Phoenix Spree Deutschland Share Discussion Threads

[hpcg] 24/9/2020 12:57

Well fair play to the Miton asset managers if they did encourage the PSDL board. It can be a tricky one as there have been no end of company buy backs that look to be below NAV but were really above, but that is certainly not the case here as transactions back up.

[davebowler] 24/9/2020 09:57

Good mention here-

[davebowler] 16/9/2020 16:46

Nicely timed Director purchase.

[davebowler] 15/9/2020 11:45

Note... In Bavaria, a similar six-year rent freeze was blocked by the Bavarian Constitutional Court in July.....

[davebowler] 15/9/2020 11:44

Liberum;
Phoenix Spree Deutschland has generated a 3.9% NAV total return in H1 2020. EPRA NAV was €5.06 per share at 30 June 2020 (31 December 2019: €4.92). NAV performance has been driven by a 2.6% like-for-like revaluation gain in the period. The valuation uplift is a result of modest yield compression and active management in the period.

The portfolio value per sqm was €3,839 at 30 June 2020 (December 2019: €3,741). Six of the properties have been valued as condominiums, with a total value of €33m. The gross fully occupied yield on the portfolio is 2.8%. Like-for-like rental growth has slowed to 1.8%, reflecting the impact of the Mietendeckel. New lettings in the period were completed at an average 18.6% premium to passing rents (40% premium in H1 2019).



Rent collection has remained strong throughout the period with 99.6% of residential rents collected. The Hartz IV welfare programme includes help for rental payments in instances of financial hardship and is available to tenants impacted by Covid-19. Commercial rents account for 11.6% of contracted rental income and the collection rate was resilient at 96.2%.

€2.5m of condominium sales were notarised in H1 2020 at an average price of €4,392 per sqm. The average sales price represents a 15.7% premium to book value and a 14.4% premium to the average portfolio value per sqm at 30 June 2020. An increase in condominium sales is expected in H2 and the sales agreement with Accentro Real Estate guarantees revenues of at least €4.5m in H2. 66% of the portfolio has been registered as condominiums and applications for a further 19% are underway.

PSDL believes there is a high likelihood that the Berlin rent cap (Mietendeckel) will be successfully challenged. The company's legal advice is that the proposals are unconstitutional and there are doubts over the State of Berlin's ability to pass local rent legislation, given the differences from existing federal law. In May, the opposition in the Berlin house of representatives and a quorum of Federal Parliament MPs lodged cases at Berlin's Regional Constitutional Court and the Federal Constitutional Court. In Bavaria, a similar six-year rent freeze was blocked by the Bavarian Constitutional Court in July. PSDL's portfolio valuation assumes the Mietendeckel is in place for the full five years.

Net LTV was relatively stable at 33.0% (32.6% at December 2019. The weighted average maturity of the company's debt is now 6.5 years with an average cost of 2.0%.

Liberum view

Given the combination of the rent freeze and the impact of Covid-19, it has been a robust H1 for PSDL with strong cash collection. The manager has sought to maximise the company's optionality in the event that the Mietendeckel is found to be unconstitutional. New tenancy agreements specify the rent payable while the Mietendeckel is in place and contracted rents (free market rent in the absence of Mietendeckel). The company remains confident on the potential for the Mietendeckel to be challenged. Phoenix Spree is well-positioned relative to its peer group as the company's size and strategy offer greater flexibility to adjust its business model. The price level achieved on the condominium sales gives comfort over the level of downside protection. The 2.6% valuation uplift is in line with the trend indicated by the latest figures from CBRE on the Berlin residential market. Price growth has slowed but still remains positive. Demand for condominiums remains relatively high in an undersupplied market.

[hpcg] 15/9/2020 10:28

There is a lot to like in the report:

* Absolute EPRA NAV up, NAV per share up.
* Buy backs resuming - very good use of the money with this discount to NAV even if it will be small.
* Sales are at a premium to NAV.
* Dividend is coming

The rent cap is a risk, they are very confident but as investors we have to be cautious. However it appears that even if it stands they can simply sell out of the affected areas at a higher valuation to eager home owners.

[cerrito] 14/8/2020 18:57

Was featured in the Telegraph Questor column yesterday

[davebowler] 11/8/2020 09:02

Liberum;
Phoenix Spree Deutschland's portfolio value rose by 2.6% on a like-for-like basis to €746.7m in the six-month period to 30 June 2020. The valuation uplift is a result of modest yield compression and active management in the period.

The portfolio value per sqm was €3,839 at 30 June 2020 (December 2019: €3,741). Six of the properties have been valued as condominiums, with a total value of €33m. The gross fully occupied yield on the portfolio is 2.8%.


Rent collection has remained strong throughout the period with 99.6% of residential rents collected. The Hartz IV welfare programme includes help for rental payments in instances of financial hardship and is available to tenants impacted by Covid-19. Commercial rents account for 11.6% of contracted rental income and the collection rate was resilient at 96.2%.

€2.5m of condominium sales were notarised in H1 2020 at an average price of €4,392 per sqm. The average sales price represents a 15.7% premium to book value and a 14.4% premium to the average portfolio value per sqm at 30 June 2020. An increase in condominium sales is expected in H2 and the sales agreement with Accentro Real Estate guarantees revenues of at least €4.5m in H2. 63% of the portfolio has been registered as condominiums and applications for a further 22% are underway.

PSDL believes there is a high likelihood that the Berlin rent cap (Mietendeckel) will be successfully challenged. The company's legal advice is that the proposals are unconstitutional and there are doubts over the State of Berlin's ability to pass local rent legislation, given the differences from existing federal law. In May, the opposition in the Berlin house of representatives and a quorum of Federal Parliament MPs lodged cases at Berlin's Regional Constitutional Court and the Federal Constitutional Court. In Bavaria, a similar six-year rent freeze was blocked by the Bavarian Constitutional Court in July. PSDL's portfolio valuation assumes the Mietendeckel is in place for the full five years.


Liberum view

The 2.6% valuation uplift is in line with the trend indicated by the latest figures from CBRE on the Berlin residential market. Price growth has slowed but still remains positive. Demand for condominiums remains relatively high in an undersupplied market. Given the combination of the rent freeze and the impact of Covid-19, it has been a robust H1 for PSDL with high levels of rent collection. The company also remains confident on the potential for the Mietendeckel to be challenged. Phoenix Spree is well-positioned relative to its peer group as the company's size and strategy offer greater flexibility to adjust its business model. The price level achieved on the condominium sales gives comfort over the level of downside protection. We estimate the upside from the achieved condominium sale price in H1 2020 to the value of the portfolio implied by the market capitalisation to be 54%.

[cerrito] 20/7/2020 16:05

Caught up on an article in the FT last week on DW continuing to buyredidential apartment blocks of the type favoured by Psdl in Berlin despite grass roots opposition.
The milieuschutz law was mentioned whereby the State can make a counter offer and as a result DW have apparently agreed not to sell properties they are looking to buy for 20 years.

[apollocreed1] 01/6/2020 15:47

Why is this down today? Is there a new regulation in Berlin?

[davebowler] 18/5/2020 09:59

Apartment costs in London versus Berlin -

[davebowler] 18/5/2020 09:53

11 May 2020

Phoenix Spree Deutschland Limited

("PSD" or the "Company")

COVID-19 Business Update

Phoenix Spree Deutschland Limited (LSE: PSDL.LN), the UK listed investment company specialising in German residential real estate, announces an update on the impact of COVID-19 on business operations.

Supporting our stakeholders

The Company's overriding priority is the health and wellbeing of its tenants, work colleagues and wider stakeholders throughout this period of unprecedented disruption. On 20 April 2020 the German government announced plans to begin to lift restrictions imposed on business and public life caused by the COVID-19 pandemic, becoming one of the first major European nations to commence the task of reopening.

Where necessary, the Company continues to support its tenants, both residential and commercial, through agreeing, on a case-by-case basis, the payment of monthly rents or deferring rental payments.

Limited impact on rent collection

To date, the impact on rent collection has been limited. In the month to 30 April 2020, 98% of rent due had been collected in total compared to 99% in January 2020.

Residential rent collection has remained particularly resilient, with over 99% of rent collected during the month of April. Germany's Hartz IV welfare programme includes help for rental payments in instances of financial hardship and is available to tenants impacted by the COVID-19 outbreak.

Commercial rents represent a small proportion of total rents, accounting for only 10% of rental income as of 30 April 2020. The COVID-19 restrictions involved the temporary closure of many commercial businesses, including a number of our commercial tenants. Following the latest German COVID-19 guidance on easing restrictions, many businesses are now in the process of reopening. During the month of April 2020, 89% of commercial rents have been collected, compared with 96% in January 2020.

The Company will continue to work sensitively, and on a case-by-case basis, with its tenants in arrears to agree appropriate and workable repayment schedules.

Successful refinancing on attractive terms, strong financial position

The Company is pleased to announce that on 8 May 2020 it refinanced the EUR16.4m of debt acquired as part of the share deal acquisition of the apartment complex in Brandenburg in December 2019. It was refinanced with a EUR20.3m facility using the acquisition facility negotiated with Natixis in September 2019. The new loan was signed on improved terms with an extended duration and lower interest rate. On completion of this refinance, the Company had gross borrowings of EUR283.0m and cash balances of EUR41.6m, resulting in net debt of EUR241.4 million and a net loan to value on the Portfolio of 33.1%.

As outlined in detail in the Annual Report, the Property Advisor has rigorously stress tested the potential downside scenarios associated with the Mietendeckel and COVID-19, including any potential impact on arrears and loan covenants. The Board is confident that the Company's liquidity and strong balance sheet leave it well placed to withstand any negative impact from the current short-term challenges.

Dividend and Outlook

As previously announced, the Company has declared an unchanged second dividend of 5.15 cents (EUR) per share, which is expected to be paid on or around 3 July 2020 to shareholders on the register at close of business on 12 June 2020, with an ex-dividend date of 11 June 2020.

Ahead of the lifting of restrictions imposed as a result of the COVID-19 pandemic, rent collection has remained resilient. Whilst there currently remains uncertainty surrounding the legality of the new Berlin Mietendeckel and the duration of legal challenges, PSD is well positioned to mitigate the financial impact pending legal clarification. On 6 May 2020, the parliamentary groups of the CDU/CSU and FDP of the Deutsche Bundestag officially filed for a judicial review of the Mietendeckel legislation at the federal constitutional court in Karlsruhe.

The Board remains confident in the long-term outlook for PSD, particularly given the strength of demand for housing in Berlin. The Company is due to announce its results for the half-year to 30 June 2020 in early September, and will provide further updates in the interim in the event that conditions substantially change as a consequence of COVID-19.

Robert Hingley, Chairman of Phoenix Spree Deutschland, commented:

"We have continued to focus on our top priorities of the safety and wellbeing of our tenants, suppliers and other key stakeholders. The business has shown its resilience throughout these unprecedented times and, although German COVID-19 restrictions are now in the process of being lifted, the Portfolio is well prepared for a protracted period of disruption should this arise. Recent legal developments challenging the legality of the Mietendeckel have been positive and our balance sheet strength and liquidity mean the Company is well positioned to weather any impact from both COVID-19 and the Mietendeckel until such time as market conditions normalise."

[davebowler] 15/5/2020 14:52

Deutsche Wohnen almost recovered from recent drop since the beginning of the year-

[hpcg] 11/5/2020 20:56

I honestly don't see a problem for PSDL with the rent freeze. Interests rates are nothing, or lower, they can sell units if rent and market rent do really go out of line, and not all their properties are in the area affected anyway. Frankly with a pandemic and global recession frozen rents may actually be a boon.

[jonwig] 11/5/2020 14:59

Their confidence on a good outcome of the rent-freeze action ought to carry weight. After all, I don't see them making a speculation without legal opinion.

And anyone who fancies a eurozone break-up could find a decent hedge here.

[hpcg] 11/5/2020 13:14

A solid if not spectacular safe hold for me seeing as I had a trade on from near the bottom. The yield won't attract a big audience of UK property investors. Assuming I make trading profits during the year I'll add at this level, and I would trade any breakout too.

[cerrito] 11/5/2020 10:49

I thought a reassuring update and good to see the judges in Karlsruhe are being kept busy and would be good to know if the Berlin regional constitutional court ave been wheeled into action. I would have thought that the Federal court is key but have no idea.
UK commercial landlords would be happy with the amount of rent they received in April.
I would have been flabbergasted if they had done anything with the dividend.

[cerrito] 14/4/2020 00:12

In the weekend House and Home section, on the residential property rental market in Berlin.Nothing new but gave a good flavour.
Said that last week a country court ruled the controls illegal which rather surprised me as my reading of the PSDL April 6 RNS was that nothing from the Berlin Regional Constitutional Court was imminent.

[cerrito] 06/4/2020 17:26

No surprise that the NAV figures came within the guidelines given to us on January 30th.
There are of course uncertainties with the Virus and the Mietendeckel; that said there cannot be many Trusts with such low LTV(32.6%) and such high occupancy(97.2%) that trade as a discount of 28% on an IFRS basis and 40% on an EPRA basis-even before adjusting for the weakening of sterling against the Euro at year end.
What is just as surprising is why I am not rushing out to buy more.
Will be interesting to see if and when PSDL recommence their buyback programme with 6.5% of the share capital left to go and of course we still have Invesco with their 4.99%.
Incidentally on Mietendeckel, I note with some surprise that no one has started a Judical Review or Injunction despite this being so well flagged. Perhaps I misunderstand the German legal system.

[davebowler] 06/4/2020 10:23

Liberum
Event

Phoenix Spree Deutschland has generated a 9.1% NAV total return in 2019. EPRA NAV was €4.92 per share at 31 December 2019 (31 December 2018: €4.58). NAV performance has been driven by a 7.1% like-for-like revaluation gain in the year.

Like-for-like rental growth remained strong at 5.6% The average rent across the portfolio is €8.7 per sqm. The average rent achieved on new lettings in 2019 was €11.9 per sqm. New lettings were agreed at an average 36.4% premium to passing rents. The vacancy rate remains low at 2.8%.

Condominium sales in the period were €8.8m (2018: €9.0m), representing an average price of €4,711 per sqm (25.9% above portfolio value per sqm). A further €1.4m has been notarised post period end.

The new Berlin rent cap (Mietendeckel) has now become law following publication in the official gazette on 23 February. The company's legal advice is that the the proposals are unconstitutional and there are doubts over the State of Berlin's ability to pass local rent legislation, given the differences from existing federal law. The legislation is being reviewed and this could result in a judicial injunction, leading to a suspension of the implementation of the Mietendeckel pending a final legal ruling.

Phoenix Spree has sought to maximise flexibility due to the uncertainty caused by the new legislation. New re-letting contracts include clauses to enable the company to charge rent permissible under the previous system if the Mietendeckel is voided. The company is also considering the option of short-term furnished lettings until there is greater clarity on the legality of the Mietendeckel.

The focus on condominium sales will increase. 58% of the portfolio is registered as condominiums with a further 29% in the planning stage. The company has also engaged Accentro Real Estate AG (condominium sales platform, which could speed up the pace of disposals. The cooperation agreement with Accentro 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.

The board has suspended the share buyback programme as a result of the volatility created by the COVID-19 pandemic.

Net LTV has increased to 32.6% from 26.8% at June 2019. The increase was due to a €240m loan refinancing in the period. The weighted average maturity of the company's debt is now 6.6 years with an average cost of 2.0%.

Liberum view

At this stage, the is little more the company can do until the effect of the new rent legislation and COVID-19 becomes clear. Phoenix Spree is well-positioned relative to its peer group as the company's size and strategy offer greater flexibility to adjust its business model. The progress of the condominium sales process is encouraging and the price level achieved provides comfort given the level of downside protection (17 residential units were sold in the year at an average price of €4,711 per sqm - 26% premium to book value).