LBBW backs BVK’s high-street exposure with €343m loan

The 10-year debt facility, with a fixed interest rate, will be used to finance the seed portfolio of a vehicle managed by Corestate on behalf of the German pension fund.

Stuttgart-based bank LBBW has written a €343 million loan to back the retail exposure of German pension fund Bayerische Versorgungskammer in its local market.

The facility, provided to Frankfurt-based property fund manager Corestate, will be used to finance the seed portfolio of a fund managed on behalf of BVK. The loan has a fixed interest rate and a maturity of 10 years.

“We did not only manage to achieve an attractive interest rate in the current volatile credit market environment, but additionally took the interest rate risk out of the equation for the BVK portfolio,” said Lars Schnidrig, chief financial officer of Corestate.

Since mid-2017, Corestate has held the asset-management mandate for the €687 million portfolio, which was launched on the platform of Frankfurt-based investment manager Universal-Investment. The portfolio encompasses 90 assets across Germany, which Corestate acquired and held in several portfolios in its club deal programme.

Overall, Corestate manages a portfolio of 200 high-street assets with a total investment volume of over €2 billion in German mid-sized cities.

Last July, BVK, Germany’s largest public pension fund with €69 billion of assets under management, awarded a €250 million separate account mandate to invest in the retail sector to Universal-Investment and GPEP, the Frankfurt-based asset manager, Real Estate Capital’s sister title, PERE, reported at the time.

The separate account, BVK-Deutschland I-Immobilienfonds, is expected to be used to invest in supermarkets and retail centres throughout Germany, across the full range of risk strategies.

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