AFI: Banks will only lend money to major clients

Banks will keep financing real estate projects of major developers, especially if they had previous lending contracts signed. New investors and those with low financial power, instead, will have difficulties in getting financing for their projects.

"Banks have to survive, although their resources are lower, they will have to choose serious developers. It is true that negotiations will take a bit longer and conditions will be more severe, but I cannot see why banks that already signed contracts for ongoing projects should give up financing," said the CEO of AFI Europe developer, Reuven Havar.

During the "Focus: Real estate market in 2008" seminar organized by Business Standard, Havar said the retail market is not undergoing a crisis currently, but problems could appear on the longer term. "We are strongly involved in the retail market, but we had no negative impact, although rental prices are not low. In the past few months, higher construction costs made us slightly increase rents," he added.

Business Standard