pbb Deutsche Pfandbriefbank and Dusseldorf-based ERGO Versicherungsgruppe have joined up to finance a city quarter development project in Munich: the ‘Neue Balan’ project with a total rentable area of some 100,000m². The two partners have provided a 20-year facility totalling approximately €160m – in equal proportions – to Allgemeine SÜDBODEN Grundbesitz AG, financing the development of the project along with existing properties. As lead manager for the facility, pbb structured the financing and will also act as facility agent and security agent. The loan agreements were signed at the end of December 2015.
Allgemeine SÜDBODEN Grundbesitz AG acquired the former Infineon site in Munich-Haidhausen/Ramersdorf in 2006. Development work to convert the site into an office and commercial estate started in 2007, with new buildings having been added to supplement existing ones. Further development is being planned on the site – including two new office properties, construction of which started at the end of 2015.
Today, ‘Neue Balan’ is home to a variety of companies from the following sectors: IT, exchanges, advertising, clothing, media, communications, gastronomy, design, architecture, construction, and software. Allgemeine SÜDBODEN Grundbesitz Verwaltung GmbH is responsible for letting. Recently, the project was given an award in the category ‘Building Healthy Places’ by the Urban Land institute Germany.
This deal marks yet another successful joint transaction for pbb and ERGO. In March 2014, the two partners provided a 20-year facility totalling approximately €388m to Jost Hurler Beteiligungs und Verwaltungs GmbH & Co. KG, also financing project development as well as existing properties. The developer used the funds to finance one of the largest inner-city construction projects at present in Germany: the ‘Schwabinger Tor’ project in Munich, with a total usable area of some 90,000m².
Gerhard Meitinger, head of real estate finance Germany at pbb Deutsche Pfandbriefbank, said: "'Neue Balan' is quite a special city quarter development project, which will create an unusual 'office campus' for Munich, in an attractive location. This transaction has also further deepened cooperation between ERGO Insurance Group and pbb."
Dr Eckehard Schulz, head of real estate finance at ERGO, added: "We were convinced by the location as well as the quality of the properties. We were delighted to once again work with pbb, in a project that combines the skills and expertise of both partners."
