Phoenix Spree Deutschland Share Discussion Threads

[davebowler] 20/4/2023 13:49

I'll mention the Barclays problem to PSDL as I have my ISA with them too!

[cerrito] 17/4/2023 15:53

While I am reluctant to make comparisons between PSDL and Vonovia, I see that the share price of both have recuperated abit in the last few days.
I note that my online broker Barclays does not allow me to purchase more PSDL shares no doubt because PSDL have not completed some paperwork.
Anyone else having problems making on line purchases of PSDL??
I need to say Barclays are not very flexible and I would not reccomend them to anyone and indeed if I was younger would close my account with them.
At the same time I get the impression that PSDL probably do not see completing Barclays paperwork requirement as a top priority.

[davebowler] 17/4/2023 05:05

hTTps://citywire.com/investment-trust-insider/news/trust-watch-scottish-mortgage-and-a-smaller-band-of-bargains/

[dennisbergkamp] 08/4/2023 08:56

Berlin is very different to the rest of Germany. Property was traditionally cheaper than most other large cities in Germany as the tenancy laws are more pro-tenant.

I can’t recall exactly but something like 10% every 3 years? They had this local rent cap law introduced in ‘19 which was repealed by their highest court a couple of years ago which should have got this moving in the right direction.

Rental income will stay solid but totally right in terms of interest rate hikes affecting underlying profit

Let’s see where it settles

D

[carlopig1] 08/4/2023 07:20

My comments re the business model not working was forward looking. Whilst there is no formal covenant concern, pfandbrief lenders become uncomfortable when leverage gets above 50%.
Ability to raise rents in line with costs becomes harder if tenant churn slows. The gap between revenue and refi costs will increasingly hurt as we approach 2025/26.
In such an environment who knows where NAV will be never mind the share price with no dividend to support it.
Whilst I would like to think more positively the reality is German property has significant headwinds facing them in the coming years.

[spectoacc] 07/4/2023 07:07

There's two angles surely. One is to say PSDL has a NAV of 423p, and is therefore seriously undervalued. Even valuations falling another quarter from here doesn't get to current s/p, albeit NAV would fall further than 25% with gearing, and covenants do need watching.

Second angle is to say it's a £174m mkt cap co bringing in £26m/year in rent, which doesn't seem likely to change all that much. Ignore the losses being reported - non-cash valuation falls.

As to whether the PSDL business model is busted - the one that sells condos is paused, likely temporarily. The one that owns a lot of rentals and brings in decent cashflow looks largely fine.

[carlopig1] 06/4/2023 16:08

Sadly I don't agree. The move in property values post December 22 has been dramatically lower. (Deutsche Bank put out a note that resi rpoperty in GermNy can fall 25%). The PSDL NAV will be down at least 10% next time and possibly up to 25%. All the property companies have cancelled their dividends. This is all about preserving cash. It is clearly far cheaper to rent than to buy although the supply demand equation is getting worse. That said if interest rates stay at these levels or increase then the PSDL model doesn't work. Best you can hope for is a low ball bid for the company at some point but PE buyers are waiting for more pain before tabling a bid.

[dennisbergkamp] 06/4/2023 12:43

This originally came to market at 50p.

Property in Berlin has 10x’d since then

Having exited a physical property recently out there, this would be a way to keep an interest - but a divi resurrection would inspire confidence - I guess the real issue in Berlin rentals hasn’t changed and probably worsened - the tenant has incredible power

D

[cerrito] 03/4/2023 19:38

Thanks davebowler for that link.
Anyone here privileged to be on the conference call he referred to?? They do not believe in IR for private investors.
I have most of my shares with my full service broker and checked to see if there had been any analyst reports out but apparently none--not even from broker Numis.Perhaps we will get some thing from Edison.
Vonovia has a bigger discount but not comparable given geographical diversification and debt structure.

[spectoacc] 03/4/2023 07:54

Averaged PSDL. Not calling the bottom - look at that chart - and a lot of other possible homes for the money atm. But PSDL isn't expensive here.

[gopher] 01/4/2023 00:14

Thanks - very interesting as AH says the problem is that you are not been paid to wait rather than any unsoundness in business.

[davebowler] 31/3/2023 16:48

at 18 minutes -Andrew Mc Hattie -(eventually) a positive slant at the end of the commentary !

[cerrito] 30/3/2023 07:25

Read this in the FT this morning to give some context
Quote
Meanwhile shares in European real estate groups are set for their worst month since the start of the pandemic, as investors bet that the weeks of banking turmoil will tighten access to credit and send property valuations plummeting. The MSCI Europe Real Estate index of large and mid-cap property companies has tumbled close to its lowest level since early 2009, falling 24 per cent since the start of March, massively underperforming the region-wide Stoxx 600 equity index, which is down 2.4 per cent over the same period.

[gopher] 30/3/2023 00:35

The company is trading at 50% of NAV which is likely to be accurate. I am not an expert on the Berlin residential property market and await comment on likely direction. It was rated as one of the cheaper capital cities in Europe so hopeful for a revival when current round of rate rises ceases.I shall be interested to see how far rental revenue increase this year and whilst there is no dividend the company is vulnerable given the NAV discount.

[spectoacc] 29/3/2023 08:15

Not starting that again ;) Buybacks did of course increase the NAV. But agree doing buybacks over being able to maintain divi is daft.

Is it possible the REITs get to that stage? Maybe, but they're compelled by REIT rules to pay out 90% of income, so they don't have the option of retaining it for the leaner times (which we may soon be entering).

Agree with you on Opportunity Cost - there's a lot of other cheap-looking stuff out there atm. Time will tell whether it actually is cheap, or only FV.

[kenmitch] 29/3/2023 08:08

The bears were right. I’ve taken the loss today. Cancellation of the dividend was the key reason as unlike with the likes of EBOX there’s no income while holders wait for that share price recovery. Bearing in mind the still big discount the share price reaction seems over harsh so a good chance this is the low. But my enthusiasm for PDSL was wrong and even when the share price recovers it will be without the added bonus of big dividends available from so many if the alternatives and I would much rather invest the cash raised from the PDSL sale in those.

The buybacks were definitively a waste of money. Other REITS buying back more heavily than PDSL like SREI also wasted a lot of money on buybacks at much higher prices. If nothing else current events just might reduce the clamour for them.

[spectoacc] 29/3/2023 07:49

Surprised the market reaction's so harsh, but buying back shares followed by divi cut is never a good look.

Agree a waiting game - but question whether I have the patience.

[hugepants] 29/3/2023 07:46

It's a waiting game this. Divi implications well flagged by cerrito. I switched half my holding into IPRP last week for diversification. IPRP performing just as poorly.

[spectoacc] 29/3/2023 06:41

No comments on the passed divi? Or when on earth it might return.

[spectoacc] 24/3/2023 16:39

Been poor since I dipped a toe in. Value will out eventually tho, whatever happens to Deutsche.

[cerrito] 16/3/2023 16:07

Thanks for those comments, kenmitch and Carlo pig 1 you posted while I was doing this .
Writing as someone who is long and wrong, it is frustrating that they did so many buybacks when the discount was so much smaller.
That said I do not see much hope for a substantial buy back programme even if they cut the dividend, which in 2021 cost E7. 5m.

Yes they will generate cash from sales of condominions but the amounts involved in the context of a E776m portfolio will not be great.
The Chairman in the interims was pretty clear that there was little appetite from big buyers to buy properties and he would not increase debt repeated in January . The LTV at 30.6.22 of 36pc is now presumably well higher so not clear where the funds will come from.
Well done to them for hedging their interest rates and for now the maturity profile is acceptable.
I note the last TR1 was in October last year when Bracebridge(of whom I know nothing) came in with 15pc and before that some in May last year when GS were fine tuning their position.
I am going on the basis that the 31.12.22 EPRA NTA will be in the E5. 09 to E5. 14 range as per the January TU and down from the E5. 72 at 6.22.
In theory possible that someone attracted by both the discount and the fact that the underlying investment proposition is sound and the business operationally seems well run will come in to take us out but we will have to wait for the macro situation to calm down.
How do the rest of you see it?

[carlopig1] 16/3/2023 15:44

They have no money to do any more buybacks. they are trying to preserve cash to cover the dividend. The only way they can finance buybacks is by selling some of their properties (at a premium to the price on their books c 20%) but the market for sales has slowed appreciably. the danger here is they get bought by a PE house on the cheap.

[kenmitch] 14/3/2023 10:06

Below is a post I did a couple of days ago on the very good “The Commercial Property Thread,” but in case not seen there I’m posting it here too.

“I agree with SKYSHIP that EBOX looks the best of them all at present. Close behind is one rarely covered on this thread, Berlin Property REIT, PSDL. PSDL is at a 52% discount to 494p NAV.

PSDL results are due at the end of this month. NAV sure to have fallen but possibly not by much. Dividend is small which will put some off, but as long as their results update reassures, share price upside could be large.

This might interest a few, but I’ll refrain from posting my views yet again so will just give the facts and the odd question.

PSDL started their last series of buybacks in June 2021 when the discount to NAV was 17% “a level that does not reflect the track record and performance of the Portfolio.”

The share price at the start of those buybacks was 397p compared with 236p now.

When those buybacks concluded in July 2022 the share price had fallen from the near £4 at the start of them to £3.20 and that “too wide discount” had widened further.

Earlier in September 2019 “the Company has bought back 5.1% of its shares as part of a buyback strategy designed to limit the downside risk to the share price.” Share price then was 390p.

Did those expensive buybacks achieve their aim of “limiting the downside risk to the share price?”

In their interim results in September 2022 (two months after completion of buybacks) PSDL reported “€63 million has been returned to shareholders from dividends and buybacks.”

Really?

The share price has fallen 40% from £4 at the start of those buybacks, to just £2.36! Is that really “returning money to shareholders” or is it in reality a 40% loss?

Now that the share price looks really cheap and at a massive 52% discount, compared with the 17% discount PSDL were keen to narrow via buybacks, perhaps there IS a case for buying back now. But they have stopped buybacks!

I bought PSDL too soon and am 16% down. I’m looking to average down but will wait for their results just in case there’s a big fall in NAV (I think a small fall is more likely) or any shock bad news that might explain the exceptionally wide NAV discount. If no such shocks PSDL looks a stunning bargain priced buy.”