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Deutsche Pfandbriefbank has unveiled a new strategy to reduce its exposure to office lending in favour of sectors like data centres and senior living.
PBB has a loan book of €29B (£24B). Unveiling what it called Strategy 2027, the company said it wants to reduce its office loan proportion from 50% to 40% over the next few years.
As a result, new lending will be focused particularly on data centres, student accommodation and senior living, followed by logistics, hotels and retail. Office and residential will be given a lower weighting, PBB said.
Logistics makes up 19% of its loan portfolio. Residential makes up 17%, retail 10%, and the remaining asset classes account for only 4%.
PBB will also look to reduce its exposure to U.S. real estate lending, where losses in the past year cut into its profitability. It will stop lending on West Coast assets entirely and undertake only minimal lending on the East Coast, Bloomberg reported.
As of 30 June, 45% of PBB’s loan book was in Germany, 13% in France, 12% in the U.S. and 6% in the UK.
PBB is also branching out into fund management. It said it was in the market and talking to investors about raising its inaugural debt fund. It is also looking to raise an equity fund.
PBB will consider acquisitions in the world of fund management and wants to have assets under management of €4B to €6B by the end of 2027. As well as raising debt funds, it will also look to provide services to investors moving into real estate lending, including due diligence and loan servicing.
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