"OIMIO is optimistic about the growth opportunities next year. Even in uncertain times, a bank can finance commercial real estate", says founder Jeroen Belt. "We did not enter the market to fill a temporary gap in the financing market. There is a permanent demand for loans between one and ten million euros."
OIMIO, part of NIBC Bank, has been offering loans for smaller commercial properties for amounts between one and ten million euros since the beginning of 2020. The bank uses technology to serve customers in a smart and efficient way. This enables OIMIO to make additional investments in client relationships. This approach enables it to provide customers with swift clarity on their financing requests. OIMIO's team currently consists of five people.
To make these relatively small loans cost-effective, OIMIO focuses on 'a no-nonsense approach'.
NIBC has been active for decades in the market for loans above ten million euros, but for customers with a demand of several million euros there was no serious financing platform in our country, says OIMIO-founder Jeroen Belt. "Such customers were standing in front of a closed door despite their real estate ambitions. Not only with us, but also with the traditional big banks. That is why we decided at the beginning of 2020 to enter the market of smaller real estate loans for offices, business premises, shops, parking garages and parts of the healthcare market. We also do construction financing."
Throughout the Netherlands
The bank has no preferred regions; financing is provided throughout the Netherlands. OIMIO does apply strict volume limits. Customers cannot approach OMIO for very small amounts or, on the contrary, larger property loans. The new platform appears to be successful. Since the beginning of this year, several tens of millions of loans have been realised. "We have met the financing needs of very different parties. Think of loans to private equity players for the purchase of relatively smaller properties, the renovation of a shopping center by a Dutch developer, a parking fund of private investors or a retired farmer who wants to expand his real estate portfolio. On average, a loan amounts to five to six million euros," says relationship manager Yusuf Savas.
To make these relatively small loans cost-effective, OIMIO focuses on 'a no-nonsense approach'. "We offer speed and certainty," says Savas. "The relationship managers maintain very direct contact with the parties seeking financing. People do not have to wait two or three weeks for an appointment with us; our relationship managers are immediately available to review the feasibility of a loan with the potential customer." This working method is possible, adds Belt, because OIMIO has largely digitized the assessment and processing of an application. "We work closely with a number of fintech partners. OakNorth, for example, helps us make analyses of the value of the property and the creditworthiness of the customer based on large databases. This provides the relationship manger with more time to talk to the customers about propositions. And no less important: we can give the customer a definitive answer on the feasibility of the financing application within a few days. Even after that, the process is set up in such a way that a loan is notarized within a few weeks. It doesn't take months to finish a transaction with us."
Speeding up the process
Belt expects to be able to make the processes even faster and more efficient in the future. "We recently started a pilot with a partner who will take over eighty percent of the know-your-customer (KYC) due diligence work.". And that acceleration process is far from over, he says. "The world is changing rapidly. Banks have to keep up with that speed; people are asking for it. I personally expect the financial world in particular to undergo a huge digitalization process. We will see the rise of all kinds of new players in the field of payments. IT giants are offering all kinds of new services. This change will also affect the world of real estate financing. Fintech companies are also extremely creative in using new technology to gather the information they need and to answer their customers' requests.
Will humans eventually disappear in such a process? "No asset is alike. So we will always have to do micro-analyses. We also inspect every building ourselves from the inside. And we also meet with each customer face to face, but there is still a lot of profit to be made at the back end of that process. I am convinced of that," says Belt.
He is optimistic about the market opportunities next year. "There is a lot of room within NIBC to grow our loan book. We also have that ambition, but the economic situation has uncertainties. The Covid outbreak is accelerating certain trends. Retailers are struggling and shopping areas are becoming more concentrated. This is also how we look at the market. The ends of shopping streets will more often be transformed into residential areas. Working from home is embraced. This does not make offices superfluous, but users will start thinking more about their housing requirements. Some office buildings will fall into disuse and need to be given a different function. Our clients are busy with such transformations. As a financier, we may look at things more critically, but if we do our analyses well, the bank can finance real estate very well in uncertain times. We want to play that role. We didn't start OIMIO to fill a temporary gap in the financing market, but believe there is room for a new player in a market that is here to stay."