Eurohypo is the offspring of the merger of the mortgage subsidiaries of three major German banks: Deutsche Bank, Commerzbank and Dresdner Bank (Allianz Group). Despite being a new kid on the block, founded in August 2002, it carries with it the three banks’ long collective experience in funding great real estate projects. Boasting profits of over 230 billion euros, Eurohypo is the fifth biggest private bank in Germany and one of the greatest real estate financiers in Europe, present in 16 countries as well as the US. Since last July, Eurohypo has decided to expand to the Greek market, seeing considerable scope for growth of its activity in a market which, despite being rather limited in size, shows clear indications of maturing. Shopping centers «The market for commercial and professional real estate has several interesting features. For the time being there is a lack of big shopping centers, but we expect that this market will grow significantly,» says Greek branch director Kyriakos Evangelou, presenting the bank’s targets. «The office market also has good prospects for the next few years, since rent levels are now stable following two years of decline. I believe there will be an increasing need for new and larger spaces as big companies seek to house all their sections under one roof or demand more contemporary technology and electromechanic infrastructure. At the same time the decentralization trend, for example to Mesogeia [East Attica], has already begun. There is also high demand for modern warehouses and logistics buildings. We may see more investors entering this market, and not just commercial firms building their own installations.» City hotels Another sector that Eurohypo is interested in is city hotels: «Funding may be for the purchase of a hotel by an investor or for the development or renovation of a hotel. Eurohypo is not involved in touristic hotels because they run more risks; for example, success depends greatly on cooperation with travel agencies or on whether the location of a hotel is «fashionable.» On the contrary, a four- or five-star city hotel at a central spot will always enjoy high occupancy rates and good prices, says Evangelou. Eurohypo’s Greek business director underlines the absence of specialized authorities for real estate project funding. «Due to the peculiarities the real estate growth and use plans have, the smallest amount Eurohypo usually examines is 20 million euros. But, regarding our activities in Greece, we will examine smaller loans too wherever there is a prospect for developing trust relations with our clients. Still, our main interest is in big projects such as shopping centers of 50-100 million euros at least, even though we understand that at the moment there are not many projects of that scale in the Greek market.» Drawing a picture of the bank’s clients, Evangelou distinguishes foreign investors who are or will be active in Greece, large companies and those which own or want to purchase their own buildings to use, such as offices, warehouses and hotels: These may be big commercial or multinational firms. In that case the crucial element is the quality of the real estate and its location; it must be marketable so that it can be rented or sold easily. Three loan categories Finally, Eurohypo offers three types of loans: The first one is for purchase or refunding of real estate for income; during the loan the client only pays the interest and at the end the capital is paid up in «bullet» form. Quite often Eurohypo offers loans to investors for them to refund existing loans in real estate for income. As more and more institutional investors are into real estate for income, demand for this kind of loan is expected to grow considerably in Greece. The second type of loan is funding real estate development and is usually provided in two phases, during building and exploitation, while the third type applies to big commercial firms for purchase or refunding of private real estate.