The lending value (Beleihungswert) is how German banks issuing covered bonds (Pfandbriefe) value property for a loan: what it would fetch, on a cautious estimate, at any time during the loan, ignoring market swings and speculation. For a supermarket it is well below the purchase price — no more than two-thirds in our example — and a loan can count towards the bonds' cover only up to the first 60% of that value.
What it is
The lending value may not exceed the value that a cautious assessment of the property's future marketability yields. That assessment considers the property's lasting long-term features, normal regional market conditions and its current and possible alternative uses. Speculative elements are disregarded, and the lending value may not exceed market value (§ 16(2) PfandBG). An expert who has no part in the lending decision carries out the valuation (§ 16(1) PfandBG) under the Lending Value Ordinance (BelWertV). As a rule the income value is decisive (§ 4(1) BelWertV), and the supervisor sets minimum parameters for it.
Exhibit 1. The market prices the store at €9.25 million; the bank's lending value is at most €6.1 million
Sources: BNP Paribas Real Estate (see also Part 12 of the series German Prime Retail); § 11(2), § 12(4) and Annexes 2 and 3 BelWertV; BaFin.
Why it matters to investors
The gap between price and lending value is equity the buyer will need beyond what it expected. In our example the lending value is no more than two-thirds of the price. The 60% of it that the bank can put into the cover for its covered bonds (§ 14 PfandBG) is at most €3.64 million — less than 40% of the price. The bank must refinance the rest of the loan by other means.
The minimum capitalisation rate is tied to the yield on 30-year government bonds but capped: for commercial use it has stood at the cap of 6.5% since 1 January 2024 (§ 12(4) BelWertV; BaFin). For a prime property that meets eight criteria, among them a very good location in a conurbation and especially high marketability, the rate can be lowered by no more than 0.5 percentage points (§ 12(5) BelWertV).
The building's condition also lowers the value: the cost of remedying defects and of deferred repairs is deducted separately (§ 4(3) BelWertV). For self-service and specialist stores, the remaining useful life may not exceed 30 years (Annex 2 BelWertV). A technical survey before purchase therefore also affects the size of the loan.
What to check
• The bank's valuation: lending value, capitalisation rate, cost deductions and the building's assumed remaining useful life.
• The loan as a percentage of the lending value, not only of the price.
• Unremedied defects and deferred repairs that the valuer will deduct.
• For a property under construction, how the bank values it as work progresses (§ 4(4) BelWertV).
Sources: PfandBG §§ 14, 16; BelWertV §§ 3, 4, 11, 12 and Annexes 1–3 (2022 version); BaFin, minimum capitalisation rates under § 12(4) BelWertV (from 1 January 2024); BNP Paribas Real Estate, German food-retail investment market report for Q4 2025 and retail investment market report for Q3 2026; Gordon Real Estate Group, "German Prime Retail", Part 12, and our own calculation. Legal position and data as of 10 October 2026.
Photo: Peter Herrmann / Unsplash
This entry is general information and not legal or tax advice.