Listed property giant Gagfah has shelved plans to sell its 37,000-unit residential Woba portfolio as it is close to an agreement to refinance the assets.

Listed property giant Gagfah has shelved plans to sell its 37,000-unit residential Woba portfolio as it is close to an agreement to refinance the assets.

In a statement, the Fortress-owned residential property group said it is discontinuing the sale process as it is just a 'few weeks' away from clinching a €1 bn refinancing of the loan secured against the properties.

'The refinancing is expected to close well in time for the May 15, 2013, maturity of the current loan in place,' the company said.

Gagfah, which purchased the assets together with the loan in 2006, had carried out a structured bidding process for the package and received final bids close to the carrying value of that portfolio. However, CEO Stephen Charlton said refinancing the assets was 'a better alternative in spite of attractive bids for the portfolio'.

'We are happy with this result as it solidifies our position as the largest owner of residential real estate listed in Germany,' he added. 'We are looking forward to further intensifying the close dialogue with a number of parties and to maintaining our significant presence in this attractive city. We believe that Dresden has a great future ahead of it.'

Gagfah has invested more than €180 mln since it acquired the Woba portfolio six years ago and said it plans to spend more than €100 mln over the next five years.

The deal would be the first major debt refinancing this year, and sends a positive sign to Europe's commercial real estate sector, which is faced with a staggering €170 bn wall of debt due to mature in 2013, according to research published by CBRE.

The lion’s share of these loans is backed by prime good-quality assets which should not encounter any refinancing issues, according to Natale Giostra, head of CBRE’s debt advisory team in London. ‘There is plenty of capital which is looking to lend against prime good-quality properties. But banks’ willingness to roll over loans and extend maturities will largely depend on the individual relationship between the borrower and lender,’ he noted.