Phoenix Spree Deutschland Share Discussion Threads

[davebowler] 02/12/2024 15:42

Missed this from Quoted data 24 Sept

Phoenix Spree Deutschland (PSDL) has modified conditions on its debt facility with Natixis Pfandbriefbank AG to allow a greater number of buildings to be sold as condominiums from 6 currently to 40, representing around 900 units. The debt amendment is conditional on the company paying down other debt to provide more properties as collateral. PSDL said it was in advanced discussions to sell a portfolio of 16 rental buildings to allow this to happen. In line with its accelerated condominium sale strategy, the company has engaged two leading Berlin condominium sales platforms and earmarked 10 buildings for the first sales tranche, increasing the total number of condominiums that can be made available for sale from 75 units currently to 250 units by year-end 2024, with a further 24 properties expected to be made available for sale in the first half of 2025. The company is targeting condominiums sales because of the substantial premiums that can be achieved to equivalent single rental building valuations. During the first half of 2024, PSDL notarised 15 condominiums for sale at an average price of €4,292 per sqm. This represents a 23% premium to the portfolio valuation and a 57% premium to the portfolio value implied by the current share price.

[bisiboy] 10/11/2024 23:20

I’m out bought well but should have sold years ago small profit just don’t seem to learn from previous mistakes.i just don’t think externally managed funds work in this market

[craigso] 06/11/2024 13:25

Promising RNS this morning that is buried underneath bigger news...

"The Company... is in advanced negotiations to sell a portfolio of 16 buildings rented on a PRS basis."

Combined with the progress on condominiums - and I'm not sure how large a % of properties are in play - but it does seem like we are getting closer to >NAV realisations...

[davebowler] 24/10/2024 10:25

MIGO Opps latest factsheet states they believe PSDL -one of its top 10
holding making will be able to sell its portfolio at a premium to NAV.

[cerrito] 16/9/2024 10:33

Peter Guthman the Berlin estate agent has just put out its newsletter saying overall prices are stabilising but that Betlin apartment prices are 12% lower than a year ago.They do have info per neighbourhood.

[davebowler] 11/8/2024 08:07

MIGO City wire comment- was Phoenix Spree Deutschland (PSDL), a portfolio of Berlin residential property, that has been blindsided by changes to property rules in Germany that have penalised landlords.The trust, which has a 2.8% position in MIGO, trades at a near 60% discount as despite the demand for rental accommodation in the German capital, the shares drifted.'There is little demand for this asset class amongst UK investors and it is likely that the trust will lose next year's continuation vote,' the managers warned.

[elbrus55] 23/5/2024 04:18

It is Jersey company, listed in London in Sterling. It is unlikely to appeal to most German investors. There may be tax complications for them. There will be various restrictions on marketing under German and EU law. Germany has plenty of property funds of their own.I am sure why PSDL would actually want to market themselves when they are not raising new capital. Of course, many investors could still buy it through brokers and engage with Investor Relations if they want.

[cwebb1] 18/5/2024 19:33

On the AIFM question, you could call the investor relations person (who i have just found out we have been paying for on top of all the management fees). Though I would prepare yourself for a having a totally incomprehensible conversation with him!!

[cwebb1] 18/5/2024 19:27

I can offer some colour on the botched “Erkner” project. Firstly, Q6 have no experience what so ever (from what I have seen) in doing any property development. This is a much higher risk profile than managing some rental apartments and selling the odd one. Did they even have a mandate for development(?). Putting that to one side. The now departed ex-“CEO” of Germany J. Schwangshiedt (spelt correctly?) is best friends with Mingazini. This has been confirmed by a number of real estate sources I spoke to in Berlin on my last visit. They have done a number of ‘sweetheart217; deals. So wherever Mingazini went, his friend Schwangshiedt was there to sign deals using other peoples money. Q6 failed in this development strategy (but still creamed fees from shareholders with not even a slap on the wrist) - PSD shareholders then had to pay 4 or 5million to the “grounds”; i.e. Mingazini to get out of the deal. Why? Because as I have been saying for months now, the cash flow from this fund is barely existent and so they couldn’t complete on the signed contract. No surprise Schwangshiedt was “retired”; just as this latest screw up was announced. The board is complicit in this - they have failed to provide adequate oversight and seem to be singing to the tune of their paymasters Q6 - even though the money belongs to shareholders.

The PSD board used to be independent around 2017/8 - they removed all the ‘independent’ directors and replaced them with p.o box rent a directors from the law firms and administer in Jersey where the PSD is registered. Have a look at the composition.

As I have also been saying, the ”valuationR21; and stated “NAV” of PSD are wholly fictitious, and bordering on fraudulent. The NAV of properties is unachievable. Prices have dropped by 50% in Berlin. Don’t believe me? Q6 announced that they are in a new JV with Partners Group to buy residential buildings in Berlin (this is all every estate agent in Berlin is talking about as they are one of the few investors) Why then is Partners Group not making offers or buying any of the PSD properties? Because the valuations are so absurd that PSD can’t sell them for fear of losing face or the house of cards falling down. I fell over laughing at their ‘new strategy’ to sell 50 million of apartments. Each annual report tells us about this treasure trove of value - they have barely managed to sell 50 million in total since listing! Forget one year! The apartment sales market was wholly speculative. Germans were buying them when interest rates were zero and they were getting no interest in the bank. This is over and down with. I would caution anyone looking at this investment as a ‘discount to NAV”. Many of us have been saying that the real LTV was in its 50’s or 60’s when the company was reporting it was in its 40’s. Why are we one step ahead of these bogus scam artists when the ‘analysts̵7; from Numis and Fund Managers put out articles telling us about the wonderful state of things….

Nick Greenwood - I had to look him up! Citywide rank him number 1000+ (have a look) in fund manager rankings and he has managed to return a negative 3 or 4 % to his investors cumulatively in the last three years (thats before his fund fees). So he comes out saying how encouraging this new strategy is for PSD - does he know anything at all. Is he investing more of his investors money into this strategy. I think we all know the answer to that!

This is a house of cards built on terrible cash flow, a rent controlled market, a lack of liquidity, depressed valuations, huge refinancing risk of its mortgages (more to come), and a incompetent and fee hungry management agreement.

[unk98765] 09/5/2024 07:23

And PSD is an AIF and QSix a regulated AIFM. Anyone have an idea whether an AIF like PSD can be "marketed" to investors in Germany, for example? Where investors might have a better idea what is the real intrinsic value of the PSD portfolio? Or is this way there aren't investor roadshows in continental Europe? Confused on this point.

Having said all that, probably wouldn't help much considering its impossible for an investor to have any sense of intrinsic value of the PSD portfolio owing to the fact that nobody knows that is in the PSD portfolio. The company says is owns 95 buildings. But doesn't seem like they say which ones? Hard to really know how to value a portfolio if its not known whats in it. That's kinda tough for a property fund investor.

[unk98765] 09/5/2024 07:00

Anyone know what is the connection between The Grounds AG, behind the Erkner project, and the Cevdet Caner ring? The board of The Grounds includes directors close to Cevdet Caner, as per Fraser Perring's Viceroy reports on Adler Group and Aggregate. And then there's the various transactions between PSD and Accentro Real Estate AG, another entity with suspected links to Cevdet Caner. Anyone know why there should be so many links between Cevdet Caner entities and Phoenix Spree?? Lots of coincidences here. And Accentro was the sales partner on the PSD privatization condo sales...which have been disappointing. No wonder, perhaps, given the implosion of Accentro. This deal was agreed while Mingazini was CEO of Accentro. Oh, what a coincidence, he left in 2020 and went to The Grounds and guess what -- then PSD enters a large scale development agreement with The Grounds. Hmmm...that's kinda weird.

[cerrito] 06/5/2024 22:45

In partial answer to my comment in 739 on the difference between gross and net disposals, note 10 tells us that last year disposal proceeds were e13m and disposal costs were e441k ie 3.4% and will this year will be higher with the manager’s selling fee.
For some reason in 2022 disposal proceeds were e13m and costs e957k. ie 7.4%

[cerrito] 06/5/2024 22:07

Bearing in mind davebowler's 706 ref the inflexible bank covenants,I was interested to read in the Outlook section the phrase quote subject to the successful conclusion of current debt negotiations unquote with reference to portfolio sales. I note they refer to 2024 sales of e 50m in the context of gross debt of e324m. I assume they mean gross sales and too bad no IMC type event where we can fund out the net proceeds.
At the risk of being called a party proper I see that more than 7 months have passed since the September 27 Interims RNS with talk of accelerated sales and we do not have much to show for it.

[davebowler] 05/5/2024 08:53

Citywire....Fund manager Nick Greenwood this week told me the decision of Berlin residential property fund Phoenix Spree Deutschland (PSDL) to ramp up sales of its condominiums was 'very significant' and should finally see the 59% discount in the holding start to narrow.

[cerrito] 29/4/2024 21:59

I just got the latest of the occasional emails put out by this Berlin estate agent-Gothman.
My problem is that in the publications they put out, they describe how various areas in Berlin are going but I have not organized myself to see where PSDL have their properties.

[davebowler] 22/3/2024 16:13

MIGO commentary-
Despite strong demand for rental housing in the
German capital the shares continue to drift. There is little
demand for this asset class amongst UK investors and it
seems likely that the trust will lose next year’s continuation
vote.

[smithie6] 15/3/2024 13:11

Ah, you could be right.

...the RNS does not help the reader by saying that the property was bought "recently" but then saying it was in 2022 !...for most PIs, 2022 does not merit the word "recently".

------

Selling price was 2.9% lower than the purchase cost but a number of costs have been intentionally omitted, to intentionally hide the facts from the reader & from shareholders, which reflects badly on the BoD imo

- lawyer cost for the purchase
- notary cost for the purchase
- German stamp duty tax or similar tax on the purchase. 200k€?
- interest cost of the money used for the purchase & own it for ~17 months.
340k€ ?
- owner's annual property tax for 2023 & 2024 (assuming that the owner on January 1st has to pay this tax, I assume there is one in German). Valuable flat so a biggish cost.
- ~17 months of charges from the building (to pay for maintainence, electricity, insurance, management etc). Big flat so a big cost each month, cost is per M2). 20k€ ?
- insurance costs. 6000€

Selling
- agent cost
- 1% to PSDL's property manager. ~48k€
- lawyer
- notary

Looks like it was perhaps never rented out.

-------

Perhaps 600k€ -800k€ loss ?? on 4.8m€.
A very high % investment loss for a property company in ~17months. Do that X times & you'll see the NAV fall hard & the share price.

Oh, that is what has happened !

[jonesy100] 15/3/2024 09:22

Smithie, Agree prices have moved against them. On the point about Donaustrasse, I concluded that the RNS was poorly written and meant the low price reflected the buyer would need to do the refurb. So it is then just a modest loss as stated. But could be wrong.

[smithie6] 15/3/2024 08:51

....company intentionally not reporting the truth or the real facts to the market

For example, with this condominium the company has made a notable loss.

The property had costs/taxes for its purchase, "significant costs for refurbishment", and costs/taxes (eg. lawyer, notary, selling agent) for selling it, & interest on the money used to buy/own it. And there is also a 1% payment to the property manager.
So, the real loss is much higher than the claimed 2.9% loss.

Also, it shows in black & white that the market has moved against the company. Prices imo have fallen. Otherwise that sale would have been at a higher price than the cost price, after the high investment in refurbishment.
And the RNS mentions that another dwelling was sold, at lower than the book price.

.... perhaps these directors can not be trusted, intentionally misleading the market imo, trying to give the impression of a 2.6% loss on this property when in reality it is much higher.
And added to the mess up of losing 4-5m€ by backing out of just one contract/project one gets the impression that they are not very good at doing property !!
The chart also says they are not very good at their job.

"The Company has notarised the sale of Donaustrasse, Neukoln for €4.8m, a value of €2,249 per sqm or a 2.6 per cent discount to the purchase price. The property was recently acquired (notarised for purchase in September 2022) and the sale price reflects the significant investment required to modernise the property."

[elbrus55] 14/3/2024 18:38

It is domiciled in Jersey. There is a Jersey - Germany DTA but cannot see anything very helpful in it. So German taxpayer could be daft to this security.

[elbrus55] 14/3/2024 18:23

Reits can be horribly tax inefficient for many people. I would never buy one outside a tax efficient wrapper / or for an individual who is resident in a country without a favorable DTA with the UK/DE.It simply may not make sense for some Directors to buy?

[smithie6] 14/3/2024 11:18

..indeed

(Years ago I recall warning people about investing in a new property company, I think it was, that was coming to mkt & doing a big fund raise
....its IPO document promised 8% return in each of the first 3 years....

PIs were hammering on the door to invest

People failed to see that if you invested 100p in shares, the IPO process took 10% (5% of that to brokers for people investing), 8% times 3 years = 24%, & say 3%/yr running cost for the first 3 years, with say 6%/yr income

So 100p became 100-10-24-9+18= 75p left as NAV/share in property. If shares at 25% discount to NAV then share price phps 56p.
While if inflation was 5%/year, then the 100p needs to be worth ~117p to have same value.
So, after 3 years the investors has 56p of shares & 24p in divis (paid from IPO cash, not from rental income !) = 80p

But the value needs to be 117p to have kept up with inflation...ie. a notable loss.

The lesson ?
Run away from IPOs that promise a high Divi for first few years....since it is probably just a carrot being dangled on a stick
...& the investor is the stupid donkey !!!!

[riskvsreward] 14/3/2024 11:15

One rule of thumb I use for filtering reits is to see if insiders buy any of their own shares. If they don’t back up their own business ideas why should I? If they don’t invest any of their own money there is a good chance they are in it to line up their own pocket at the expense of the shareholders. While this is not bullet-proof it will help you to avoid the ones like psdl, home and labs etc.

[spectoacc] 14/3/2024 11:02

Interesting, I came to a similar view on the UK REITs.

What appear relatively small management charges, actually eat up a huge percentage of the net income. Can be hidden, sometimes for years, by capital appreciation. But once the NAVs turn down, it becomes obvious.

Some are taking 50% of net income a year - regardless of whether it's a good year or a bad year.

Good example of a dodgy one is the now-gone LXI - something like £1bn of assets, charging £14m/year management, but what was the net income on that £1bn?

Heads they win, tails you lose, true of much of the investment management industry. But somehow feels more heinous in REITs.