Will German banks be real estate’s next casualties?

A private debt hangover in real estate is threatening middle-class retirement savings across Germany. Local banks, which focused more on senior loans, should be safer. But are these lenders ready to finance the recovery in commercial property that the German market so badly needs?

When Austrian real-estate group Signa went bankrupt late last year, some puzzling names appeared among the list of lenders affected, particularly in Germany, the firm’s biggest country of operation. Somehow a pension fund for German thespians and another for orchestral musicians had been lending money to Signa.

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