Pension fund BVK lends Frankfurt housing firm €200m
In a further example of how Germany's big pension funds are expanding their loan books, BVK Bayerische Versorgungskammer is lending €200m to the Frankfurt-based residential property company ABG Frankfurt Holding to finance the construction of new apartments.
The deal marks the second major loan that BVK has made to a property company following a similar €150m standalone agreement with the Munich-based municipal Gewofag last year.
ABG Frankfurt is majority-owned by the city of Frankfurt, and is the largest residential property owner in the Rhine-Main region, managing about 51,000 apartments.
BVK, the largest pension fund in Germany with €66bn of assets under management, said it planned further such loans in the future across Germany. Andre Heimrich, the company's head of asset management, said: “We are able to offer not only large-scale financing but also financing over a long time horizon – which gives us a competitive advantage.”
In infrastructure, BVK has made a number of joint loans with Deka Bank to utility Münchner Stadwerke as well as providing €60m of financing for German wind farms.
In June BVK invested in the STAFA retail and hotel tower in Vienna through its mandate with CBRE Global Investors and Frankfurt-based fund manager Universal-Investment. It was the eighth investment that CBRE Global Investors and Universal have made for the pension fund, and its first in Austria.
The ten-storey property is on Vienna's Mariahilfer Strasse, one of the busiest streets in the west of the city leading to the city centre. The building has 12,600 sqm, of which 6,300 is hotel (Ruby Hotels) and a further 6,300 sqm spread across three retail outlets (Terranova, Billa and Betten Reiter). Built originally in 1911, it was completely refurbished in 2015. A subsidiary of property developer Richard Schöps & Co AG paid €30m for the property in 2012, before its refurbishment.
Separately, the Wiesbaden-based Nassauische Heimstätte, which owns 60,000 housing units across 140 towns in the state of Hesse, says it plans to invest at least €1.2bn in construction and refurbishment of its properties by 2021. At least €600m is being invested in 2,400 new apartments in the Rhine-Main region and Kassel, of which 1,600 will be for rent or designated as council housing.
At the company's recent AGM, CEO Thomas Hain said the lack of available building space was his company's primary concern. As a state-owned enterprise (State of Hesse), his company often fails to be the highest bidder for land, he said, particularly given its remit of providing more social housing. Inevitably he is outbid by private project developers building condominiums with much higher yield expectations. Hesse needs at least 37,000 more housing units annually, he said. Higher investment in maintenance of its housing led the company to post profits of €26m for the full year 2015, down from €35m in 2014.