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Commercial real estate financing includes acquisition, construction and investment loans. These loans are usually repaid on a long-term basis from rental income from retail and logistics projects, office space, or from the sale of apartments in residential projects.

Commercial real estate financing is structured financing, where the loan recipient is usually a special purpose vehicle that does not perform any other activities.

Who is the product intended for?

The bank provides commercial real estate financing especially for:

  • Developers
  • Real estate investors
  • Corporate clients
  • Construction companies
  • Commercial clients

What projects can the financing be used for?

Typical examples include:

  • High quality office buildings – for the purpose of long-term lease if they meet the terms and conditions of a key creditworthy tenant
  • Residential buildings – for the purpose of selling apartments for personal ownership
  • Industrial parks and logistics centres – for tenants with a strong economic background with good accessibility and infrastructure
  • Commercial space and multifunctional buildings – for stable tenants with a strong economic background

The main principles of real estate financing

  • Ratio of loan amount to total costs max. 70%, Equity min. 30% – preferably used before the first drawing of the loan (the bank prefers projects with equity of min. 35%)
  • Ratio of loan amount to the value of real estate max. 70%, Equity min. 30%
  • Contracts on future leases – minimum interest coverage requirement of 110% from the first year of the loan payment
  • Necessary contracting before the first drawing of the construction loan min. 30 – 40% of the total area of apartments for sale or for lease
  • Duration of the construction loan: max. 2 years in the case of residential buildings and max. 3 years in the case of commercial buildings, but not longer than during the construction phase
  • Duration of the investment loan: max. 5 years, in exceptional cases up to 7 years depending on the quality of the building, the terms of the lease contract, market conditions, tenants and the debt service coverage ratio (DSC). Early loan repayment is possible.

What documents need to be attached to the loan application for real estate financing?

We usually request the following documents and information from our clients:

  • Business history
  • Developed project and business plan with cash flow projections during the entire loan maturity period
  • Financial calculation
  • Reliable information on the financial standing
  • Relevant contracts
  • Extract from the real estate cadastre
  • Extract from the companies register

Other documents depending on specific projects.

Who to contact?

Our specialists in the field of real estate financing will be happy to advise you and discuss with you the possibilities and conditions for implementing the financing of your project.

We will provide more detailed information at the offices of VÚB, a.s., or at