Real estate developers can now make use of an interesting new source of financing. IKB Deutsche Industriebank AG, IVG Immobilien AG and Bankhaus Sal. Oppenheim have created a fund for the equity-like financing and active accompaniment of real estate projects in Germany in the form of joint ventures with developers.
The fund focuses first and foremost on office buildings and commercial properties, as well as on facilities for other uses with a corresponding investment quality. The fund, whose initial volume is €100 million, is open to other institutional investors.
For project developers, it is above all the high equity quality that makes the new financing form so advantageous. For invest projects with an individual volume of between €20 million and €50 million, a customized blend of mezzanine capital and equity is furnished. The inclusion of equity elements in the financing package not least against the background of Basle II, the altered risk policy of banks and the accompanying equity gaps is absolutely crucial for enabling project developers to invest counter-cyclically today in a rebounding market phase.
The financiers will seek a speedy implementation of the individual development projects so that at least ten projects can be handled during the eight-year lifetime of the fund. As a structured equity fund, it is specially tailored to the needs of institutional investors, whose return is guaranteed by the ongoing payment of interest on the mezzanine component. A quarter of the fund capital is being provided by IKB, IVG and Sal. Oppenheim, who will also manage the fund. The remainder of the fund volume is to be successively supplied by institutional investors.