According to new research for FPD Savills, 2000 saw just short of £10 billion ($14.3 billion) of property-related securities issued through London. And with over £3 billion ($4.25 billion) issued in the first quarter, 2001 is on target to top last year's record activity.
Trophy property assets like British Land's £1.5 billion ($2.13 billion) Meadowhall shopping mall are ripe for securitisation, and according to FPD Savills' Head of Valuation William Newsom Canary Wharf is on the verge of closing 'Project Tortilla,' a £1.065 billion ($1.53 billion) securitisation of its standing investments which will be fully fungible with its development properties as they reach completion.
But the biggest growth has been in the Commercial Mortgage Backed Securities (CMBS) sector, which allows banks to securitise their loan books thereby spreading their risk and freeing up capital for new lending. Newsom said that the first quarter of 2001 saw as much CMBS issuance as the whole of 2000, which was itself a record year. Speaking at FPD Savills' property lending seminar in London, Newsom claimed that another 12 London-based lenders were currently looking at securitising their loan books.
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