German debt specialist BF.capital announced on Monday that it has granted the first two financing arrangements within the framework of a €300 mln mandate received from a major German insurance company.
Together, the two whole loans amount to €50 mln and will be used by landlords Pantera and Norsk Deutschland to acquire development plots in Berlin and in the Rhine-Main metro area. The arrangement secures the funding for the time until the development rights have been secured. The loan-to-value (LTV) ratio is about 75% in either case.
The Berlin plot will house buildings for medical facilities and associable infrastructure such as clinic-related accommodation. The Rhine-Main land plot will accommodate residential units supplemented by subsidised housing construction.
Manuel Köppel, managing director of BF.capital, said that the two projects illustrate ‘a typical situation for the use of whole loans: the acquisition of plots whenever the building-law situation is still awaiting further development in order to leverage additional potential’. ‘An important criterion for us is that we must have reason to assume that the sought development rights will indeed be granted—for example, on the evidence of an issued planning consent—so that the definitive prerequisites for the exit and the repayment of the borrowed funds before the end of the financing term are in place,’ he added.
Jan von Graffen, managing director of BF.capital, added: ‘The two examples show how attractive real estate debt investments are for institutional investors. They permit short-maturity property investments with an attractive coupon.’
