International Banks Scale Back Australian Commercial Property Exposure

International Banks Scale Back Australian Commercial Property Exposure

As many as 22 domestic subsidiaries of international banks have signalled their intention to retreat or reduce their exposure to Australian commercial property loans according to a lobby for the property industry.

“The bankers are foreshadowing to the owners that they’re going to quit the market place or scale back,” Property Council of Australia chief executive Peter Verwer said.

Mr. Verwer went on to say that the banks were not explicitly leaving Australia all together, but would instead concentrate their lending activities on other industries, scaling back exposure to the commercial property sector.

Though not all of the 22 banks have a physical presence in Australia, one analyst believes they at least have representatives. Canadian bank Toronto Dominion is reportedly closing its Sydney office. ING Real Estate is also scaling backs its commercial property exposure according to The Australian.

Syndicated debt for commercial property is estimated to be $23 billion, according UBS, of which 71 per cent is provided by the foreign banks.

The biggest lenders are ING Bank, JPMorgan and Citigroup, BNP Paribas and the Royal Bank of Scotland.