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A lack of project financing from large banks in Germany could drive a ‘comeback’ of the CMBS market, attendees at PropertyEU's latest briefing on the market heard.

The sharp fall in the overall credit supply has driven developers and fund managers towards alternative lenders including life insurance companies and smaller banks.

Speaking at the Germany Investment Briefing, hosted by London law firm Squire Sanders, a panel of investment experts said that small banks were playing an increasingly important role on a local level for developers.

Marcus Cieleback, head of research at Patrizia Immobilien, said: 'We can't go to the big commercial banks. The small banks are doing small lending in markets they know well. Sometimes it’s the small banks you have to go to for financing, but you have to have close connections with them.'

However, Squire Sanders partner Kai Mertens said that while in the short term the large banks were still reticent to lend on any kind of scale, there were positive signs from the market both in the present climate and in terms of future prospects.

He said: ‘Even banks need to grow. Across the board financing in Germany is relatively healthy. It’s quite aggressive and competitive but there is money for deals.’

Cieleback also said that there were signs of a possible return to a greater presence of commercial mortgage-backed securities (CMBS) in Germany as a means of attracting investment from outside.

He said: ‘There is talk that the CMBS market might return. Generally international investors are more familiar withCMBS than in Germany, and they are more likely to use it as a financing tool.

‘You have to be honest and say that we need a comeback to get all the financing and refinancing needs executed in the coming years, because on a general bank financing side you won’t be able to refinance everything.'

See the links below for additional news stories and the full report from the event

PropertyEU @MIPIM 2013
PropertyEU in partnership with IPD is holding two special investment briefings at MIPIM 2013 on European logistics and Central and Eastern Europe. to secure your place.