Allan Saunderson is managing editor of Property Finance Europe and a contributor to

DUSSELDORF, GERMANY-Private real estate trading group WGF has been approached with a large number of property assets over the last few months which present very strong investment opportunities, says incoming board member Raffaele Lino.

Lino, who joined the WGF board at the start of this month from DTZ Germany, told PFE that the economic crisis is placing increasing pressure on sellers, who previously had been reluctant to dispose of investment real estate. “We have been approached with probably over €300 million in assets from sellers who are prepared to take some pretty attractive prices,” Lino said. “Many of them simply want to exit at almost any cost.”

WGF recently announced redemption of its first mortgage bond in full at maturity and on schedule, a €20 million issue made in July 2004 and carrying a 6.35% coupon. Five years ago, the issue was Germany’s first private placement securitised mortgage loan outside the Pfandbrief covered bond system. WGF has subsequently issued three similar bonds with varying volumes, and the group now has an outstanding volume totalling €130 million, making WGF the German market leader in the asset class of independent mortgage bonds. WGF Executive Chairman Pino Sergio commented: “We are proud to have justified our investors’ trust in us. Throughout the bond term we have paid 6.35% annual interest on appointed payment dates, and in 2006 actually granted an exceptional bonus of 0.5%.”

Founded in 2003, WGF (Westfälische Grundbesitz und Finanzverwaltung AG) chose bond issuance for its principle funding to match its real estate trading business model and to provide an attractive security to investors ranging from private client savers to investment institutions and asset managers. It also allows WGF independence from bank credit. As an indirect exposure to real estate with first-priority charge, WGF mortgage bonds’ transparency is ensured via close compliance with the Dsseldorf Stock Exchange.

As a result, a growing group of direct banks, financial service providers and asset management have added the bonds to the range of products offered to clients – including Comdirect, Cortal Consors, DAB bank, S Broker and wallstreet:online capital. WGF nearly doubled balance sheet turnover last year to €120 million, reporting EBIT operating profit also doubling to €5.3 million. Its bond ratings were recently raised to BBB from BB by the Berlin-based agency Creditreform. The bonds are also rated as trustee securities under the terms of the German Federal Civil Code.

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