
Wagner
Archon Group EOS Group EUR c. 100.00 Real estate Germany 650.00 KPMG
16-Jan-15 Project Helios Wells Fargo
Bank of America
Merrill Lynch
EUR 60.00 Care home 10 Germany 80.00 Ernst & Young
BAML bought the loans at an
11% to 12% discount to the
outstanding balance of EUR
60m
11-Mar-15 Project Ogon ING
Apollo Global
Management
EUR 60.00 Office Netherlands Cofiton
EUR 100m outstanding bal-
ance, the bank had sought a
price of around EUR 70m
11-Mar-15
Projects
Munster and
Leinster
Permanent TSB
Deutsche Bank/
Apollo Global
Management
EUR 800.00
CRE and
buy-to-let
residential
c.1,600 Ireland 1500
Morgan
Stanley
PTSB confirmed the buyer on
26 March.
31-Mar-15 PVE Capital EUR c. 183.00 Residential Italy 408
Purchase price is based on
information that portfolio
sold for 45 cents in the Euro

9. EUROPEAN CRE FINANCE REPORT
1Q15
9
 Project Arrow: Ireland’s National Asset Management Agency (NAMA) has instructed
Cushman & Wakefield and partner firm Lisney to sell loans with a face value of EUR
8.4bn, relating to up to 500 borrowers and secured by around 3,000 properties. Around
half of the collateral is residential, with the remainder made up of CRE (20%), land
(20%) and other types including hotels (10%). The portfolio was yet to be launched as
the report went to press.
 Project Milner: NAMA, through Cushman & Wakefield, is aiming to sell a EUR 778m
face-value NPL portfolio relating to Irish entrepreneur Gerry Barrett, secured by ten
properties including three Irish hotels, plus retail assets.
 Project Lee: The circa EUR 300m portfolio, which is being sold by NAMA, contains debt
secured by the Mahon Retail Park in Mallow, County Cork, among other assets. The
debt relates to Cork-based developer Owen O’Callaghan.
 Project Connacht: In March, the Irish Independent reported that Permanent TSB was
preparing to sell its remaining EUR 900m of Irish non-core loans including buy-to-let
mortgages and CRE debt.
 Project Gaudi: German bad bank FMS Wertmanagement mandated Cushman & Wake-
field to sell EUR 750m across 18 loans secured by Spanish (and some Portuguese) col-
lateral. Notable properties include the Hotel Arts de Barcelona as well as the Penha
Longa Hotel & Resort in Cascais, Portugal. The portfolio contains 18 loans, roughly
equally divided between performing, sub-performing and non-performing. At the time
of writing, Colony and Oaktree had been shortlisted.
SELECTED LOAN PORTFOLIOS FOR SALE
 Eurohypo loans: Commerzbank is selling a EUR 800m German portfolio and a EUR 3bn
pan-European portfolio of loans, written by Eurohypo (now called Hypotheke
bank Frankfurt). Four private equity firms (Cerberus, Colony, Oaktree and Lone Star)
are thought to be through to the second round of the pan-European sale, with second
round bids due by the end of April. The same parties are also thought to be in the race
for the German book.
 Project Tristan: Goldman Sachs’ asset manager Archon has instructed KPMG to sell a
circa EUR 800m loan portfolio consisting of around 700 loans, secured by CRE across
Germany.
 FGH Bank loans: The Dutch bank is selling a circa EUR 250m loan portfolio backed by
Dutch offices. PwC has been mandated to sell the loans. The portfolio comprises loans
secured by office properties bought by German fund manager Wölbern Invest, which
filed for insolvency in 2013.
 Project Aurora: Lazard is selling a EUR 500m NPL portfolio on behalf of an unidentified
bank. Sources told Debtwire that the seller is believed to be Helaba.

10. EUROPEAN CRE FINANCE REPORT
1Q15
10
Ireland’s commercial real estate market is at an interesting
juncture. Since 2012, US private equity firms have
pounced upon loan portfolios secured by real estate. The
prime part of the market has experienced a significant
recovery in the intervening years, putting Ireland on core
investors’ radar.
“Ireland can no longer be classified as a distressed market. It has reached the point where
private equity firms are not the leading bidders for single assets,” said Adrian Trueick, Irish in-
vestment property director with Knight Frank.
Private equity funds are still keen to invest. Real estate loans with a face value of EUR 20bn
were traded during 2014, according to research by Lisney. However, there has not yet been an
overwhelming volume of properties put back onto the market.
“We sense that the key occupancy markets are still relatively early in the cycle,” said Peter
Collins, Dublin-based managing director of Kennedy Wilson Europe. “By and large we are
holders of property and we still see a lot of upside potential because we are essentially real
estate operators.”
Although NPL buyers are not clambering for the exits, some higher quality properties have been
sold. In February, Hibernia REIT bought the Garda headquarters at Dublin’s Harcourt Square for
EUR 70m from a subsidiary of Starwood Capital. Starwood had acquired loans secured by the
property through the purchase of NAMA’s Project Aspen loan portfolio in 2013.
Local property consultants admit that it is difficult to guess what the Irish CRE investment
market will look like once the private equity frenzy has died down. Last year’s investment
volumes were unprecedented. Lisney recorded EUR 4.4bn of investment turnover, up from EUR
180m just three years earlier.
“The real question is will there be enough capital to deal with the unwinding of loans and assets
which takes place in 2016 and 2017,” said John Moran, managing director of JLL’s Irish
operation. “Who are the secondary buyers? Will the market remain international or revert to a
Irish CRE
An opportunistic market matures
(This is an abridged version of a feature published by Debtwire on 4 March 2015)
Ireland can no
longer be
classified as a
distressed market
more domestic nature? It is hard to know where our normal level is.”
As occupier demand and rents in the prime Dublin market recover, core buyers including REITs,
institutions and European funds are entering the fray. In February, NAMA sold the adjacent 4
and 5 Grand Canal Square office buildings – Facebook’s EMEA HQ – for EUR 232m, a net initial
yield of just more than 4%, hardly the type of return to attract opportunistic money. The buyer
was Union Investment, the investment management arm of Germany’s DZ Bank.
Prime Dublin office rents increased by 36% to EUR 45 per sq ft during 2014, according to Lisney,
and further growth to more than EUR 50 per sq ft is expected by many agents. Office yields in
the Irish capital have come in from 6% at the end of 2013 to 4.75% at the end of 2014.
“The office market has definitely shifted towards the core buyers, so a lot of the opportunistic
players are looking at retail,” said Johnny Horgan, head of capital markets for CBRE in Ireland.
Central Dublin shops might yield 4%, but provincial shopping centres can provide investors with
running yields of over 7%, Horgan added.
The sell-off of Ireland’s CRE debt is not over yet. Cushman & Wakefield Corporate Finance said
in the last quarter of 2014 that it was tracking EUR 21.7bn of live loan sales, of which 21% were
in Ireland. Market sources said that Ulster Bank is working up another large loan sale to follow
the Projects Aran and Achill which were sold last year. NAMA is working up plans for the sale of
Project Arrow through Cushman & Wakefield and Lisney; a EUR 8.4bn face value portfolio of
loans predominantly secured by Irish property relating to around 500 borrowers.
“In the NPL and debt arena there are still plenty of
opportunity funds looking for exposure. Some are express-
ing the view that the market has become too expensive
from a value perspective, but they keep bidding,” said one
agent.
The financing market provides opportunities for debt
players eager for exposure to the Irish recovery, local
agents argued. The Irish debt market is not functioning efficiently at the moment, although
more banks and non-traditional lenders are looking for opportunities, sources said.
The sell-off of
Ireland’s CRE
debt is not over
yet

11. EUROPEAN CRE FINANCE REPORT
1Q15
11
CRE FINANCING INDEX
Date
reported
Asset(s) Lender(s) Borrower(s) CUR
Loan
size (m)
LTV
(%)
Margin
Loan
length
(y)
Country Asset type Notes
05-Jan-15 Six Dutch offices ING Valad Europe EUR c.84.00 c. 60 c. 210bps 5 Netherlands Office
Purchase made by Valad Europe on
behalf of an unidentified investor
16-Jan-15
Building 7 at
Chiswick Park
BNP Paribas Corporate and
Industrial Banking
Blackstone Real Estate
Partners Europe III
GBP 76.50 3 UK Office
The 331,000 sq ft building was
under construction at the time the
loan was closed
20-Jan-15
Silberturm,
Jurgen-Ponto-Platz 1
ING Real Estate Finance
Korean Samsung SRA
Management Group
EUR c. 450.00 <85bps Germany Office ING syndicated part of the loan
23-Jan-15 Emperor Portfolio Barclays
Harbert Management
Corporation
GBP 96.00 70 UK Office
Whole loan to finance 807,000 sq ft
portfolio of business park
properties
23-Jan-15 Tower place
Lloyds Bank Commercial
Banking
Ping An Life Insurance GBP c.200.00 >60 5 UK Office
The 385,000 sq ft tower was sold to
Ping An by Deutsche Asset and
Wealth Management
28-Jan-15 Brettenham House
DRC Capital, Standard Life
Investments
Draco Property GBP 65.00 5 UK Office, retail
The senior portion of the loan has
been placed with Standard Life
Investments. It refinanced existing
debt
28-Jan-15 Residential units BNP Paribas Powerhouse France EUR 793.50 France Residential
The refinancing comprises a EUR
206m corporate facility provided to
Powerhouse France and a EUR
588.5m senior mortgage facility
provided to its subsidiary, SAFRAN
30-Jan-15 Citrus portfolio Barclays, DRC Capital
Oaktree Capital
Management, Patrizia
Immobilien
GBP c. 94.00 c.75 4 UK
Office,
industrial/
logistics,
leisure, mixed
use
The loan is structured as a senior
and a mezzanine tranche, with
Barclays providing the senior
finance DRC provided EBP 24m it
confirmed.

12. EUROPEAN CRE FINANCE REPORT
1Q15
12
CRE FINANCING INDEX (cont’d)
Date
reported
Asset(s) Lender(s) Borrower(s) CUR
Loan
size (m)
LTV
(%)
Margin
Loan
length
(y)
Country Asset type Notes
02-Feb-15
180 mixed-use UK
assets
Aviva Commercial Real
Estate Finance
Kennedy Wilson
Europe Real Estate
GBP 325.30 70
blended
207bps
3, 5 and 8
year
tranches
UK Mixed use
The senior vendor finance is split
into three-year floating-rate (33%),
five-year fixed-rate (20%) and eight
-year fixed-rate (47%) tranches
03-Feb-15 HSBC St Modwen GBP 100.00 5 UK
Revolving
credit facility
Replaced a GBP 75m facility which
was due to expire January 2016
11-Feb-15
UK-wide mixed use
portfolio
Wells Fargo, Royal Bank of
Canada Capital Markets
Lone Star GBP c.600.00 C.60 high 200bps 5 UK
Office, retail,
hotels,
residential,
other
Lone Star bought a UK portfolio
from two Moorfield funds for GBP
1bn.
12-Feb-15
5,500 Dutch
residential units
Deutsche Hypo, ING Real
Estate Finance, pbb
Deutsche Pfandbriefbank
PATRIZIA Immobilien EUR 331.00 Netherlands Residential
The three banks are each taking a
third of the debt. All-in interest rate
of 20%
12-Feb-15
100 New Oxford
Street, London
BNP Paribas Corporate and
Industrial Banking
Tishman Speyer GBP 90.40 C.70 c.175bps 5 UK Office, retail
The loan term can be increased by
one year. The margin is due to
decrease to sub-150bps once the
majority of the building is leased
18-Feb-15 Five hotels Legal & General Private client GBP 75.00 78 20 UK Hotels
Hotels are located at London’s
Gatwick and Stanstead airports
25-Feb-15 Unsecured
Bank of China Limited,
Barclays Bank Plc, Credit
Agricole Corporate and
Investment Bank,
Handelsbanken, Royal Bank
of Scotland Group Plc,
Santander Global Banking
and Markets, The Bank of
Tokyo-Mitsubishi UFJ Ltd
British Land GBP 485.00 90bps 5 UK
Unsecured revolving credit facility.
The loan can be extended to a
maximum period of seven years
26-Feb-15
Marshes Shopping
Centre
Bank of Ireland
Kennedy Wilson
Europe Real Estate
EUR 264.00 212.5bps Ireland Retail
The loan replaced a EUR 195.8m
Bank of Ireland facility which had
been agreed in June 2014

13. EUROPEAN CRE FINANCE REPORT
1Q15
13
CRE FINANCING INDEX (cont’d)
Date
reported
Asset(s) Lender(s) Borrower(s) CUR
Loan
size (m)
LTV
(%)
Margin
Loan
length
(y)
Country Asset type Notes
26-Feb-15
Project Carlisle loan
purchase
Citi
Cerberus Capital
Management
GBP 500.00 75 c.300bps 3 UK
Loan
portfolio
Loan on loan deal which can be
extended twice by another year
02-Mar-15
Via Santa
Margherita 3
ING Real Estate Finance SMG Real Estate EUR 63.00 c.58 5 Italy Office
LTV based on EUR 108m purchase
price of the building by Qatar
Investment Auhtority in 2Q14 from
Tishman Speyer
02-Mar-15 Outlet mall Deutsche Hypo
TIAA Henderson Real
Estate
EUR 122.00 5 Netherlands Retail
06-Mar-15
Spring Gardens,
Vauxhall
LBBW CLS Holdings GBP 97.00 6 UK Office
The deal refinances an office build-
ing in London’s Vauxhall area
10-Mar-15
Claridge’s,
Connaught,
Berkeley hotels
Bank of America Merrill
Lynch, Blackstone Group,
Royal Bank of Canada,
Starwood Capital Group,
Wells Fargo
Maybourne Hotel
Group
GBP 547.00 5 UK Hotels
The deal extended the debt held
against the three hotels which was
agreed in 2012
11-Mar-15 Seven Italian assets
Bank of America Merrill
Lynch
Cerberus Capital
Management
EUR C. 150.00 c.65 <300bps Italy Office, other
Loan is lined up to finance the
purchase once it completes. The
sub-portfolio Is securitised in the
EUR 1.24bn FIP Funding
16-Mar-15 MediaCityUK
Lloyds Bank Commercial
Banking, Citi Global Markets
Legal & General, The
Peel Group
GBP 277.00 c.55 UK
Mixed Use
(mainly
offices)
The banks are aiming to syndicate
part of the facility in the coming
weeks

14. EUROPEAN CRE FINANCE REPORT
1Q15
14
CRE FINANCING INDEX (cont’d)
Date
reported
Asset(s) Lender(s) Borrower(s) CUR
Loan
size (m)
LTV
(%)
Margin
Loan
length
(y)
Country Asset type Notes
18-Mar-15 Unspecified Aviva Commercial Finance Shaftesbury GBP 130
3.2% fixed
interest
rate
15 UK Unspecified
Shaftesbury has cancelled a GBP
100m RCF with Nationwide.
26-Mar-15
Middlebrook Park,
Bolton
TIAA Henderson Real Estate Orbit Developments GBP 100 20 UK
Retail,
business park
Loan was provided in January.
30-Mar-15 Unspecified
Lloyds, Santander, RBS,
HSBC, Citi, Sabadell, Bank of
China, UBS
Land Securities GBP 1255 75bps 5 UK Unspecified
Secured revolving credit facility.
Stepped margin increases depends
on utilisation amount. Facility
length can be extended for seven
years.

15. EUROPEAN CRE FINANCE REPORT
1Q15
15
Debtwire ABS Research
Ortenca Aliaj, CRE Database Manager
+44 (0)20 7010 6265, ortenca.aliaj@debtwire.com
Arijeet Das, ABS Analyst
+44 (0)20 7010 6287, arijeet.das@debtwire.com
Debtwire ABS Editorial
Bert Erik ten Cate, Associate Editor,
Commercial Real Estate
+44 (0)20 7010 6249, berterik.tencate@debtwire.com
Daniel Cunningham, Senior Reporter,
UK Property Finance
+44 (0)20 7010 5106, daniel.cunningham@debtwire.com
Managing Team
Chris Haffenden, Editor
+44 (0)20 7059 6189, chris.haffenden@debtwire.com
Chris Dammers, Deputy Editor
+44 (0)20 7010 6328, chris.dammers@debtwire.com
Disclaimer: We have obtained the information provided in this report in good faith from sources which we consider to
be reliable, but we do not independently verify the information. The information is not intended to provide tax, legal or
investment advice. We shall not be liable for any mistakes, errors, inaccuracies or omissions in, or incompleteness of, any
information contained in this report. All such liability is excluded to the fullest extent permitted by law. Data has been
derived from investor reports, press releases, presentations and DW intelligence.