North German bank NordLB has teamed up with insurer Ergo to finance the €87 mln acquisition of a residential portfolio by Berlin housing company Gewobag Berlin.

North German bank NordLB has teamed up with insurer Ergo to finance the €87 mln acquisition of a residential portfolio by Berlin housing company Gewobag Berlin.

Ergo will assume €54 mln of the loan for a 20-year period.

The portfolio comprises over 1,000 housing and commercial units in Berlin, which Gewobag will integrate into its total portfolio of 58,000 units.

The refinancing is one of the first of its kind in the German residential property sector involving the participation of an insurance company through entry in a bank’s refinancing register.

‘This enables large real estate portfolios to be structured more easily and efficiently,’ said Eckhard Forst, management board member at NordLB.

The move follows a recent amendment to the German Banking Act giving institutional investors such as insurers and pension funds greater security when taking part in consortial financing deals. The new regime gives non-bank parties ‘insolvency-proof’ access to the relevant assets of the originator/seller of the loan in the event the latter becomes insolvent without requiring legal transfer of ownership to the assets.