Hypo Real Estate, the German property group, has announced it may fail to reach its targets for this year, citing the recent turmoil on financial markets.

'The conditions for the Hypo Real Estate Group have become more difficult since the beginning of 2008,' the company said in a statement. 'It is thus not possible to preclude the possibility that the forecasts for financial 2008 will not be entirely met,'.

In January, Hypo Real Estate forecast pre-tax profit of €1-1.2 billion this year. However, the group were subject to a charge of €300m for US collateralised debt obligations (CDOs) last year and said the 'market situation for this asset class has deteriorated even further so far this year.'

The group, which has a Dublin office, also stated it was unable to rule out the possibility of further charges this year.

CDOs are financial instruments backed in part by high-risk, or sub-prime, US mortgages on which borrowers have defaulted in large numbers.

Source: RTE