Phoenix Spree Deutschland Share Discussion Threads

[davebowler] 13/11/2019 14:15

Good news for Berlin-

[davebowler] 13/11/2019 09:25

12 November 2019

Phoenix Spree Deutschland Limited

(The "Company" or "PSDL")

Transaction in own shares

The Company announces that pursuant to the general authority granted by shareholders of the Company on 21 June 2019 to make market purchases of its own ordinary shares, it repurchased 225,000 ordinary shares at a price of 320.25 pence per share, to be held in treasury, on 11 November 2019.

[davebowler] 13/11/2019 09:23

Liberum;
Phoenix Spree Deutschland

Deutsche Wohnen provides guidance on impact of rent legislation

Mkt Cap £324m | Prem/(disc) -21.0% | Div yield 2.1%

Event

Deutsche Wohnen, a listed German residential company with a €23bn portfolio (75% in Berlin), has provided an update on the impact it expects from the draft bill agreed by the Berlin Senate for rent regulations.

The bill is still subject to the legislative process but is expected to become effective in Q1 2020. Deutsche Wohnen, like many other participants, regards the proposals as unconstitutional.

The main points of the draft bill include:

Rents are fixed at the level of June 18 2019 for five years and rent caps ranging from €3.92 - €9.80 per sqm have been defined according to construction year, with the maximum assigned to buildings constructed or fully refurbished between 2003 and 2013. The rent ceiling does not apply to the limited amount of property constructed from 2014 onwards.
If an existing rent is more than 20% above the rent cap, tenants can apply for a rent reduction.
Annual inflation adjustments of 1.3% are allowed from 2022 (subject to the rent cap)
Modernisation increases of up to €1 per sqm are allowed.
New lettings are to be at the lower of the rent cap or the level paid by the previous tenant.
Deutsche Wohnen estimates a total cash flow risk of €330m on a five year basis. This includes €190m of unrealised rental growth and a rent reduction risk of €140m. This could be claimed back from tenants if the proposed law is found to be unconstitutional.

Liberum view

Deutsche Wohnen has highlighted that it has put all new investment in Berlin under review. New construction has been put on hold and it will focus on capex projects in other cities. This is an inevitable consequence of the draft bill and will result in a widening imbalance between supply and demand. The impact of the rent reduction for Deutsche Wohnen is estimated at €25m from existing tenants, assuming all eligible tenants apply for the reduction. This is equivalent to c.4% of the current rent roll on the Berlin portfolio. The average rent across Phoenix Spree's portfolio is €8.7 per sqm compared to €6.9 per sqm for Deutsche Wohnen. Phoenix Spree's new lettings have typically been well ahead of this (e.g. €12.2 per sqm in H1 2019).

Phoenix Spree has already stated that the company has increased its focus on short-term furnished lettings until there is greater clarity on the rules and their likely impact (expected by mid-2020). Phoenix Spree has also reported strong early progress with its condominium sales programme and we would expect this to accelerate. The company has a cooperation agreement with Accentro Real Estate that covers the entire portfolio of condominium projects owned by Phoenix Spree. The company can offer any property for sale on Accentro's platform at an agreed minimum price. Any units not sold after an 18-24 month exclusivity period will have to be bought by Accentro at the minimum price. 55% of the portfolio is registered as condominiums with a further 35% in the planning stage.

[davebowler] 28/10/2019 09:27

28 October 2019

Phoenix Spree Deutschland Limited

(The "Company" or "PSDL")

Transaction in own shares

The Company announces that pursuant to the general authority granted by shareholders of the Company on 21 June 2019 to make market purchases of its own ordinary shares, it repurchased 140,000 ordinary shares at a price of 319.75 pence per share, to be held in treasury, on 25 October 2019.

[davebowler] 22/10/2019 16:31

hTTps://www.bloomberg.com/opinion/articles/2019-10-22/berlin-rent-freeze-puts-politics-over-economics

[cerrito] 22/10/2019 08:02

I see that they are not wasting time with their buy back programme

[cerrito] 20/10/2019 15:37

Thanks as always davebowler for posting this and congrats to those who bought under 290

[davebowler] 18/10/2019 15:43

Precisely.

[hpcg] 18/10/2019 11:55

Bought in today. The discount isn't just to book value, but even more so to realisable book value.

[alpal2] 18/10/2019 10:34

Continuation: Should all shareholders vote against the continuation? It seems the orderly liquidation of the portfolio would bring massive benefit to shareholders. Liquidation value 500p per share?

[davebowler] 18/10/2019 09:13

Liberum;
Phoenix Spree Deutschland has notarised the sale of 10 condominiums for a total value of €3.8m, representing a 21.6% premium to the book value at 30 June 2019. The level of sales has increased notably from H1 2019 (four units notarised for €2.5m in H1). The company also reports a positive start to Accentro's marketing of the remaining units at Boxhagener Strasse.

Phoenix Spree has a cooperation agreement with Accentro that covers the entire portfolio of condominium projects. The company can offer any property for sale on Accentro's platform at an agreed minimum price. Any units not sold after an 18-24 month exclusivity period will have to be bought by Accentro at the minimum price.

The company will also begin buying back shares today. Up to 10% of the shares in issue will be acquired and held in treasury.

Liberum view

Phoenix Spree indicated in the recent interim results that the focus on condominium sales will increase. 55% of the portfolio is registered as condominiums with a further 35% in the planning stage. The average price achieved in H2 2019 to date of €4,865 per sqm compares to a portfolio value per sqm of €3,716 at June 2019.The current market cap of the company implies a value per sqm of the portfolio of €3,153 per sqm (35% below the level sale price achieved in H2 2019). We believe Phoenix Spree is well-positioned in comparison to many other landlords due to the flexibility to adjust its business model.

The draft bill on the proposed rent ceiling is currently being discussed by the Berlin Senate. Press reports indicate there is some disagreement between the coalition on some of the terms and the final bill may not be as restrictive as initially thought. Tagesspiegel has reported that the coalition has removed plans to enable tenants to apply to have their rent reduced if they can demonstrate that rents are more than 30% of their disposable household income.

[alpal2] 18/10/2019 09:00

DB: Thanks for your postings!

[davebowler] 18/10/2019 08:38

I'll find out more about what is involved in 'short term furnished apartments and densification projects.'

[davebowler] 18/10/2019 08:34

18 October 2019

Phoenix Spree Deutschland Limited

(The "Company" or "PSDL")

Commencement of share buy-back programme and condominium sales update

Phoenix Spree Deutschland Limited (LSE: PSDL.LN), the UK listed investment company specialising in Berlin residential real estate, announces the commencement of a share buy-back programme and provides an update on progress with its condominium sales strategy.

Commencement of share repurchases at discount to NAV

On 26 September 2019, the Company indicated that it would consider buying back up to 10% of existing share capital in issue. This followed the completion of a new EUR240 million term loan on improved terms which provides additional liquidity to take advantage of opportunities arising from market disruption caused by changes to the rent laws, as well as weaknesses in the share price. This liquidity has been supplemented by the proceeds of condominium sales, details of which are provided in this announcement.

PSDL shares currently trade at a 24% discount to EPRA Net Asset Value as at 30 June 2019 and the Company announces today that it will commence the purchase of ordinary shares on the London Stock Exchange. The repurchased shares will be held in treasury.

Acceleration in second-half condominium sales at a 21.6% premium to book value.

Since the financial half-year ended 30 June 2019, a total of 10 condominium units have been notarised for sale with an aggregate value of EUR3.8 million. The average achieved value per sqm for these units was EUR4,685, representing a 21.6% premium to their book value as at 30 June 2019. These sales represent a significant increase compared with the first half of the current financial year, during which four units were notarised for sale, with an aggregate value of EUR2.5 million.

In addition to these notarisations, there has been an encouraging start to the marketing of the remaining occupied Boxhagener Strasse units by Accentro, with a number of notarisations expected by the year-end. Accentro is marketing the remaining 16 occupied Boxhagener Strasse units through their extensive network on behalf of PSDL.

The Company announced on 26 September 2019 that it had concluded a broader Cooperation Agreement with Accentro which potentially covers the entire portfolio of condominium projects owned by PSDL. Details of this agreement were set out in the interim results for the half year ended 30 June 2019.

Berlin rent cap update

PSDL and its legal advisors remain firmly of the view that the rent proposals as currently drafted are not lawful and are unconstitutional. In Germany, residential tenant law is governed by the German Civil Code and is therefore a matter for the Federal and not State Government There is considerable and mounting legal opinion supporting this view.

The Board also notes recent press reports that certain elements of the current Mietendeckel proposals continue to be the subject of discussion within the Berlin Senate. Specifically, the proposal that existing tenants can apply for rent reductions in certain instances is not supported by all parties within the Berlin coalition.

The Company continues to explore all options within the existing portfolio to optimise strategic flexibility pending clarification of the legality of Mietendeckel rules. As well as condominium sales, these include its new re-letting strategy focused on short term furnished apartments and densification projects.

Robert Hingley, Chairman of Phoenix Spree Deutschland, commented:

"I am delighted that we have seen an acceleration in condominium sales since the half-year end and that our partnership with Accentro has made a promising start. We look forward to further progress as Accentro begins to market other properties on our behalf. Our ability to convert units to be sold at a premium to book value underpins the strategic optionality and value within the portfolio. We are also pleased that our refinancing has allowed us to take advantage quickly of the share price weakness and start buying back shares at a significant discount to Net Asset Value."

For further information, please contact:


Phoenix Spree Deutschland Limited
Stuart Young [phone]
Numis Securities Limited (Corporate Broker)
David Benda [phone]

Tulchan Communications (Financial PR)
Elizabeth Snow [phone]

[kenmitch] 12/10/2019 12:35

Dividends can be protected from tax in an ISA.

Investment Trusts buying back their shares to control the discount don’t seem to realise it doesn’t work. The discount might reduce for a while but more often than not, the discount widens again until.........they start buying back again. And so on and so on.

And all the while competent managers are wasting money that could and should have been much better employed in investments.

Get NAV up and discount to NAV to zero or a premium,NOT by buying back, but by investing successfully. The many Trusts on low discounts or premiums rarely buy back because the discount is so narrow they don’t need to, and even those who wrongly believe buying back helps the share price,should realise that buying back at a premium would be even more pointless.

Successful Trusts don’t need to try to improve the share price by buying back.

[scbscb] 12/10/2019 10:59

Buying back shares definitely makes sense when the shares are on a discount to NAV. This is much better than dividends which are taxed so a one pound dividend in the hands of a shareholder be less than a pound say 80 pence. Buying back shares at a discount will increase the nav by more than the cost because of the discount. Shareholders can always sell a small proportion of their holdings to create an income and this will not suffer tax like a dividend.

[davebowler] 11/10/2019 09:50

Mentioned here as a holding in that excellent performer, TR Property Investment Trust-

[alpal2] 07/10/2019 17:06

FWIW: I am against share buy-backs. Shares I have been followed which have done buy-backs have seen a short term gain but have reverted to previous discounts as soon as the buying stops. I think a consistent progressive dividend policy has a much more lasting affect. Compare share price / NAV / dividend yield of Sirius with PSDL / SMTP.

[davebowler] 07/10/2019 16:47

Mention here-

Extract;
Berlin property company Phoenix Spree Deutschland (PSDL) reversed some of its recent falls with a 5.4% gain after the company outlined how it would respond to the city’s draconian plans to curb rents. Among other measures, it plans to use some of its £70 million cash pile to buy back its shares.

[davebowler] 04/10/2019 13:08

Poor journalism -

in the same article she says
......half of Berlin�s population are renters.

Then she quotes the manager-

�Just 15% of people in Berlin own and we expect that to increase because of the limited choice in the rental market. With mortgage rates as low as they are it is cheaper to buy than rent.�


7/10 Update .Since that article , it has been amended and her first comment has been removed!

[davebowler] 04/10/2019 13:02

Extract -'Today the shares trade at a discount of 26% below their net asset value (NAV) which the manager said was too low as investors were pricing in ‘a 100% chance of the rules sticking’, which he did not think was the case.'

[davebowler] 27/9/2019 09:10

Liberum :Real Estate Phoenix Spree Deutschland Peer completes large portfolio disposal at 10% premium to book value Mkt Cap £297m | Prem/(disc) -29.9% | Div yield 2.3%EventADO Properties has completed the sale of a portfolio of 5,800 residential units in Berlin (26% of total portfolio) to Gewobag Wohnungsbau Aktiengesellschaft Berlin, a major housing association. ADO Properties is a German-listed property company with a €4.4bn portfolio of residential properties in Berlin.The properties are located in the Spandau and Reinickendorf districts in the West and the North of Berlin. The implied sale price for the assets is €920m and the sale will increase ADO's EPRA NAV by 3.2%. Liberum viewThe large portfolio sale demonstrates that demand for residential assets in Berlin remains despite the recent uncertainty in the market caused by proposed changes to rent laws. The NAV uplift from the sale implies the sale price premium to carrying value was 10.4%. Phoenix Spree is well-positioned in comparison to many other landlords due to the flexibility in its business model to convert a large proportion of the portfolio to condominiums. The recent agreement with Accentro Real Estate provides capacity to accelerate the pace of condominium sales if required. 

[jeff h] 26/9/2019 15:55

As ever thanks for posting Dave