Signa Deutschland’s plan to buy Milton Gate in the City of London is under threat after it was unable to secure bank financing.

The German closed-ended fund manager was under offer to buy the 200,000 sq ft scheme from UBS Global Asset Management for around £150m reflecting a yield of around 6.25%.

The deal was agreed but the explosion in the European banking sector this week meant Signa’s agreed financing deal with its funders fell victim to the liquidity crisis.

UBS withdrew the papers from Signa this afternoon but it is thought that Signa is still attempting to secure financing and if it suceeds it can re-enter negotiations with UBS at the same terms.

However, there were a number of interested parties in the building when it was first brought to the market for sale and UBS may seek to begin talks with other parties.

It follows the news earlier today that another German fund manager SEB had pulled out of plans to buy ING Real Estate’s 88 Wood Street scheme.

It agreed to buy the Fosters & Partners-designed development last month from ING for around £180m reflecting a yield of around 6.7%.

Jones Lang LaSalle advises Signa Deutschland and SEB. DTZ and CB Richard Ellis advise UBS. Strutt & Parker advise ING. All parties declined to comment.