Asset management challenge changes as German banks, owners come under pressure

Pressure on banks and property owners to manage assets to add value in the wake of the financial crisis is likely to boost the near-moribund German real estate transactions market, says Christoph Wittkop, CEO and co-founder of asset manager CRE Resolution. Because workouts of assets will become more important for banks that have taken over defaulted or distressed property, CRER, part of the listed Colonia Real Estate, has set up a workout platform. "It's too early to say what kind of business comes out of that but banks are starting to wonder what can they do with the assets," he says. "We don't see so far a big firesale wave in Germany... but probably in six months we will begin to see the first company insolvencies." The main pressure on owners will come, not from loan to value covenants, but cash-flow aspects such ICR and DCR. (Full interview available on podcast, accessed on the PIE/PFE website or on iTunes, using the search words 'Property Finance Europe'