Dr. Bernhard Scholz, pbb Deutsche Pfandbriefbank

Dr. Bernhard Scholz is a Member of the Management Board at pbb Deutsche Pfandbriefbank and his responsibilities include Real Estate Finance and Public Investment Finance. pbb Deutsche Pfandbriefbank is a leading European specialist bank for real estate and public in-vestment finance. The company is part of the HRE Group which has been 100% owned by the German government since October 2009. In an exclusive interview with Europe Real Estate, Dr. Bernhard Scholz explained pbb Deutsche Pfandbriefbank’s current activities and future plans.

Tell us a little bit about yourself.

For most of my professional life I have been focused on real estate finance. I started my professional career in 1985 as a consultant and then joined the Munich-based Bayerische Hypotheken-und Wechselbank AG in 1990. In 2001 I assumed responsibility for the HVB´s real estate investment business in Northern and Eastern Germany and subsequently served as Head of Restructuring and Workout at Hypo Real Estate (a predecessor institution of pbb Deutsche Pfandbriefbank) when it was spun off from HVB in 2002.

In 2004 I became a member of the management board at Münchener Hypothekenbank eG before joining pbb Deutsche Pfandbriefbank in 2010, where I assumed responsibility for Origination in Real Estate Finance and Public Investment Finance.

What are your company’s background and current activities?

pbb Deutsche Pfandbriefbank is first and foremost a specialist real estate lender. Our second business line is public investment finance where we finance public sector infrastructure.

Real estate finance is in terms of volume by far the most important business line for pbb. We lend to professional real estate investors and Germany, the UK and France are our biggest markets. However, our approach is pan-European. We focus on medium to large-scale financing arrangements predominantly for offices, retail, residential and logistics.

How has your business changed along with the changes in the real estate markets?

Since the beginning of the international financial crisis, the market for real estate financing has changed considerably. We have concentrated on key client groups, selected financing structures and redefined our geographical focus, as did many market players. Interestingly new players have also entered the market for real estate financing which offers opportunities for new alliances for banks like us. The planned new banking regulation is also expected to change the business environment and create new challenges.

What are your plans for growth and where will your growth be directed in the coming years? Are you planning to expand into other markets?

We have completed our regional set up with new offices in Stockholm to serve the Scandinavian market and we have expanded our coverage in Germany, our home market. We will now seek to leverage our local presence and pbb will also grow organically with tactical hires for key roles. Our goal is to boost our market penetration and optimize our presence.

What differentiates you from your competitors?

pbb Deutsche Pfandbriefbank is one of the few real estate financing specialists combining local expertise with a pan-European reach.

In your opinion, what is the outlook for the European real estate market over the next 12 months?

Despite the downturn in the economic climate and the uncertainty regarding the sovereign debt crisis which is still not behind us, real estate as an asset class will continue to be one of the main investment categories in 2013. In particular, demand in the preferred core markets of Germany, France, UK and Scandinavia will probably continue to be relatively robust.

The top six locations in Germany (Berlin, Frankfurt, Hamburg, Cologne, Munich and Stuttgart) and Paris, London and Stockholm will continue to be the most attractive destinations for European in-vestors. In Eastern Europe Poland continues to perform strongly. We see that the office and retail sectors continue to dominate investor interest.

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