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48 münchener Hypothekenbank eg | annual report 2014management report high level for a longer period of time. Forecasts for 2015 are again predicting turnover of 3 million square metres, and that the vacancy rate is likely to stabilise at last year’s level. Higher demand is expected to be seen for residential property portfolios, especially in major metropolitan areas. In view of unbroken robust investor interest in the German com- mercial property market, we anticipate strong demand for financ- ing for commercial property and residential property portfolios. Competition among financing providers is likely to intensify fur- ther as interest rates remain low. A similar situation is visible in international markets. Moreover, experts also expect that lend- ers will be more willing to act as sole financiers of larger volume transactions, and simultaneously accept lower margins and high- er risks. “The overall conditions in the European property markets are anticipated to remain generally favourable.” London will remain by far the most important market for com- mercial property investments in Great Britain, with investors pri- marily focused on core properties. However, the shortage of ap- propriate properties has already led to notably rising prices in recent years. In the interim prices have reached a level that is causing investors to increasingly expand their horizons to other regions and B locations in London and its surrounding areas. As a result, yields will retreat a bit in London while the pace of price rises will slow notably on a high level. In contrast, higher prices will continue to be seen in secondary locations and regions. On an overall basis it is expected that the gap between yields obtain- able for core and non-core-properties will narrow. The outlook for the commercial property market in France is good despite the weaker economic perspectives. The ongoing low level of interest rates, as well as the lack of investment alternatives, have generated corresponding incentives to invest in property so that the volume of transactions should, at a minimum, reach the previous year’s level. Furthermore, conditions are also favour- able for investors, as Paris, in particular, is a very liquid and stable market which allows longer-term investments. The favourable market environment in the commercial property market in the USA will consolidate in 2015, especially in loca- tions with above-average job growth. These developments are not, however, self-supporting as overall economic conditions – despite good perspectives – and the future development of in- terest rates in the USA are still accompanied by uncertainty. The financing markets for commercial and residential property con- tinue to have high levels of liquidity and fierce competition among providers of finance. A softening of financing stand- ards cannot be ruled out in this environment. Development of business at Münchener Hypothekenbank We again want to continue on our successful course in 2015 and expand our new business in the residential and commer- cial property financing areas. Overall conditions in the markets are in our favour despite increasingly tough competition in our core markets of Germany, Great Britain and France. For this rea- son we plan to sign up at least € 4 billion of new mortgage financing business. We expect to see renewed high demand for property financing, especially in Germany. The Volksbanken and Raiffeisenbanken will continue to be our most important partner for brokered busi- ness. We anticipate that they will be able to further expand their market share thanks to their strong competitive capabilities and solid anchoring in their markets. Planned new business activities with our cooperative partner banks will be primarily driven by providing financing for single-family houses and condominiums and secondly by financing for multi-family houses. We also expect that the share of loans with long fixed-interest rates will rise as many customers want to lock-in low interest rates for the long- term. High demand for residential property financing will continue to have a favourable influence on our collaboration with inde- pendent providers of financial services. We also anticipate post- ing another good volume of new business in this segment. We