(Bloomberg) -- German landlord Vonovia SE garnered almost £3.3 billion ($4.2 billion) in orders for a bond of £400 million on Europe’s primary market, extending the region’s bumper sales that are topping the most ever for a week.

Debt issuance in Europe has already exceeded the equivalent of €120 billion this week as investors rush to lock in higher yields before central banks start easing policy. Vonovia is selling the bonds as analysts are predicting a rebound for the local real estate sector, which saw volumes for commercial property transactions drop by more than half last year.

Vonovia’s first sterling issue, for 12-year tenor, is pricing at 157 basis points above UK government debt, according to a person familiar with the matter, who asked not to be identified because they’re not authorized to speak about it. The sale was led by BNP Paribas SA, Bank of America Corp., Goldman Sachs Group Inc. and JP Morgan Chase & Co.

The issuance in sterling “broadens our investor base and offers longer tenors,” Fabian Lander, Vonovia’s head of corporate finance, said by email. “Pounds levels are very competitive at the moment compared to euro.”

Market Slump

Germany’s biggest property owners have been hit hard by a market slump that was triggered when rising interest rates ended a decade-long boom. Faced by almost €4.5 billion in loan repayments and bond maturities by the end of 2025, Vonovia last year announced plans to sell €3 billion of properties.

“We see problems among developers but not among portfolio holders,” Lander said. “Portfolio holders benefit from long duration and rent increases and have done their homework in terms of leverage and liability management.”

Vonovia issued €1.5 billion of bonds in November 2022, following sales of €2.5 billion in March after completing a €1 billion Schuldschein earlier. All the deals were oversubscribed.

The real estate and construction sectors, burdened with commercial vacancies and unsold residential properties, have about $650 billion of loans and bonds globally due this year.

--With assistance from Paul Cohen.

(Updates with book size in first paragraph, Vonovia comment in fourth paragraph. A previous version of the story corrected the issuance date of previous bonds in the sixth paragraph.)

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