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ePaper created 2013-04-15, 17:20:51 | version 1.25.7
Management report – münchener Hypothekenbank eg l annual Report 201218 French property market was even more strongly dominated by the Paris region than in previous years as sales in other regions fell by about 35 percent. The difficult development noted in recent years in the Dutch market continued in 2012 as the volume of transactions fell by more than 10 percent. The gap between prices paid for core properties and B-location properties continued to widen. Due to stronger supply than demand – especially in the office prop- erty sector – vacancy rates were high and stood at over 20 per- cent in areas surrounding major urban areas. Despite the unchanged uncertain development of the economy in the USA, favourable tendencies continued to be observed in most of the individual commercial property markets. Demand for core properties exceeded demand primarily in the core mar- kets of New York City, San Francisco, Washington DC, Boston, Seattle, Houston and Los Angeles, which led to a further reduc- tion in property yields. Due to the surplus of demand for core properties in key markets some investors turned their attention again to riskier and higher yielding properties in secondary mar- kets, as well as properties on the peripheries of primary markets. The financing market in the USA proved to be more liquid and stable than in previous years. This situation renewed stronger competition among financing providers, which primarily made loans to very creditworthy borrowers for long-tern rented prop- erties located in the previously mentioned core markets. Financ- ing providers also extended their lending spectrum to include selected transactions involving currently undervalued properties associated with slightly greater risk, as well as properties located in secondary markets. Furthermore, subordinated loans with higher lending value ratios were again more widely available for selected property transactions. The market for Commercial Mort- gage Backed Securities (CMBS) also showed signs of recovery.