Phoenix Spree Deutschland Share Discussion Threads

[frazboy] 28/1/2021 18:05

Hpcg - the last RNS on the 12th Jan showed a tranche of 75,000 purchased at ~ 320p. There was no mention of this being a final purchase, so could be that they’ve paused whilst taking stock but I would have thought that would warrant an update. And from the business update on the 5th:

‘PSD has authority to buy back up to 10% of its ordinary share capital. Share buybacks were resumed following the release of the Company's interim results on 15 September 2020, by which time it had become clear that the financial impact of the COVID-19 pandemic has been limited, with rent collection in the six months to 30 June 2020 broadly in line with the six months to 30 June 2019.

As at 5 January 2021, the Company had bought back 4,733,500 ordinary shares, representing 4.7% of the ordinary share capital, for a total consideration of £15.2m. The average price paid represents a 30% discount to EPRA net asset value per share as at 30 June 2020.’

[hpcg] 28/1/2021 17:51

From the September report:

Given current high levels of rent collection, and the lifting of the majority of lock-down restrictions in Berlin, I am pleased to announce the resumption of share buy-backs.

So perhaps related to the reverse of the above. However i have a feeling they may have used up their mandate. What I can't find is any information relating to this year's AGM which would have had the limit. Having said that the 2019 annual report suggests plenty of headroom

Following the completion of a new €240 million loan facility on improved terms, the Company announced in September 2019 that it would consider buying back up to 10% of existing share capital in issue. The share buy-back programme commenced in mid-October and, as at 31 March 2020, the Company had purchased a total of 3.5 million shares (3.5% of the ordinary share capital) for a total consideration of £11.2 million. The average price paid represented a 23% discount to EPRA Net Asset Value per share as at 31 December 2019.

[frazboy] 28/1/2021 17:04

Do we know what happened to the share BB here?

[hpcg] 08/1/2021 13:44

Buying more here. Whilst I accept that there are potentially higher growth companies money here is so easy to sleep at night and will return more than enough for a satisfactory year.

[hpcg] 06/1/2021 13:13

Bought more. Beginning to care less and less about Mietendeckel. They can simply sell their city properties and buy back shares and or invest in the outskirts. We are trading below book as it is and that should sensibly be increased by circa 14%, maybe even the full 20%. Pricing to rental capacity is irrelevant when the direct sale price is under appreciated.

[cerrito] 06/1/2021 10:40

If we can get the Courts to rule on Mietendeckel in the next 6 months, that will be great.
No idea if you can appeal-I suspect not.

[hpcg] 10/12/2020 15:53

They'll keep converting and selling properties I would think.

[hiddendepths] 10/12/2020 08:48

Been in here before but sold out when it became clear that the Mietendeckel was coming in. Tempted to buy back in but am dithering. I think it will be repealed - but could take quite a while and I doubt they'll ever collect on the back rent.

[jonwig] 07/12/2020 06:56

Cerrito - a change of government is not enough; Basic Law (Grundgesetz, constitution) has to be amended. That needs a 2/3 majority in both houses. Not impossible, of course, but it essentially demands consensus.

[cerrito] 06/12/2020 18:26

The Edison report is a good and detailed read though it did not change my thinking about PSDL much-ie the odds are that eventually the legislation will be repealed but do not expect anything soon.
If there is a delay, one assumes there will be some difficulty in collecting the extra rent that would be due.
Of course one thing that could change is if there was a change of political control in Berlin. That said my understanding is that it is not really efficient to think in terms of a CDU/Liberal administration.
I see that PSDL dipped their toes into the landtag of Brandenburg where the SPD is the largest party and AFD the second largest but the make up of the parties seems quite messy and no doubt have other issues on their minds.
No desire at all to sell at these prices but have difficulty in knowing if I should buy more.

[jeff h] 04/12/2020 13:36

New Edison report:-

[cerrito] 25/11/2020 22:06

hxxps://www.deutschlandfunk.de/dauerstreit-um-mietendeckel-kampf-um-bezahlbares-wohnen.724.de.html?dram:article_id=487954#
Another article covering Berlin and Munich but not terribly well translated.
Reminded me that on November 23 the final phase of rent controls came in.This is what PSDL said in the interims
quote
Final phase of the Mietendeckel, due to come into force in November 2020, will materially impact collected rents in 2021 unless legal challenge is successful.
unquote
I did not get the impression from reading this article that anything on ther legal front will happen till Spring.

[pdriccio] 22/10/2020 16:23

Signs of damage being done to rental market with Berlin's Mietendeckel.

hxxps://www.focus.de/immobilien/mieten/mietendeckel-kein-vorbild-fuer-andere-grossstaedte-berliner-wohnungsmarkt-vor-dem-kollaps_id_12558106.html

[hpcg] 24/9/2020 11:57

Well fair play to the Miton asset managers if they did encourage the PSDL board. It can be a tricky one as there have been no end of company buy backs that look to be below NAV but were really above, but that is certainly not the case here as transactions back up.

[davebowler] 24/9/2020 08:57

Good mention here-

[davebowler] 16/9/2020 15:46

Nicely timed Director purchase.

[davebowler] 15/9/2020 10:45

Note... In Bavaria, a similar six-year rent freeze was blocked by the Bavarian Constitutional Court in July.....

[davebowler] 15/9/2020 10:44

Liberum;
Phoenix Spree Deutschland has generated a 3.9% NAV total return in H1 2020. EPRA NAV was €5.06 per share at 30 June 2020 (31 December 2019: €4.92). NAV performance has been driven by a 2.6% like-for-like revaluation gain in the period. The valuation uplift is a result of modest yield compression and active management in the period.

The portfolio value per sqm was €3,839 at 30 June 2020 (December 2019: €3,741). Six of the properties have been valued as condominiums, with a total value of €33m. The gross fully occupied yield on the portfolio is 2.8%. Like-for-like rental growth has slowed to 1.8%, reflecting the impact of the Mietendeckel. New lettings in the period were completed at an average 18.6% premium to passing rents (40% premium in H1 2019).



Rent collection has remained strong throughout the period with 99.6% of residential rents collected. The Hartz IV welfare programme includes help for rental payments in instances of financial hardship and is available to tenants impacted by Covid-19. Commercial rents account for 11.6% of contracted rental income and the collection rate was resilient at 96.2%.

€2.5m of condominium sales were notarised in H1 2020 at an average price of €4,392 per sqm. The average sales price represents a 15.7% premium to book value and a 14.4% premium to the average portfolio value per sqm at 30 June 2020. An increase in condominium sales is expected in H2 and the sales agreement with Accentro Real Estate guarantees revenues of at least €4.5m in H2. 66% of the portfolio has been registered as condominiums and applications for a further 19% are underway.

PSDL believes there is a high likelihood that the Berlin rent cap (Mietendeckel) will be successfully challenged. The company's legal advice is that the proposals are unconstitutional and there are doubts over the State of Berlin's ability to pass local rent legislation, given the differences from existing federal law. In May, the opposition in the Berlin house of representatives and a quorum of Federal Parliament MPs lodged cases at Berlin's Regional Constitutional Court and the Federal Constitutional Court. In Bavaria, a similar six-year rent freeze was blocked by the Bavarian Constitutional Court in July. PSDL's portfolio valuation assumes the Mietendeckel is in place for the full five years.

Net LTV was relatively stable at 33.0% (32.6% at December 2019. The weighted average maturity of the company's debt is now 6.5 years with an average cost of 2.0%.

Liberum view

Given the combination of the rent freeze and the impact of Covid-19, it has been a robust H1 for PSDL with strong cash collection. The manager has sought to maximise the company's optionality in the event that the Mietendeckel is found to be unconstitutional. New tenancy agreements specify the rent payable while the Mietendeckel is in place and contracted rents (free market rent in the absence of Mietendeckel). The company remains confident on the potential for the Mietendeckel to be challenged. 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 price level achieved on the condominium sales gives comfort over the level of downside protection. The 2.6% valuation uplift is in line with the trend indicated by the latest figures from CBRE on the Berlin residential market. Price growth has slowed but still remains positive. Demand for condominiums remains relatively high in an undersupplied market.

[hpcg] 15/9/2020 09:28

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.

[cerrito] 14/8/2020 17:57

Was featured in the Telegraph Questor column yesterday

[davebowler] 11/8/2020 08:02

Liberum;
Phoenix Spree Deutschland's portfolio value rose by 2.6% on a like-for-like basis to €746.7m in the six-month period to 30 June 2020. The valuation uplift is a result of modest yield compression and active management in the period.

The portfolio value per sqm was €3,839 at 30 June 2020 (December 2019: €3,741). Six of the properties have been valued as condominiums, with a total value of €33m. The gross fully occupied yield on the portfolio is 2.8%.


Rent collection has remained strong throughout the period with 99.6% of residential rents collected. The Hartz IV welfare programme includes help for rental payments in instances of financial hardship and is available to tenants impacted by Covid-19. Commercial rents account for 11.6% of contracted rental income and the collection rate was resilient at 96.2%.

€2.5m of condominium sales were notarised in H1 2020 at an average price of €4,392 per sqm. The average sales price represents a 15.7% premium to book value and a 14.4% premium to the average portfolio value per sqm at 30 June 2020. An increase in condominium sales is expected in H2 and the sales agreement with Accentro Real Estate guarantees revenues of at least €4.5m in H2. 63% of the portfolio has been registered as condominiums and applications for a further 22% are underway.

PSDL believes there is a high likelihood that the Berlin rent cap (Mietendeckel) will be successfully challenged. The company's legal advice is that the proposals are unconstitutional and there are doubts over the State of Berlin's ability to pass local rent legislation, given the differences from existing federal law. In May, the opposition in the Berlin house of representatives and a quorum of Federal Parliament MPs lodged cases at Berlin's Regional Constitutional Court and the Federal Constitutional Court. In Bavaria, a similar six-year rent freeze was blocked by the Bavarian Constitutional Court in July. PSDL's portfolio valuation assumes the Mietendeckel is in place for the full five years.


Liberum view

The 2.6% valuation uplift is in line with the trend indicated by the latest figures from CBRE on the Berlin residential market. Price growth has slowed but still remains positive. Demand for condominiums remains relatively high in an undersupplied market. Given the combination of the rent freeze and the impact of Covid-19, it has been a robust H1 for PSDL with high levels of rent collection. The company also remains confident on the potential for the Mietendeckel to be challenged. 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 price level achieved on the condominium sales gives comfort over the level of downside protection. We estimate the upside from the achieved condominium sale price in H1 2020 to the value of the portfolio implied by the market capitalisation to be 54%.