message to Berlin city council.
Your interference in the property market means that PSDL is selling its rental properties.
I assume that many other rental property owners have also been selling their properties.
The number of properties available to renters is hence surely reducing.
The city council may think it is clever in limiting the rental price to X €/m2 but if there are actually no apartments available (2-3 years later) at the controlled price of X €/m2 it is a hollow claim from the city council !!
And renters are not being well served by the Berlin city council if they can not find a flat to rent (because a lot of rental flats have been sold) & perhaps a renter has to rent a flat 20km away (outside Berlin's rent controls) & then travel every day in/out of Berlin. And pay for the cost of that travel every working day & lose a % of their life travelling. |
 Why does the company sign so many new apartment rental leases/contracts in a year when it is supposed to be selling apartments & PSDL says that apartments get a much higher price if sold unoccupied ?
Surely the company should not sign new rental contracts & instead just sell the empty apartments ?
Is it 255 new rental contracts in a year...
at say 300k€/flat,
= 76.5 million €
whereas in '24 only 10million € of flats were sold (1/2 occupied & 1/2 unoccupied)
======
an unoccupied flat might be sold at 1000-1500€/m2 more than an occupied one.
if 70m2
that is 70-105 k€ higher selling price
The rent is ~3%.
value at 3600€/m2 occupied, is 252k €
3% rent yield is ~7600€
10 years of rent equals the difference between selling occupied or unoccupied
so, for Phoenix to renew any rental contract for an apartment that can be sold on its own appears imo to be COMPLETELY INSANE !
(& Phoenix typically renews 255 rental contracts per year.
but are any of them for an apartment that could be sold on its own ?)
=====
Are QSix in reality dragging their heels on doing property sales ?
Berlin is a big city, there are a lot of people looking to buy a flat.
Instead of renewing a rental contract, just sell the flat.
255 rental contract renewals in '24 or '23 if sold instead
at 300k€/flat
= 255 x 300k€
= 76 million €.
but Phoenix only achieved sales of 10million € !
What excuse has QSix got ?
I can not see any real justification.
The excuse that the lender would not allow it in '24. That imo is a blatant LIE !!
The lender would imo have no objection at all to debt being repaid (since they could then lend out that money at a higher % rate) & PSDL text says there is no penalty for early repayment. And if 76 million € had been repaid due to selling flats the LTV % would have been reduced, which the lender would have been happy about. |
No surprise to me that the share price has gone up this morning.
From the way the RNS is worded I assume the continuation vote will go through.
Good to see the make up of the portfolio between PRS and Condominium so clearly spelt out..I had not seen that before. Seems we will need patience with the 50% share that is PRS. |
Edison-
Phoenix Spree Deutschland (PSD) has completed the strategic sale of a 16-building portfolio of rental properties. Under its amended financing terms, PSD can now significantly accelerate condominium (condo) sales, exploiting the wide sales premium over investment property valuations. This is central to an orderly realisation strategy aimed at maximising shareholder value, which we believe is materially ahead of that implied by the share price. Disposal proceeds will first be used to repay existing debt ahead of the 2026 maturity, although refinancing options to accelerate shareholder distributions are possible.
Following the 16-building sale, the remaining portfolio comprises 75 buildings. Of these, 61 (c 1,700 units) are primarily (80% of the units) legally split as condos. The other 14 buildings (c 500 units) are not split and will be operated as private rental properties. Under the new debt arrangements, the number of buildings that PSD is able to market as condos at any point in time has increased from six to 40, representing c 950 units. An initial phase of 16 buildings, including those already available for sale, will be marketed by end-2024, a further 24 by mid-2025, and further buildings will be added, subject to future financing arrangements. PSD is targeting an increase in condo sales to €50m pa by end-2025, increasing thereafter, and has already strengthened its sales capability by engaging two of the leading sales platforms.
The portfolio was sold to funds managed by Partners Group for €76m, most of which will be used to repay borrowings, with the balance available for capex and general corporate purposes. The net loan to value ratio (LTV) is expected to reduce to 42.7% (H124: 46.5%). The cost of debt will increase slightly (to 2.9% from 2.6%). While this strategic portfolio sale will reduce EPRA NTA by c 8%, from €3.68 per share at H124 to a pro-forma €3.39, it is the key to unlocking material value within the wider portfolio. Condo sales in FY24 have been at an average €4,122 per sqm, a 19% premium to the external portfolio valuation, which is mostly on a ‘rental valuation basis’, with just 5% on the higher ‘condo’ basis. PSD expects half of the portfolio buildings to be valued on a condo basis at end-FY24 and says that current market evidence supports achievable condo sales values of c €5,000 per sqm for vacant units and €3,500 for those occupied.
The board believes that the enhanced, managed realisation strategy will maximise shareholder returns and has brought forward (to 17 February) the continuation vote that was due by June 2025. Should this not pass, it will be required to consider alternatives, including voluntary liquidation. We will update our asset sale analysis conducted in June which highlighted the potential to at least maintain NAV, representing a very material uplift to the current share price. |
Complicated announcement today. I got my calculator out and worked out they sold 103m 'worth' of properties to Partners Group for 76m, so a 26% discount. They've taken a chunky 27m hit from this but the debt reduction puts them in a position to make further condo shares - hopefully these will be at something closer to their current book valuation.The total number of PSDL shares is 91,827,363. |
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. |
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 |
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... |
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. |
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. |
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. |
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. |
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!! |
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. |
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. |
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. |
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% |
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. |
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. |
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. |
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. |
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 ! |
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