Phoenix Spree Deutschland Investors - PSDL

Phoenix Spree Deutschland Investors - PSDL

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Stock Name Stock Symbol Market Stock Type
Phoenix Spree Deutschland Limited PSDL London Ordinary Share
  Price Change Price Change % Stock Price Last Trade
0.00 0.0% 410.00 08:29:50
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davebowler: Liberum; M&A activity highlights attractive valuation Mkt Cap £358m | Share price 370.0p | Prem/(disc) -19.0% | Div yield 1.8% Event Vonovia has agreed an €18bn takeover of Deutsche Wohnen, the Berlin-focused residential property company. 76% of Deutsche's Wohnen's €26bn portfolio is located in Berlin. Under the terms of the deal, shareholders in Deutsche Wohnen will receive €53.03 per share (€52 per share in cash and a €1.03 dividend). This represents a 1% premium to the diluted EPRA NTA per share of €52.50 at 31 March 2021. The offer price represented an 18% premium to the prior close. Liberum view Investment demand for German residential portfolios remains high, particularly for regions with long-term structural rental growth. The Berlin market is more institutionalised (60% professional landlords vs. 34% national average) but M&A activity had slowed considerably following the introduction of the rent freeze. Germany's Federal Constitutional Court recently ruled that Berlin's rent freeze is unconstitutional, leading to a strong upturn in investor sentiment towards the sector. We believe PSDL's high-quality €768m portfolio would also be an attractive acquisition target and further upside from the current 19% discount is supported by the supply demand imbalance and M&A activity. We also note the latest portfolio valuation from December 2020 assumed the rent freeze would be in place for five years, offering near term NAV upside in the June 2021 interims.
davebowler: Liberum; Phoenix Spree Deutschland Mietendeckel declared unconstitutional by Federal Court Mkt Cap £361m | Prem/(disc) -18.1% | Div yield 1.7% Event Germany's Federal Constitutional Court has ruled that Berlin's rent freeze is unconstitutional. The rent freeze (Mietendeckel) came into law last year and has been the subject of a number of challenges. Doubts have consistently been expressed over the State of Berlin's ability to pass local rent legislation, given the differences from existing federal law. In Bavaria, a similar six-year rent freeze was blocked by the Bavarian Constitutional Court in July 2020. Liberum view Phoenix Spree has maintained throughout the process that there was a high likelihood that the rent freeze would be successfully challenged. The company 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 in the event that the Mietendeckel is voided. We note Vonovia has stated that it will not seek to claw back any of the foregone rents in the period since the Mietendeckel has been in place. PSDL's shares have risen by c.9% since the announcement this morning and we expect further upside in the near term. The removal of the rent freeze should lead to a strong upturn in investor sentiment towards the sector. The Mietendeckel would have had a material impact on earnings as it was expected to reduce like-for-like income by 16%. The latest portfolio valuation assumes the Mietendeckel is in place for the full five years.
jeff h: A few pertinent points about charges at PSDL:- "....For a trust such as Phoenix Spree Deutschland, however, it also includes a variety of other costs, said Mr Greenwood. “If you run an equity fund, there’s no maintenance needed. If you own a series of properties in Berlin, someone has to collect rent, someone has got to maintain them,” he said. The fund manager’s fee accounted for 1.2 percentage points of Phoenix Spree’s 3.65pc ongoing charge. All of the rest was made up by other costs, including those involved in buying and selling properties, renovations, general upkeep and dealing with tenants. Mr Greenwood argued some of these costs should not be seen in the same light as the fund manager’s charge. “Common sense would say any maintenance you do is part of the investment process, not part of the running costs of the fund,” he said...."
hpcg: 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.
hpcg: 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.
davebowler: 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: Liberum; Market transactions highlight institutional demand for Berlin residential remains Mkt Cap £292m | Prem/(disc) -28.3% | Div yield 2.3% Event Adler Real Estate has agreed to acquire all the shares of ADO Group, an Israeli-listed holding company and shareholder in ADO Properties, a German-listed property company with a €4.4bn portfolio of residential properties in Berlin. Adler Real Estate will hold a 33% stake in ADO Properties following the transaction. The total consideration is €708m and the purchase price represents a 15% discount to the June 2019 EPRA NAV. Adler Real Estate is one of Germany's largest residential property companies with a portfolio of 58,000 units (€5bn valuation). 2.9% of the company's current portfolio is in Berlin in addition to a large development project (7.9% of portfolio). Separately, ADO Properties announced at the start of last week that it is in discussion to sell a portfolio of 5,800 units in Berlin (26% of total). The price has not been disclosed but we note commentary from Adler's statement today suggesting that it may be at a premium to book value. Liberum view The transactions indicate ongoing strong demand for Berlin residential assets from institutional investors seeking to capitalise on recent uncertainty in the market caused by proposed changes to rent laws. The draft bill for the Berlin residential rent price law has been published by the the Berlin Ministry for Housing. The proposals would implement a five-year rent freeze. The draft bill is undergoing a consultation period before entering the legislative process by 15 October. Under the proposals, the rent freeze would take effect from January 2020. There is still a lot of ambiguity about the proposals and we would expect several legal challenges to the rent freeze proposals. Phoenix Spree is relatively well-positioned as it already has permission to convert over 50% of the portfolio to condominiums for sale and is in the process of seeking further approvals. Phoenix Spree has also recently completed a debt refinancing, providing significant firepower to take advantage of potential buying opportunities.
davebowler: Might be good news for our Commercial values -153 units. Liberum; Funds managed by Blackstone have agreed an all-cash transaction to acquire all of Dream Global REIT's assets and subsidiaries for CAD$6.2bn. The price represents a 9.1% premium to the June 2019 EPRA NAV. Dream Global REIT owns a portfolio of predominantly multi-tenanted office properties with a value of c.€4bn at 30 June 2019. The majority of the portfolio is located in the Top 7 German cities. The portfolio has a vacancy rate of 7.3%, a net initial yield of 4.7% and a weighted average unexpired lease term of 4.8 years. Liberum view The acquisition highlights the strength of investment demand for German commercial property. Total investment volumes for commercial properties in Germany totaled €24bn in H1 2019. This was slightly down on the prior year although is mainly due to a shortage of supply. Investor demand remains high due to positive market fundamentals. Yields for city fringe and secondary locations continue to compress due to a lack of supply of investment properties. ............................... According to this; HTtps:// As at 31 December 2018, the Portfolio consists of 96 properties containing 2,392 residential units and 153 COMMERCIAL units, with a total lettable area of around 183,100 square metres.
davebowler: Nick Greenwood of MIGO commentary in July's factsheet- Phoenix Spree Deutschland was the biggest riser in July returning 6.93%. Phoenix Spree has been weak since the Berlin state coalition government announced a rent freeze for five years, however in July the Federal government advised it was unconstitutional. Although not unexpected, this gave investors some confidence and the shares bounced.
davebowler: 8 August 2019 Phoenix Spree Deutschland Limited (The "Company" or "PSDL") Portfolio Valuation and Condominium Agreement Berlin Investment property valuation increases 3.7% for the half year to 30 June 2019 Phoenix Spree Deutschland (LSE: PSDL.LN), the UK listed investment company specialising in Berlin residential real estate, announces the interim valuation for the portfolio of investment properties held by the Company and its subsidiaries (the "Portfolio"). Increased portfolio value As at 30 June 2019, the Portfolio was valued at EUR665.2 million by Jones Lang LaSalle GmbH, the Company's external valuers (31 December 2018: EUR645.7 million). On a like-for-like basis, after adjusting for the impact of acquisitions net of disposals, the Portfolio valuation increased by 3.9 per cent in the six months ended 30 June 2019. This reflects the combined impact of market rental growth and the active management of the Portfolio. New condominium agreement with Accentro Real Estate AG Since the start of sales in Boxhagener Strasse, the Company's largest condominium project to date, the Company has successfully sold a total of 42 residential units and 3 commercial units to owner-occupiers, tenants and investors. The majority of the remaining 22 units are currently occupied. In order to accelerate the sales process of the remaining Boxhagener Strasse units, the Company has concluded an agreement with Accentro Real Estate AG, one of Germanys leading condominium sales platforms. Under the terms of this agreement, Accentro will market the remaining Boxhagener Strasse units through their extensive network on behalf of PSDL. After 18 months, Accentro is contracted to purchase any unsold units from the fund for a cash consideration, guaranteeing revenues on completion of contract. Update on proposed rent controls The proposed new Berlin State rent controls continue to create significant uncertainty which has negatively impacted the Company share price, resulting in a valuation discount to EPRA Net Asset Value as at 31 December 2018 of 28.6%. Both the share price decline and the discount are in line with the Berlin focussed listed peer group. On June 2019, as expected, the Berlin Senate approved in principle the draft term sheet for the proposed bill for new rent controls. Although the proposed details and mechanisms are as yet unclear, there remain serious concerns regarding the legality and constitutionality of the draft proposal given that rental price laws have always been determined under German federal legislation. A detailed analysis of the proposals will not be possible until the draft is presented at the end of August, after which there will be hearings from interested parties and experts and before entering the legislative process in October. The legal research department of the Bundestag, the German Federal Parliament, issued a statement highlighting that the proposals violate the German Constitution in a number of key aspects and that there are numerous legal arguments to support the view that State law cannot supersede Federal law. We would expect an increasing number of legal challenges as details of the draft bill are made public at the end of August. Given the uncertainty about the legal validity of the proposed rent controls, it is not yet clear what impact there could be on future property prices at this time. However, the interim portfolio valuation conducted by Jones Lang LaSalle GmbH does not factor in any impact on property values. Strategic flexibility Since the launch of Phoenix Spree 12 years ago, the regulatory environment has continually evolved. During this period the Company has successfully delivered positive returns to shareholders. The Board believes that the Company retains significant flexibility to adapt its business model. As previously disclosed, over half of the buildings owned by the Company are already split into condominiums and the Company is in the process of completing a major refinancing which will deliver sufficient liquidity in order to take advantage of opportunities arising from market uncertainty. Robert Hingley, Chairman of Phoenix Spree Deutschland, commented: "It is pleasing that the Company has delivered another resilient performance for the first six months of the financial year. However, it is also clear that our main strategic priority for the remainder of 2019 is to reassure investors that the company can continue to adapt in the eventuality that the new Berlin rent proposals are introduced. Significant preparatory work is already underway, although there is still considerable opposition and uncertainty on both the legality and content of these proposals. I am confident that the Company will be well positioned to respond when the regulatory environment becomes clearer." The Company expects to report its interim results for the six-month period ended 30 June 2019 towards the end of September 2019.
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