Phoenix Spree Deutschland Share Discussion Threads

[spectoacc] 12/3/2024 16:27

Similar here, and similar painful loss. Question is, is there a price to get back in?

[hugepants] 12/3/2024 16:23

Hmm. I sold these at 160p quite recently at a loss. Thought Id probably regret it and the shares would keep rising but now sub 130p and heading down the toilet by the looks of it. Down 24% ytd whereas eg Vonovia only down a couple of percent.
NTA is 399p and LTV 42% at last results.

[cwebb1] 06/3/2024 09:37

Qsix certainly have a sense of humour.

[carlopig1] 01/3/2024 14:10

Really....so nothing to do with 500+k shares traded, by some margin significantly more than usual! Big holder wising up to shambles that is the QSix gravy train? Cynical, moi?

[davebowler] 01/3/2024 10:55

Asked Numis their opinion of the fall-
.....we think that it was in some way related to end of month index re-weightings (MSCI or EPRA) given the fall in market cap in past 12 months. BTW nothing to be concerned about with the new German CEO having spoken with the company…Joerg is 60 and has been looking to step back for a while so recruitment process has been going on for a while. Joerg still with the business so they are not losing his knowledge or relationships. Big thing for them at the moment is getting the debt providers to provide a bit more flexibility over being able to sell assets as currently very restrictive on selling condos (have to sell from one building at a time).

[cerrito] 29/2/2024 10:19

I was rather intrigued by yesterday's RNS as I had never heard of Mr Schwagenscheidt ; before. He -quite correctly-is not on the Board nor does he appear to be named in the Annual Report. No idea if he has moved on because of underperformance or if after 9 years he wants a change.. His successor has a good resume and indeed one wonders if the job is big enough for him. That depends on the amount of work they do with Partners Group as per the RNS.
I see from the Qsix website that there are 10 people in the Berlin Office.PSDL's Property Advisors fees and expenses were E6,862k up slightly from the 2021 figure of E6,722k. This seems rather alot compared to 2022 revenue of E25.9m. In addition in both years there was a performance fee of E343k but as I understand it none due for 2023.
I note the PSDL AR states that quote senior Property Advisorpersonnel and their families retain a significant stake in theCompany, aligning their interests with other key stakeholders.unquote

[davebowler] 08/2/2024 17:00

Phoenix Spree talks to lenders over ramping up profitable condo sales
Berlin residential property fund Phoenix Spree Deutschland wants to ‘significantly’ up the number of condominiums it sells to cut debts and improve shareholder returns.

Michelle McGagh

Berlin residential property fund Phoenix Spree Deutschland (PSDL) is in talks with its lenders to ‘significantly’ increase the number of condominiums it can sell this year after failed attempts to offload entire buildings.

The £166m investment company said it was also ‘examining other strategic options’ to increase condo sales in a bid to repay debts, resume its dividend suspended last year and return capital to shareholders frustrated by its 55% share price discount.

The company said it had seen a ‘material upturn’ in sales of condos in the second half of last year as buyers returned to the market, encouraged by ‘greater visibility in forward bank lending rates’. Last year, 25 condos were notarised for sale at a total value of €7.2m, representing a 53% increase on the €4.7m worth of sales in 2022.

Mike Hilton, chief executive of QSix which manages Phoenix Spree, said that the condos sold at an average of €3,976 per square metre, a 4.1% premium to their carrying value at the end of 2022, but below the historical average.


Hilton hopes to capture huge upside for shareholders as the fund’s share price only implies a valuation of €2,750 per square metre after a 45% fall in the past three years.

Only 4% of the portfolio is currently valued as condos, although the company has another 73% of assets in units that are legally split into condos but not yet valued as such. Bringing them to market ought ‘to materially increase sales volumes’, the firm said.

Since listing in 2015, Phoenix Spree has set about splitting multi-occupied buildings into condos and has increased the number of properties that have been legally split, even as new legislation was introduced in 2021 that limited the ability of landlords to divide buildings into single dwellings.

While the legislation was not retrospective and did not impact the buildings Phoenix Spree had already split, Hilton said it ‘inevitably230;increased the scarcity of condos available for sale, further exacerbating the shortage of supply’ and widened the valuation premium that condo units command versus their rental equivalents.


‘With over 1,900 units, representing 77% of the portfolio, now split as condos, Phoenix Spree is uniquely placed in the listed market to benefit from this trend,’ Hilton said.

Offloading properties has been a key focus for the company, which last year agreed to pay a 1% disposal fee to QSix in order to incentivise sales and return cash to shareholders.

However, Hilton noted that attempts to sell whole buildings had not been successful as market conditions were ‘not conducive to achieving sales’ at a fair value.

‘The few transactions that were agreed generally failed to proceed to sales,’ he said.

While the value of rental apartments may lag the sales value, rental strength remained strong in the second half of last year as inward migration and higher homeownership costs forced more people into rented accommodation at the same time as higher borrowing and construction costs squeezed housebuilding.

This pushed market rents to record levels, with rents signed at a 31% uplift to passing rents, or €13.70 per square meter – a 5.9% increase on 2022. Although Berlin rents are subject to the ‘Mietspiegel’ rent index which caps rent increases in the capital city.

While a new index will be released in mid-2024, Hilton said it is expected that it will ‘provide scope for further permissible rent increases to qualifying tenants, supporting rental growth from the third quarter of 2024 onwards’.

The fund reported a 5.3% slide in the valuation of its assets to €675.6m in the second half of last year as all but one asset experienced valuation declines driven by yield expansion. The exception to this was Donaustrasse, which was the trust’s latest acquisition and rose 26% over the period.

Hilton said the investment market remains ‘fragile’; and investment volumes have been 60% lower in 2023 than the previous year as investor sentiment faltered in the ‘weakening Germany economy’.

[cerrito] 07/2/2024 21:33

I didn't find anything really striking in this morning's RNS apart from the v important fact that over 2023 the portfolio valuation declined by 11.9pc and 5 3pc in H2..
Be good if the offers they have received YTD for e7.4m can be concluded.
One thing thar I do not understand is last year they notarized 25 sales for a total value of e7.2m ie an average of e288k. To me this seems very low. Anyone have an explanation??
I see that the 4 sales notarized year to date have an average price of e475k ,which to me also ,if anything ,seems on the low side.
Changing tack I was surprised to see that Ameriprise of Minneapolis had increased their shareholding from 16.2pc to 20pc as I had never seen them on the register before and after some digging saw that they are the owners of established shareholder Columbia Threadneedle who have never struck me as very active shareholders. Did some digging on the Web about 15pc shareholder Bracebridge Capital. They do a lot with the Yale Endowment Fund and I could find no indication as to how active they are on shaking up Boards.
Not planning to sell or buy in the immediate future.

[cerrito] 07/1/2024 20:55

Here is the Citywire article
quote
Berlin property investor Phoenix Spree Deutschland is left with a £4.7m compensation bill after pulling out of a deal to buy 34 homes to avoid increasing its debt.
Berlin residential property fund Phoenix Spree Deutschland (PSDL) has pulled out of a deal to buy a development in the Brandenberg forest, saddling it with a €5.55m (£4.7m) compensation bill.
The £155m London-listed fund cancelled its contract with The Grounds Real Estate Development for the sale of its Terra Homes project in Erkner on the south-eastern edge of Berlin. The trust had been due to purchase the 34 homes in a contract worth €18.5m but the contract was terminated by mutual agreement at PSDL’s request, according to reports in German newspapers.
According to Justin Bell of Deutsche Numis, PSDL has confirmed the cancellation of the contract and the subsequent €5.5m payment it has to make will have ‘no material impact on net asset value (NAV)’ and the decision to pull out of the deal ‘avoids drawing down further on debt to fund completion of the project and taking market risk on valuations’.
The property trust has been trying to offload properties over the past six months in a bid to raise cash to reinstate its dividend and hopefully narrow its persistently wide discount, which currently stands at 44%.
The fund even agreed to pay its fund manager, QSix Residential, a 1% disposal fee to increase sales of its condominiums in the German capital. The new fee was combined with a €5m cap on QSix’s annual management fee in the next 12 months, down from the €7m the fund manager earned in the previous year.
Shares in the Jersey investment company have slid 32.5% in the past year, mystifying shareholders such as MIGO Opportunities (MIGO) manager Nick Greenwood who believes that the closed-end fund deserves a much higher rating given the shortage of residential property in Berlin.
At 168p yesterday the shares languished on a 58% discount to NAV of 399p, although the valuation is out of date as it relates to the 30 June figure released in the half-year results in September.
unquote

[cousinit] 07/1/2024 11:24

I wonder why that didn't warrant an RNS.? Would have been nice to know the impact directly from the Co rather than via the broker.

Will QSIX earn the disposal fee...?

[davebowler] 07/1/2024 11:06

hTTps://citywire.com/investment-trust-insider/news/phoenix-spree-hit-with-5m-bill-as-it-backs-out-of-berlin-development/a2433302?re=116368&ea=252901&utm_source=BulkEmail_Investment+Trust+Insider+Weekend&utm_medium=BulkEmail_Investment+Trust+Insider+Weekend&utm_campaign=BulkEmail_Investment+Trust+Insider+Weekend

[cerrito] 01/1/2024 19:45

Just to make sure I understand is the relevance of the 2 posts on The Grounds project to show that yes there are bright spots in the Berlin property market?? Rather than the fact there is a PSDL involvement.
Guthman a Berlin property company puts out updates on the apartments market in Berlin and the last one of last week (which I appear to have deleted) suggested there are green shoots. It discusses how the market is in different areas of the City but I do not know Berlin well enough to know which area is most relevant to PSDL.

[davebowler] 01/1/2024 19:08

Encouraging extract.....Jacopo Mingazzini, Management Board of The Grounds, says: "Cancellation of the purchase contract at the buyer's request has no impact on further progress of the project, which is being continued by The Grounds as planned. We have currently already reached a construction status of 48 per cent and an award status of 90 per cent. The first houses are expected to be ready for occupancy in summer 2024. Renewed marketing of the project will begin on 8 January 2024. Due to the attractive location and strong demand for residential units in the neighbourhood of the Tesla factory, we anticipate lively interest from potential buyers and expect notarisation to take place in the second quarter of 2024 at the latest."

[jeff h] 01/1/2024 13:52

Erkner homes development announced March 2022 cancelled:-

[davebowler] 23/12/2023 11:28

HTtps://www.msn.com/en-GB/finance/other/german-property-prices-plummet-as-housing-bubble-bursts/ar-AA1lUChD?ocid=sapphireappshare

[davebowler] 20/12/2023 20:19

Migo Opps report...Disappointments include Baker Steel Resources, Phoenix Spree Deutschland and Macau Property Opportunities. In the case of Baker Steel there is currently little interest in lending to develop new mines and many of the trust's projects have been delayed in the absence of financing. It is noticeable that the carrying value of these assets are now only a fraction of what they would be worth as an operational mine. Baker Steel shares trade at a significant discount to the already depressed carrying value. It would only need a couple of successes to drive the share price significantly higher. It is a bit of a mystery as to why Phoenix Spree is so depressed given that locally listed peer Vonovia has been moving steadily higher in recent months. There remains a shortage of residential property available to rent in Berlin. The most likely reason is a lack of interest and knowledge about the asset class amongst UK Investors. After a burst of excitement about the reopening of China post-Covid, recent newsflow has been depressing and taken its toll on the Macau Opportunities share price

[davebowler] 11/12/2023 17:52

Do you have a breakdown of the £80m? I'll take it up with the broker.

[smithie6] 11/12/2023 12:40

80 million !!

Really !!

(..that property managers for listed companies take far too much & are often linked/owned by big shareholders so they can't, in reality, be sacked...
...it is very common

& an intentional scam at many listed property companies.

[cwebb1] 05/12/2023 15:41

Interesting.

Just got back from Germany, some points of interest:

- Prices of these apartment buildings in Berlin are at around 2700 euros. “Give it take”. “Condominium” sales have stalled across the city as speculators have gone home - i.e. earning more in the bank now that savings interest rates are positive.
- qsix has a new investor from Switzerland who they are buying property for. Everyone in the city is talking about this given how little activity there is. They have already closed on deals. So PSDL shareholders are footing the bill for infrastructure, staff etc through the exorbitant management fees charged - that were supposed to be for the benefit of PSDL properties - but qsix is now focussed on catching new fish for new money. Another kick in the teeth for shareholders. Frankly these guys get paid whatever the weather, what ever their performance. Unbelievable really. They deserve to get kicked out. Every action they take is self serving and not for the benefit of the shareholders. Conflict of interest??? Great to see the board acquiescing along.

The disaster train rattles on. What a terrible “manager”;. I’m still absolutely shocked at how they’ve taken over 80 million in fees to collect some rent and deliver dreadful underperformance. They just don’t seem to care. Let’s hope the other big shareholders see sense and force change sooner rather than later.

[smithie6] 03/12/2023 21:46

Can't argue with that.

European Convergence
(ticker was ?, ecdc ?)
was another dubious company. Founders had the management done by company X, which not surpringly was them ! So little desire/pressure to minimise the annual payment!
The founders (read managers ) got to own the assets since their high pay was not paid.
Overall money put in by investors was a few hundred million £ if my memory is correct. Complete wipe out for shareholders while the founders made money I think. (Or did they buy any shares during a fund raise & lose money on that ?)

Probus was another dodgy one, a wipe out for shareholders I think.
Was it Probs that used it's cash & perhaps new loans to buy building land in Spain. That moved cash/assets out of the company. The company then declared that the land bought did not in fact have building permission & hence it was pretty worthless. And that the money would not be recouped.
Was it an intentional con ?
We're directors involved ?
(Seems difficult to buy land with building permission that turns out not to have permission (& the company's money has been syphoned off), unless you are in on it).

One property company had apartments in Eastern Europe. Now, an agency/manager would normally charge ~10% of the monthly rental price to act as the manager. At the listed co. it was much higher.
And some apartments were apparently sold without the manger or the listed company knowing anything about it !! Sounds impossible to believe.

[spectoacc] 27/11/2023 14:05

HOME too.

I'm in PSDL & DCI, & was caught in SPDI - am now highly cynical.

Forgetting the outright fraud at HOME, or the shenanigans exposed at DCI, even the "reputable" ones take shareholders to the cleaners. Charges based on (usually) NAV, and seem moderately reasonable (eg £14m on a £1.5bn portfolio at LXI). Yet when you compare annual charges to annual income, some REITs are giving up as much as a quarter of income.

Like much of the fund management industry, it's a racket IMO.

[smithie6] 27/11/2023 13:52

"QED why the management changed the comp metric as they are focussed now on disposals and want their share."

Would it be fair to say that property managers for listed companies are less honourable than used car salesmen ??!!

I could reel off a list of companies where the conduct of the property managers has been pretty disgraceful.

FPO- arguably wildly excessive options for the boss; & breaking the overall guideline for all options of 10% over 10 years

- Convergence. Was it European Convergence. Property managers put the co. in their pockets for their high unpaid fees. At a few pence per share when investors had funded the same ppl at 100p/share ! >£200million smoked !
- Dolphin. Lse:dci Now renamed
Property manager/director recently sacked due to perceived/documented fraud.
>£100million reduction in value imo
- SPDI or similar name. Been a disaster
- Blacksea. Been a disaster
- Probus ?. Have I got the name right ? Wipe out. A fraud imo
...invested in building land in Spain, that moved millions of £ out of the company...turned out it had no permission as building land !!
Then administration!!

- Property investment co. with flats in Hungary. A scandal since some flats were sold without the company apparently knowing anything about it !

=======

I guess that bigger property companies or those operating only in the UK are much more honest but the % with property outside the UK that have been frauds is frightening!!

[carlopig1] 03/11/2023 15:06

Smithie6. Current avg debt fixed at c 2.4% till sep 26 early 27. Fwd euro curve suggests rates falling in 2026 to somewhere c 2.5+%. Add in margin spread and PSDL will be refinancing at c4+%. Rental income should pari passu grow at c 4-5%. Still leaves a neg balance of 1.5m+ pa. If rates don't drop as expected then the pain will be greater. Only way to balance the books is to sell some assets! QED why the management changed the comp metric as they are focussed now on disposals and want their share. Watch this space as we see chunks of stuff sold under NAV.