Barclays 2008 Annual Report Download - page 115

1
Business review
Barclays PLC Annual Report 2008 113
B. Commercial Mortgages
Commercial mortgages reduced 18% in US Dollar terms. In Sterling terms these increased by 12%.
B1. Commercial Mortgages
Exposures in Barclays Capital’s commercial mortgages portfolio, all of which are measured at fair value, comprised commercial real estate loan exposure
of £11,578m (31st December 2007: £11,103m) and commercial mortgage-backed securities (CMBS) of £735m (31st December 2007: £1,296m).
During the year there were gross losses of £1,148m. Gross sales and paydowns of £1,034m in the UK and Continental Europe and £2,167m in the US
were partially offset by additional drawdowns. Weaker Sterling increased exposure by £3,058m.
The commercial real estate loan exposure comprised 55% US, 41% UK and Europe and 4% Asia. 5% of the total relates to land or property under
construction.
The US exposure included two large transactions which comprised 42% of the total US exposure and have paid down approximately £789m in the year.
The remaining 58% of the US exposure comprised 76 transactions. The remaining weighted average number of years to initial maturity of the US
portfolio is 1.4 years.
The UK and Europe portfolio is well diversified with 64 transactions in place as at 31st December 2008. In Europe protection is provided by loan covenants
and periodic LTV retests, which cover 90% of the portfolio. 47% of the German exposure relates to one transaction secured on multifamily residential
assets. Exposure to the Spanish market represents less than 1% of global exposure at 31st December 2008.
Commercial Real Estate Exposure by Region
As at As at Marks at Marks at
31.12.08 31.12.07 31.12.08 31.12.07
£m £m
US 6,329 5,947 88% 99%
Germany 2,467 1,783 95% 100%
Sweden 265 250 96% 100%
France 270 289 94% 100%
Switzerland 176 127 97% 100%
Spain 106 89 92% 100%
Other Continental Europe 677 779 90% 100%
UK 831 1,422 89% 100%
Asia 457 417 97% 100%
Total 11,578 11,103
Commercial Real Estate Exposure Metrics
WALTV aWAM bWALAc
US 79.5% 1.4 yrs 1.6 yrs
Germany 79.4% 4.6 yrs 1.5 yrs
Other Europe 82.2% 4.5 yrs 1.7 yrs
UK 77.8% 5.8 yrs 1.8 yrs
Asia 93.3% 4.7 yrs 1.3 yrs
Commercial Real Estate Exposure by Industry
As at 31.12.08
Other
US Germany Europe UK Asia Total
£m £m £m £m £m £m
Office 2,081 436 802 192 145 3,656
Residential 1,957 1,268 - 229 128 3,582
Retail 66 567 96 110 118 957
Hotels 1,145 - 441 29 18 1,633
Leisure - - - 233 - 233
Land 232 - - - - 232
Industrial 582 126 131 38 10 887
Mixed/Others 243 70 24 - 38 375
Hedges 23 - - - - 23
Total 6,329 2,467 1,494 831 457 11,578
Notes
aWeighted-average loan-to-value based on the most recent valuation.
bWeighted-average number of years to initial maturity.
cWeighted-average loan age.