Pbb Deutsche Pfandbriefbank has provided German residential propety owner GSW Immobilien with a long-term loan of EUR 200 mln, as part of a refinancing for a securitized credit which GSW has now replaced with a number of individual loan agreements.

The loan will finance a portfolio of 118 buildings - or 7,100 apartments - in Berlin, which can all be classified as affordable housing.

Such properties are becoming increasingly popular with banks looking to generate stable cash flow, especially in light of the new Basel III banking regulations, which stipulate that banks will have to hold more capital on their books, which makes property lending less profitable.

'Multifamily assets like these (GSW's) are regarded as very stable with a good cash flow, so they’re very desirable in lending terms. Banks are looking for a safe place to put their money and multifamily housing - as long as it's decent - fits this criteria,' Dirk Richolt, head of debt advisory services at CBRE in Germany, told PropertyEU.

However, it is not easy finding debt for most of the real estate market, Richolt warns. 'Banks are still very cautious about new lending. Multifamily housing accounts for EUR15bn of CMBS loans in Germany, .compared with EUR 25 bn in commercial CMBS loans,' he added.

And for banks, such loans are typically a no-brainer, according to Martin Braun, a partner at Cushman & Wakefield in Frankfurt. 'Obviously, they offer a granular cash-flow, so there’s a limited downside. Banks are keen to invest in residential assets - if the price is right,' he said.

GSW Immobilien postponed its planned IPO last May citing ‘significantly increased volatility and uncertainty in global equity markets’. It has not yet disclosed whether it will attempt another IPO this year or sell off existing assets. Many industry insiders believe that an IPO makes more sense, if there is investor interest. According to Braun of Cushman & Wakefield, for many large real estate companies, an IPO is ‘the only realistic exit’.