BVK backs €600m financing for Europe's largest inner-city mall

German pensions group BVK has thrown its financial weight behind a consortium that is providing €600 mln in debt financing for the Mall of Berlin on Leipziger Platz, the largest inner-city shopping centre project in Europe.

Bayerische Versorgungskammer (BVK) - which managed €59 bn of pension assets on behalf of 1.9 million people in Germany at end-2013 - is contributing €450 mln to one of the largest debt financing transactions ever completed in the German real estate sector.

BVK's contribution is also one of the largest non-bank property financings in Germany.

Deutsche Hypo is providing €80 mln. The German bank is the lead manager and agent of the 10-year lending facility. Two funds managed by BNP Paribas REIM Germany are lending the final €70 mln.

The sponsor of the loans is the Mall of Berlin joint venture between High Gain House Investments and Arab Investments.

The Mall of Berlin is located in the Berlin-Mitte district, between the Reichstag, Friedrichstrasse and Potsdamer Platz. The shopping centre will feature 270 retail and catering businesses over 76,000 m2, with an additional 30,000 m2 for apartments, 12,000 m2 of hotel space, 4,000 m2 for offices and 1,000 m2 for parking.

The complex is expected to open on 25 September this year. It has been developed on the site of the Wertheim, which was the largest department store in Europe until it was destroyed in World War II.

The financing transaction was negotiated by Berlin-based privately owned, independent equity investment firm Primor Capital Partners. The lenders were advised on legal matters by law firm Noerr with law firm Görg acting for the borrowers.

London-based Arab Investments is the family office of the Affara family. It was established by Yemeni businessman Mohammed Affara in the 1980s and is now run by his son, Khalid Mohammed Affara. The company invests in hotels, office towers and other business sectors. It is the owner of the Coffee Republic chain in the UK.

Arab Investments had been active in German real estate since 2006. Aside from the Leipziger Platz shopping centre project, Arab Investments has acquired €1.6 bn of German property in recent years. Primor represents Arab Investments in Germany.

High Gain House Investments is controlled by the Berlin-based Huth family, which specialises in the development of shopping centres in Germany.