Phoenix Spree Deutschland Share Discussion Threads

[hpcg] 20/3/2020 13:11

squeakeasy - PSDL has some funds on the shareholder register that might need redemption funds. Invesco, Premier and Miton. I assume Woodford's have all gone now but who knows. Invesco was 5.68% at end of 2019. But like everything else it needs buyers to step in.

[davebowler] 18/3/2020 15:47

DW has c. 2/3rds of its properties in Berlin.

[jonwig] 18/3/2020 14:52

DAX is down another 4% today. Indiscriminate selling.

[squeakeasy] 18/3/2020 14:49

What's the rationale behind fall in DW? I get CV19 but more precisely? Parallels with psdl?

[davebowler] 18/3/2020 13:31

Deutsche Wohnen trades at 28 euros, down from its recent peak of 39 euros with a recent NAV of 43 Euros.

[jonwig] 11/3/2020 16:24

This is well overdone, and I've bought back in.

hpcg - I know Berlin fairly well (my wife is German) and it's a bit chaotic. But there's no place in the country that I'd rather visit. And it's been dubbed the "startup capital" of Germany.

[hpcg] 11/3/2020 16:14

martindjzz - the virus will not reduce valuations. Berlin is a growing city of the young.

[davebowler] 11/3/2020 11:53

9 March 2020

Phoenix Spree Deutschland Limited

(The "Company" or "PSDL")

Transaction in own shares

The Company announces that pursuant to the general authority granted by shareholders of the Company on 21 June 2019 to make market purchases of its own ordinary shares, it repurchased 25,000 ordinary shares at a price of 288.08 pence per share, to be held in treasury, on 06 March 2020.

[martindjzz] 10/3/2020 14:19

I decided not to wait and have bought another 4000. However I am not entirely clear what impact the virus will have on the portfolio valuation.

[davebowler] 09/3/2020 09:03

33% below NAV

[hpcg] 24/2/2020 14:29

A non-rising rent still handsomely beats Bunds. So it's difficult to think of a more defensive asset which means the share price should really be rising. I hope the company allows sellers their wind so they can buy back at a steeper discount to NAV.

[cerrito] 13/2/2020 17:50

Interesting that first buyback RNS for almost a month. Perhaps Invesco does not want/need to sell down more.My reading is that they have only done 3.25m shares of the up to 10m programme.I am going on the basis that once the Berlin House of Representatives pass the rent freeze-expected in early Feb- PSDL will release a RNS telling us also what the next steps are.

[hpcg] 30/1/2020 11:39

Rents in Berlin have been going up because people want to live there, reflecting supply and demand. So property sale prices will rise too. The risk was whether they would be able to convert rental properties to for sale properties, which they can. I would suggest that the NAV is greater over a longer time frame, and that the opportunity cost, the delta between a level rent and an incrementing rent, is small even over several years.

[davebowler] 30/1/2020 10:36

RNS Number : 3502B

Phoenix Spree Deutschland Limited

30 January 2020

30 January 2020

Phoenix Spree Deutschland Limited

(The "Company" or "PSDL")

Investment property valuation as at 31 December 2019

Phoenix Spree Deutschland (LSE: PSDL.LN), the UK listed investment company specialising in Berlin residential real estate, announces the valuation for the portfolio of investment properties held by the Company and its subsidiaries (the "Portfolio") as at 31 December 2019.

Further increase in portfolio value

The total Portfolio was valued at EUR730.2 million by Jones Lang LaSalle GmbH, the Company's external valuers, an increase of 13.1 per cent over the twelve-month period (31 December 2018: EUR645.7 million). This valuation represents an average value per square metre of EUR3,741 (31 December 2018: EUR3,527) and a gross fully-occupied rental yield of 2.9 per cent (31 December 2018: 3.0 per cent).

On a like-for-like basis, after adjusting for the impact of acquisitions net of disposals, the Portfolio valuation increased by 7.1 per cent in the year to 31 December 2019, and 3.1 per cent in the second half of the financial year. This reflects the combined impact of market rental growth and the active management of the Portfolio.

Based on the Company's year-end Portfolio valuation, it is expected that the reported EPRA NAV per share as at 31 December will fall within a range of EUR4.90 - EUR4.96 (GBP4.15 - GBP4.20*) (31 December 2018: EUR4.58 (GBP4.11)). This represents a Sterling EPRA NAV per share total return within a range of 2.5 to 3.8 per cent for the financial year to 31 December 2019.

Update on proposed rent controls

On 26 November 2019, the Berlin Senate (the government of the federal state of Berlin) passed a draft bill for the Berlin rent price cap (Mietendeckel). It is expected that this bill will be adopted by the Berlin House of Representatives (the legislative chamber of the federal state of Berlin) and come into force in early February 2020.

The opposition in the Berlin House of Representatives and a parliamentary faction of the Federal Government have already announced that they intend to have the proposed legislation reviewed by Berlin's Regional Constitutional Court and the Federal Constitutional Court. The Company and its legal advisors remain of the view that the proposals as currently drafted are unconstitutional and illegal. In particular, they raise concerns about whether the state of Berlin is competent to pass local rent legislation, as the provisions substantially deviate from existing German federal law.

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. Jones Lang Lasalle GmbH have, however, confirmed that, to date, there has been no material adverse effect on either sale prices or rental levels in the Berlin market. The portfolio valuation conducted by Jones Lang LaSalle GmbH for year to 31 December 2019 reflects current Berlin market prices and does not factor in any additional future impact on property valuations that may materialise in the event the proposed rent controls are introduced.

The Company has previously set out how it intends to adapt its strategy during any period in which the proposed rent controls are in force to mitigate any short-term impact on the portfolio, while ensuring it maintains maximum strategic optionality in the event the proposals are found to be unconstitutional. Good progress has been made with these plans which include share buybacks, condominium splitting and sales, as well as selective acquisitions in areas within Greater Berlin that are not impacted by the rent control proposals.

Condominium sales at an 18 per cent premium to book value.

During the year to 31 December 2019, a total of 18 apartments were notarised for sale, with an aggregate value of EUR8.8 million. The average notarised value per sqm achieved was EUR4,068, representing a 17.5 per cent premium to book value and an 8.8 per cent premium to the 31 December 2019 Berlin Portfolio average of EUR3,741 per sqm. Condominium sales accelerated significantly during the second half of the financial year, with a total of 14 units notarised with an aggregate value of EUR6.3m, a 23.6 per cent premium to book value.

Share Buy-backs at an average 24 per cent discount to net asset value

Following the completion of a new EUR240 million loan facility on improved terms, the Company announced in September 2019 that it would consider buying back up to 10 per cent of existing share capital in issue. The share buy-back programme commenced in mid-October and, as at 30 January 2019, the Company had purchased a total of 3.2 million shares (3.2 per cent of the ordinary share capital) for a total consideration of GBP10.3 million. The average price paid represented a 23.9 per cent discount to EPRA Net Asset Value per share as at 30 June 2019.

Acquisitions unaffected by proposed Berlin rent controls

Notwithstanding the uncertain regulatory backdrop in central Berlin, there remains opportunity to acquire in areas within the Greater Berlin region that are unaffected by the proposed Mietendeckel rent controls. In December 2019, the Company completed the acquisition of an apartment complex in Brandenburg, with a total asset value of EUR43.5 million, for a net consideration of EUR24.2 million, excluding acquisition costs. This property meets the Company's investment criteria and the Board believes there is significant potential to add value through active asset management strategies.

Full year results

The Company will publish its full year results in early April 2020.

* Based on Sterling / Euro exchange rate as at 31(st) December 2019 of 1.182

Robert Hingley, Chairman of Phoenix Spree Deutschland commented:

"I am pleased with the continued performance of the portfolio and the progress made in mitigating any short-term impact on the portfolio during the period of uncertainty created by the proposed rent controls. Supported by our strong balance sheet, we remain well placed to take advantage of selective acquisition opportunities and share buy-backs, while maintaining our strategic optionality in the event the rent control proposals are found to be unconstitutional."

[davebowler] 30/1/2020 10:25

Liberum;
Phoenix Spree Deutschland

Valuation uplift drives 9.3% NAV total return in 2019

Mkt Cap £306m | Prem/(disc) -25.0% | Div yield 2.1%

Event

Phoenix Spree Deutschland's portfolio valuation at 31 December 2019 was €730.2m. After adjusting for acquisitions and disposals, the like-for-like increase was 7.1% (3.1% in H2). The average value of the Berlin-focused portfolio is now €3,741 per sqm (December 2018: €3,527). The valuation uplift was mainly attributable to rental growth and asset management initiatives.


The EPRA NAV is projected to be in the range of €4.90-€4.96 (415p-420p) per share at 31 December 2019. We calculate a 9.3% NAV total return for 2019 in Euros based on the mid-point of the range.


The draft bill for the rent cap was passed in November. It is expected to come into force in February. The proposed legislation is likely to be reviewed by Berlin's Regional Constitutional Court and the Federal Constitutional Court. The company's valuer has confirmed there has been no major change in sale prices or rental levels in the Berlin market yet. The valuation at December 2019 does not take account of any additional impact from the proposed rent controls.

18 apartments were sold in the year at an average price of €4,068 per sqm (17.5% premium to book value). Total sales during the year were €8.8m, of which €6.3m occurred in H2 as the sales process begins to accelerate in the wake of the change in rent control legislation.

In terms of buybacks, Phoenix Spree has acquired 3.2% of the ordinary shares in Q4. The board has previously stated it would buy up to 10% of the existing share capital.

Liberum view

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 this has the potential to accelerate further through the partnership agreement with Accentro. We don't expect today's valuation update will have any meaningful impact on the shares as uncertainty is likely to persist until there is greater clarity on the impact of the rent controls and the outcome of any legal challenges.

We have updated our estimate of the potential upside from the condominium sale process below. The current market cap implies a 25% discount to NAV and a 16.5% discount on the December 2019 portfolio value. Assuming the company can achieve sale prices in line with the level achieved in 2019, the potential upside is c.30% above the value implied by the current share rating. This makes no allowance for the time it would take to complete the disposal of a large number of units but should provide some reassurance on the downside protection within the portfolio.

[hpcg] 30/1/2020 10:00

Much to like in that announcement. Most notably I thought, that they had only used of third of the buyback facility. Long term, and somewhat irrespective of exchange rate variations, having a foothold in Berlin property is unlikely to do any harm.

[cerrito] 30/1/2020 08:29

I agree that the results are good and better than I had expected.
Of course the share price is suffering from the recent strengthening of the pound against the euro.

[alpal2] 30/1/2020 08:22

Results today: Seem very satisfactory with NAV £4-15.

[davebowler] 22/1/2020 11:44

News from last year but encouraging nonetheless.

[davebowler] 18/12/2019 10:01

Liberum;
Large acquisition outside of Mietendeckel area

Mkt Cap £310m | Prem/(disc) -20.1% | Div yield 2.1%

Event

Phoenix Spree Deutschland has agreed the acquisition of an apartment complex in Brandenburg for €43.5m. The property is being acquired in a share transaction and the net payment is estimated to be €24.2m (excluding acquisition costs). Phoenix Spree intends to refinance the debt secured on the property in 2020.

The property is located 7km south of Berlin and is unaffected by the new rent legislation (Mietendeckel). The area is experiencing high residential demand as the population has grown by 32% over the last 10 years. Asking rents have risen by 13% over the last 12 months.

The property is a former barracks, comprising 259 residential units and one commercial unit. It was redeveloped in 2018/19. 60% of the units have been completed with the remainder expected in stages with 40 units planned for completion in Q1 2020 and the remaining 65 in Q4 2021. The property also has new build potential for 60 units.

The average price paid per sqm is €2,674 and the estimated gross yield is 4.1%. The average passing rent is €9.02 per sqm. New lettings at the property in 2019 were up to €14.01 per sqm.

Liberum view

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 focus on condominium sales has increased in H2 2019 as a result of the new rent legislation. Phoenix Spree has already stated that it has increased the focus on short-term furnished lettings until there is greater clarity on the rules and their likely impact (expected by mid-2020). Phoenix Spree has also reported strong early progress with its condominium sales programme and we would expect this to accelerate. The company recently agreed a new €240m debt facility, providing significant firepower to take advantage of potential buying opportunities given the uncertainty in the market from the current rent control proposals. The acquisition appears attractive given the reversionary opportunities as a result of the refurbishment programme in addition to development potential.

[jeff h] 13/11/2019 20:08

Thanks for your posts dave

[davebowler] 13/11/2019 14:15

Good news for Berlin-

[davebowler] 13/11/2019 09:25

12 November 2019

Phoenix Spree Deutschland Limited

(The "Company" or "PSDL")

Transaction in own shares

The Company announces that pursuant to the general authority granted by shareholders of the Company on 21 June 2019 to make market purchases of its own ordinary shares, it repurchased 225,000 ordinary shares at a price of 320.25 pence per share, to be held in treasury, on 11 November 2019.