Phoenix Spree Deutschland Share Discussion Threads

[cerrito] 04/8/2021 10:37

Thanks as always for posting that davebowler. I am surprised that no NAV figure. I continue to be very comfortable with my holding here. I did some topping up in Q220 but have done nothing since then. One reason is that my online broker Barclays does not allow one to buy...probably because PSDL have not filled up one of their forms.

[davebowler] 04/8/2021 09:39

Liberum; 2.5% like-for-like revaluation gain in H1 Mkt Cap £387m | Share price 408p | Prem/(disc) -8.7% | Div yield 1.6% Event Phoenix Spree Deutschland's portfolio value rose by 2.5% on a like-for-like basis to €777.7m in the six-month period to 30 June 2021. The valuation uplift reflects increased market rents following the removal of the rent freeze and progress in condominium splitting. The valuation assumes market rents for the full period (the December valuation had assumed the rent freeze legislation was in place for five years). The portfolio value per sqm was €4,075 at June 2021 (December 2020: €3,977). Eight of the properties have been valued as condominiums, with a total value of €43m. The gross fully occupied yield on the portfolio is 2.9%. Phoenix Spree Deutschland has notarised 13 condominium sales in H1 2021 for a total of €4.3m. The pace of condominium sales was hampered by Covid restrictions during H1. The average price achieved was €4,821 per sqm, representing a 25.4% premium to book value. The sale price represents a 15.9% premium to the average value for the Berlin portfolio. 74% of the Berlin portfolio has been legally split into condominiums and applications are in progress for a further 11%. All of PSDL's leases had been structured to allow for the back payment of rents due for the period during which the Mietendeckel (rent freeze) was in place. PSDL has collected 89% of the €2.1m of back-dated rent which could be claimed from tenants. Liberum view The NAV gain as a result of the valuation uplift in H1 2021 is c.3.8%. This is at the lower end of the range in recent years but we expect continued strong performance from PSDL's portfolio over the medium term due to the ongoing supply demand imbalance. The removal of the rent freeze legislation will enable the company to return to its highly profitable asset management strategy to capture the significant reversionary potential across the portfolio. The company's confidence in its long-term growth prospects were demonstrated recently by the enhanced share buyback programme. PSDL has allocated a material amount of capital to the buyback programme and this has contributed to a significantly narrower discount to NAV.

[jeff h] 03/8/2021 10:38

Vonovia upped their bid slightly from E52 to E53 but Michael Muders from Fund Manager holder Union Investment still thinks it undervalues the company. FT says:- "....Muders argues that the book value of Deutsche Wohnen’s property is outdated because it does not reflect a landmark court decision in April that struck down a highly contentious rent cap imposed by Berlin’s local government. By the end of March this year, Deutsche Wohnen reported that its net asset value stood at €52.50 per share. But Muders insisted that the value of Berlin-based property had increased as a result of the court ruling. He said he estimated a net asset value of roughly €56 per share. “We are very uncertain if the shareholder’s interests still have the highest priority for Deutsche Wohnen’s management,” he added...."

[jonwig] 25/7/2021 07:30

FT, Friday - The €18bn takeover of German residential landlord Deutsche Wohnen by rival Vonovia has collapsed after the bidder narrowly missed the required level of support from shareholders. Has this any implications for PSDL? Possibly, as we're at a steeper discount than the two others (I think). Monday's reaction may be interesting.

[jeff h] 15/6/2021 11:07

New Edison report:- Https://www.edisongroup.com/publication/flexibility-to-extract-value/29619

[davebowler] 02/6/2021 09:11

Liberum; Additional share buyback programme Mkt Cap £368m | Share price 380p | Prem/(disc) -16.9% | Div yield 1.7% Event Phoenix Spree Deutschland intends to adopt a more proactive share buyback strategy in order to address the share price discount to NAV. The company will make a material allocation of capital to the buyback programme through a combination of existing cash balances, refinancing, condominium sale proceeds and the disposal of non-core assets. The new buyback programme will take effect immediately. Liberum view The enhanced buyback programme follows the improved outlook for the Berlin market after the recent court ruling that Berlin's rent freeze was unconstitutional. The buyback programme should have a meaningful impact on the discount to NAV. We believe the company is vulnerable to a potential bid and this may have influenced the decision to take a more aggressive approach on buybacks. We expect continued strong performance from PSDL's portfolio over the medium term due to the ongoing supply demand imbalance.. 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.

[mammyoko] 02/6/2021 07:22

Should be good for a reduction of 10% in the discount over time?

[davebowler] 28/5/2021 16:09

Fascinating- hTTps://www.iheartberlin.de/berlin-flat-quest-the-hilarious-game-about-apartment-hunting-in-berlin/

[cerrito] 28/5/2021 07:54

The FT today has an article on the video game Berlin Flat Quest illustrating the problems of renting a flat there which does not have the shower in the kitchen.

[davebowler] 25/5/2021 13:12

htTTs://citywire.co.uk/investment-trust-insider/news/ftse-steady-phoenix-rises-on-bid-talk-after-big-berlin-deal/a1512143?

[davebowler] 25/5/2021 09:20

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.

[rambutan2] 24/5/2021 23:05

Relevant enough to attract a bit of extra attention, I would have thought: 24-May-2021 / 22:25 CET/CEST Deutsche Wohnen and Vonovia sign agreement on merger of both companies Berlin, May 24, 2021 - Today, Deutsche Wohnen SE (ISIN DE000A0HN5C6) ("Deutsche Wohnen") and Vonovia SE ( "Vonovia") entered into business combination agreement ("BCA") regarding the merger of both companies. In this context, Vonovia has announced its intention to launch a voluntary public takeover offer pursuant to Section 10 para. 1 sent. 1, para. 3 of the German Takeover Act (Wertpapiererwerbs- und Übernahmegesetz) ("WpÜG") for all outstanding shares of Deutsche Wohnen against a consideration in cash in the amount of EUR 52.00 per share. In addition, a cash dividend of EUR 1.03 per share is to be paid to the shareholders of Deutsche Wohnen for the 2020 financial year in accordance with the proposed resolution for the annual general meeting of Deutsche Wohnen on June 1, 2021, which will bring the total value of the planned takeover offer to EUR 53.03 per Deutsche Wohnen share. Vonovia thus offers a premium of 17.9 % on the closing price of Deutsche Wohnen on May 21, 2021 and of 25 % to the three-month volume-weighted average price of Deutsche Wohnen shares as of May 21, 2021. The proposed takeover offer will be subject to a minimum acceptance rate of 50% of the outstanding shares in Deutsche Wohnen, merger control clearance and other customary conditions. Deutsche Wohnen and Vonovia expect that the merger control clearance will in any case be granted before the end of the acceptance period of the planned takeover offer. The management board and the supervisory board of Deutsche Wohnen welcome Vonovia's planned takeover offer and, subject to the review of the final offer document, intend to support it and recommend its acceptance to the shareholders. Furthermore, the members of the management board and the supervisory board intend to tender the Deutsche Wohnen shares held by them as part of the planned takeover offer. The business combination will lead to the creation of Europe's largest residential real estate group with a projected combined market capitalization of around EUR 45 billion and a combined real estate portfolio value of approx. EUR 90 billion. The combined company will carry the name "Vonovia SE". The registered office of the combined company is to remain in Bochum following the business combination, with the combined company being managed from Bochum and Berlin. The BCA also sets forth certain governance rights for the combined company. Mr. Michael Zahn is to be appointed as deputy chairman of the management board and Mr. Philip Grosse as chief financial officer of Vonovia. Furthermore, an executive committee below the management board is to be established, in which Mr. Henrik Thomson and Mr. Lars Urbansky will serve. Following completion of the takeover offer, two persons will be appointed to the supervisory board of Vonovia, upon recommendation by Deutsche Wohnen prior to completion of the takeover offer. Moreover, Mr. Michael Zahn and Ms. Helene von Roeder are to become members of the supervisory board of Deutsche Wohnen. As part of the business combination of Deutsche Wohnen and Vonovia, the two companies are taking responsibility for a social and sustainable housing policy. As the largest private housing providers in Berlin, they have concluded a "Future and Social Housing Pact" with the federal state of Berlin. Deutsche Wohnen and Vonovia have also agreed that they will abstain from operations-related redundancies with effect from a date prior to December 31, 2023 in connection with the transaction. In connection with the transaction, Deutsche Wohnen and Vonovia have also agreed on the sale and transfer up to 16,070,566 but at least 12,708,563 treasury shares of Deutsche Wohnen to Vonovia, at a price of EUR 52.00. In addition, the management board of Deutsche Wohnen, with the approval of the supervisory board, has resolved to increase the share capital of Deutsche Wohnen by up to EUR 12,130,478 by issuing to Vonovia 12,130,478 new shares, provided that Vonovia requests this by June 20, 2021 and Vonovia's shareholding does not exceed 37,833,806 shares as a result of this capital increase. Furthermore, Deutsche Wohnen and Vonovia have agreed that Deutsche Wohnen will exercise its right to cash payment instead of delivery of shares in respect of the outstanding convertible bonds of Deutsche Wohnen upon conversion in the event of a change of control. https://investegate.co.uk/vonovia-se/eqs/business-combination-agreement--offer-for-all-outstanding-shares-in-deutsche-wohnen-se/20210524212413ERPAR/

[jonwig] 24/5/2021 19:10

FT. But how relevant (note the premium)? German residential landlord Vonovia is close to announcing an €18bn acquisition of rival Deutsche Wohnen in a deal that would need the support of local politicians in the hot housing market of Berlin. Four people familiar with the matter told the Financial Times that Vonovia is to make an all-cash bid for Deutsche Wohnen, five years after an earlier attempt faltered. Vonovia is to offer €52 per Deutsche Wohnen share, valuing the equity at €18bn, a premium to Friday’s closing price of more than 15 per cent. Deutsche Wohnen also has €11bn of net debt. https://www.ft.com/content/70b536f7-9a30-4087-a2fc-dd43228a55ce

[davebowler] 13/5/2021 12:43

Numis -Justin Bell Property commentary- Phoenix Spree Deutschland – Property vs Politics Despite the very positive news last month on the striking out of the local Berlin government’s rental cap in the Federal courts, the rally in the shares has been modest and they are still available on a 17% discount to their December NAV… The market is still clearly harbouring concerns over politics with the German elections approaching in September with the Green Party gaining ground over the CDU in recent polls. PSDL management team have proved capable of generating strong returns against a backdrop of changing political headwinds and have optionality embedded in the portfolio through >70% split into condominiums. Ultimately, they are either able to enact their current business model of renovating vacant apartments to capture the c.40% reversionary potential and provide strong NAV growth; or they can pivot to selling apartments as condos where they have achieved uplifts of 20% to carrying value during the recent rental freeze/cap episode. Management continue to have the powerful ally of fundamentally under-rented units which are valued below replacement cost, in a city with net migration of 40,000 people a year and vacancy rates sub-2%. I think there is very good value on offer here for those able to take a medium-term view.

[jonwig] 28/4/2021 15:10

Ha! She is, and has no views (except glad Angela goes). However, her brother is a property developer and renter in Bonn, and is pessimistic about prospects, in particular taxation. The good side of this is that the coalition mindset means little radical is achievable; for instance you need (I think) 65% of the Bundestag to change basic laws (the key thing here).

[jeff h] 28/4/2021 14:05

Cant say that I know too much about German politics jonwig! - I shall bow to your views, or perhaps the views of your missus as if I recall she is German.

[jonwig] 25/4/2021 08:00

Jeff - the Questor article (thanks for that) carries a couple of comments and one of them says the Greens' manifesto proposes a nationwide Berlin style of rent controls. The only coalition which would achieve this is "green-red-red" (Greens-SPD-Linke), which is less likely than "green-red-lib" (Greens-SPD-FDP) and the FDP would probably veto it. Normally, I'd still expect the CDU/CSU to be in government, but Laschet seems to be a turn-off. It's analysed here: https://www.dbresearch.de/servlet/reweb2.ReWEB?rwnode=RPS_DE-PROD$HIDDEN_GLOBAL_SEARCH&rwsite=RPS_DE-PROD&rwobj=ReDisplay.Start.class&document=PROD0000000000517896

[spectoacc] 22/4/2021 09:40

That's a good read, thanks - had sold some, was wondering what to do with the rest but think I may sit on them. 550p a bit gutsy tho! Particularly with the possibility of the Greens being a force in the next national govnt.

[spectoacc] 19/4/2021 15:05

Interesting, tho disagree with almost everything in it. If anything, Berlin renters have enjoyed an interest-free loan, based on legislation that has itself turned out to be illegal.

[apollocreed1] 19/4/2021 14:19

hxxps://christopherward.medium.com/the-mietendeckel-rent-cap-may-have-been-illegal-but-those-celebrating-its-demise-are-in-for-a-8b2eb0384b35

[jeff h] 16/4/2021 11:45

Stuart Young got back to me regarding the EGM. Here is a recent interview with him including an extensive Q&A:- Https://quoteddata.com/weekly-show-120321-stuart-young-trim-1/ Https://quoteddata.com/weekly-show-120321-stuart-young-trim2-1/

[davebowler] 15/4/2021 15:31

Zoom presentation is on at the moment hosted by PSDL.

[cerrito] 15/4/2021 14:51

The point in the last para of the RNS concerning a possible change of government after the September elections leading to a change in Federal law, especially if the Greens do as well as current indications suggest they will is well taken...but as they PSDL say they have been able to ride the waves.

[jeff h] 15/4/2021 10:25

Does anyone know the details behind the forthcoming EGM?...resolution appears to be:- THAT THE ARTICLES PRODUCED TO THE EGM AND SIGNED BY THE CHAIR FOR THE PURPOSES OF IDENTIFICATION, BE APPROVED AND ADOPTED AS THE NEW ARTICLES OF THE COMPANY IN SUBSTITUTION FOR, AND TO THE EXCLUSION OF, THE EXISTING ARTICLES, WITH EFFECT FROM THE CONCLUSION OF THE MEETING. Why the change in articles?