GERMANY - The €50bn German Bayerische Versorgungskammer (BVK) has provided outside financing for a property deal between an institutional fund by German real estate company IVG and Commerzbank.

The 166-metre high Silberturm in Frankfurt/Main, the former headquarters of Dresdner Bank, will have been modernised - with Silver certification from the German Sustainable Building Council expected in 2012 - when new tenant Deutsche Bahn moves in, according to IVG.

IVG said roughly €200m had been collected in the fund for the investment, which is 90% of the fund equity. The real estate company itself will provide the remaining 10%.

BVK said it planned to provide another €190m in outside financing over a period of 10 years for the deal.

The Versorgungswerk confirmed in a statement that this was the first time it had chosen lending for a property deal as a form of investment.

Daniel Just, deputy chairman and head of asset management at the BVK, said: "On the one hand, this is a secure and stable investment, and on the other hand, a further diversification of our portfolio."

He confirmed that the fund might be financing further core business and office properties, "starting at an investment volume of €150m in the large investment cities in Germany".

Just said BVK focused on long-term tenants with high reputation, modern or well-maintained buildings with the newest technology and compliance with environmental standards to ensure "safety, profitability and stability in the investment".