Adelaer uses €5 billion European fintech platform from FinLoop to accelerate digitalization

DEN BOSCH, Netherlands, November 18 – Adelaer, the largest independent commercial real estate financing broker in the Netherlands, has signed an exclusive white-label agreement to use FinLoop's €5,0 billion pan-European fintech platform in the Benelux. The goal is to accelerate the digitalization of Dutch real estate financing and the growth of the alternative financing market.

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In the aftermath of the international financial crisis in the first decade of this century, the volume of bank loans in the Netherlands for commercial real estate fell by 40% between 2011 and 2021, to approximately €60 billion. In 2011, the volume was almost €100 billion. Increasing regulation forced Dutch lenders to reduce their exposure to real estate and focus on the least risky "core" sectors of the market.

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The withdrawal of the banks has created a growing financing gap, preventing projects essential for achieving future construction targets in the Netherlands from being financed. Adelaer estimates this gap at €3 billion per year. These construction targets include the construction of one million homes over the next 10 years to address the massive housing shortage; the transformation of vacant retail spaces into high-street shopping areas due to competition from online stores and the COVID-19 pandemic; and the requirement to reduce CO2 emissions within the entire urban environment in the Netherlands in line with the EU's 2050 Green Deal deadline. The latter will be achieved through investments in carbon-neutral renovations and developments in a sector that represents approximately 2% of Dutch CO35 emissions.

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Daan Reekers, founder and Chief Commercial Officer of Adelaer, says"The commercial real estate sector urgently needs a way to close the growing financing gap created by the gradual withdrawal of traditional banks in the Netherlands. Our cities are facing a crisis of affordable housing, the retail transition, and the reduction of CO2 emissions in the built environment to address climate change. Adelaer has signed an exclusive white-label deal with FinLoop to utilize its pan-European fintech platform in the Benelux. Leveraging this leading technology to further digitize the financing process is the fastest and most efficient way to realize the growth of alternative financing sources through the international capital markets. We believe the Adelaer-FinLoop platform can ultimately become the model for a future digital Dutch real estate bank, which is clearly necessary to ensure the financial stability and growth of the largest economic sector in the Netherlands."

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Reekers spoke this week at the Adelaer Symposium 2021 in Den Bosch, entitled: "Is it time for a new Dutch real estate bank?"

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The volume of commercial real estate loans in Europe originated through the FinLoop platform has grown rapidly during the Covid-19 pandemic. The same is true for other fintech forerunners of German origin, such as the listed domestic mortgage lender Hypoport and the consumer bank N26, which have also continued to develop as businesses and consumers have gained greater confidence in conducting secure online financial transactions. This year alone, FinLoop has seen its loan volume grow from approximately €400 million in the first quarter to €5,0 billion in 2021. Currently, 1.500 bank and alternative lenders are registered on the platform, offering financing for ambitious projects and sectors hardest hit by the pandemic, such as hotels, retail, and offices, particularly in German-speaking markets. The €5,0 billion total is roughly equivalent to the total annual commercial real estate financing volume in the UK by dedicated debt funds and is close to the average annual new loan portfolio of PBB Deutsche Pfandbriefbank, one of the largest German commercial real estate lenders.

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Thomas Schneider, CEO and co-founder of FinLoop, saysSince the beginning of 2021, FinLoop has achieved rapid growth in the total volume of pan-European commercial real estate loans originated through our platform. This is partly due to the financial markets' increasing confidence in the use of proven and secure fintech applications during the Covid-19 pandemic. But it is also a result of the growing awareness among both lenders and borrowers that FinLoop brings together a much broader range of counterparties and that transactions can be processed faster and more efficiently than through traditional banks and other financing channels. To date, no offer submitted by registered users of our platform has failed to close. We expect that our white-label agreement with Adelaer, which handles approximately €1,0 billion in transactions per year, will result in the Dutch market representing a larger share of total lending volume, thanks to broader access to commercial real estate financiers across Europe. We are also working on an ESG filter for financing applications that will allow banks, alternative lenders, and investors to select counterparties based on climate-related and societal impact criteria, in addition to traditional financial risk measures.”

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Sylvester Eijffinger, emeritus professor at Tilburg University, spoke at the Adelaer Symposium: "Increasing regulatory pressure is cutting off project developers and real estate investors' access to financing through traditional banking channels in the Netherlands. Access to international capital markets must be deepened and broadened, as is already the case in the US and the UK. This could be achieved through a Dutch real estate bank, which could issue asset-backed bonds with a high credit rating. This would ensure both the liquidity and stability of the financial system. Unfortunately, such a bank would be heavily regulated under the Basel IV capital weightings, meaning that other entities, such as a 'near bank' or a debt fund, might be more advantageous. Such an institution could therefore offer alternative investments to government bonds with low or negative yields to Dutch pension funds during the transition to a new system of collective defined contribution pension schemes over the next five years. The €1.700 trillion pension sector in the Netherlands represents the largest volume of institutional capital in the EU and the fourth-largest in the world. Dutch pension money could then be used to solve the Dutch housing affordability crisis and to finance the energy transition in the built environment, while our pensioners receive a decent and secure pension income.”

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