German lender pbb Deutsche Pfandbriefbank has teamed up with insurance group Ergo to provide €388 mln of debt for the construction of the Schwabinger Tor project in Munich.

German lender pbb Deutsche Pfandbriefbank has teamed up with insurance group Ergo to provide €388 mln of debt for the construction of the Schwabinger Tor project in Munich.

The two partners have provided a 20-year facility to Jost Hurler Beteiligungs- und Verwaltungsgesellschaft GmbH & Co. KG, the company holding the asset.

Schwabinger Tor is one of Germany's largest inner-city construction projects with 90,000 m2 of space.

Ergo has provided €200 mln while pbb has granted the remaining €188 mln while acting as arranger, as well as facility and security agent.

The Schwabinger Tor project will comprise a total of nine buildings with different types of use, on a plot of 3.5 hectares along Munich's Leopoldstrasse thoroughfare. The plot – formerly used by German wholesaler Metro – will house retail, gastronomy and a day-care centre for children, as well as 200 flats, 18,000 m2 of office floor space, and 900 underground car parking spaces.

Moreover, the plot will see the development of a 14-floor, five-star-plus Andaz by Hyatt hotel offering 280 rooms, an integrated congress centre, a wellness area, and a 'sky bar'.

'The transaction highlights the spirit of good cooperation between a specialist real estate financier and an insurance company,' said Bernhard Scholz, member of pbb's management board and responsible for the bank's origination.

Daniel von Borries, management board member of Ergo Insurance Group added: 'Ergo keeps expanding its investments in real estate loans. A dedicated commercial real estate finance team has been in place since last year. Thanks to the long tenor and the special location of the project, the Schwabinger Tor development is a perfect match to the equally long-term liabilities of our Group's life and health insurance companies.'