HSH backs Düsseldorf development with €113m loan

HSH Nordbank has provided a loan of around €113 million to German developer Frankonia Eurobau AG to fund a residential scheme in Düsseldorf.

The development – Heimathafen – consists of two 19-storey residential towers in the so-called ‘media harbour’, an area of the city centre alongside the Rhine popular with media companies. In total, the scheme contains 19,907 square metres of space.

HSH Nordbank said that an institutional investor has bought one of the two towers and a loft building. The second tower is financed as a traditional building contract with retail sales ongoing, the bank added.

Frankonia Group has a history of banking with HSH Nordbank. “This transaction, which will give the already very attractive Düsseldorf media harbour a further positive boost, is our fifth joint financing with the Frankonia Group,” said Peter Axmann, head of real estate clients at HSH Nordbank.

HSH, which is subject to a public sale process, is aiming to reduce its non-core debt pile ahead of a sale.

This month, it sold a loan portfolio with a face value of €540 million to Bank of America Merrill Lynch as part of a wider €1.64 billion sale of its non-performing exposure.

The commercial real estate portfolio sits within HSH’s non-core business and relates to legacy loans written before 2009 secured by properties in Scandinavia, the Netherlands and Germany. The sale price for the transaction was not disclosed.

The sale forms part of an EU agreement between the EU, the German federal government and the federal states which own HSH. Under the agreement, the bank is permitted to sell a guarantee-backed legacy loan portfolio totalling €3.2 billion on the market with an accelerated settlement of the loan loss provisions it set aside earlier against the guarantee, dating from the year 2009.