Phoenix Spree Deutschland Share Discussion Threads

[smithie6] 14/3/2024 10:54

Will any of the supposedly high NAV/share at PSDL ever end up in shareholders's hands

Or

Just slowly slide off the table in to the hands of Qsix, year by year.
That sadly is what has happened at many dubious listed property companies.
Like hanging a carrot in front of a donkey.....it is tempting, but eating the carrot never actually happens !
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Personally, I always like to look at what % of the rental income is used by the people charging to collect & administer it. If it is too high a cut then I just think it stinks & I avoid the shares.

If the rental income at any property company just gets eaten on route then clearly shareholders, at the very end of the table, will never get any of it to eat.

[cerrito] 13/3/2024 19:27

HugePants
You did a good deal buying this morning and I would have joined you if Barclays allowed me to do so.
I note that trading by volume has been high by PSDL standards since Feb 23 this year.No surprise.
I have to say that I had never heard of the Epra index.

[cwebb1] 13/3/2024 17:29

I have consolidated some numbers based on the available full year accounts, between 2015 and 2022:

Total rental income: 141m

Total fees paid to Qsix: 80.5m = 57% of every euro of rent received.

You wonder why there is no cash left after paying the mortgages and other costs? You wonder why there is no cash left to distribute a dividend? How is this level of fees justifiable on any level?

Total fees paid to the "third party" property managers (the people actually doing the work): 8.9m = a reasonable 6% of rental income

These figures excludes 2023/4 numbers.

June is when their management contract renews for another five years. Whatever the performance of the fund, they will take their fees. Theft.

[cwebb1] 13/3/2024 17:22

The board is out of its depth. Today's RNS makes no sense whatsoever. So its due to be removed from the index next week but the share price decline is now suddenly explained by this?

No one believe the property valuations. In the article posted below from February Hilton says that the prices are unachievable in the market. I.e they are holding them in their books at artificially inflated values. They clearly have a very cozy relationship with their valuers. They have probably maintained the valuations at an inflated level to avoid triggering any loan covenants.

The "independent" board is nothing of the sort. Robert Hingley it transpires was indeed handpicked by Qsix and is a close personal friend of Michael Weston, a Qsix partner. The rest of the board members all seem to work for the fund's jersey post office box administrators. In total, the board has been paid 1.5 million between 2015 and 2022 according to the accounts. They have no incentive to stop the gravy train. Almost 190k a year for four or five suits to attend four board meetings a year. Nice work if you can get it.

[carlopig1] 13/3/2024 16:15

Aah, so the Board says this is all down to a technicality around reweighting of the index. It goes on to say the share price at 67% discount to EPRA NTA does not reflect the value of the underlying assets. YOU WOULD THINK ON THAT BASIS THAT ANY SENSIBLE BOARD MEMBER OR DIRECTOR WOULD BE FILLING THEIR BOOTS. Go figure.

[lawson27] 13/3/2024 11:51

Yep, bouncing nicely, should see it back to 160s, GLA

[hugepants] 13/3/2024 10:32

I bought back some based on this mornings update


Statement Re Share Price movement

The Board of Phoenix Spree Deutschland Limited (LSE: PSDL.LN), the UK listed investment company specialising in Berlin residential real estate, notes the recent movement in the Company's share price.

The board believes that this reflects index reweighting ahead of the removal of the Company from the FTSE EPRA index, which will become effective on Monday 18th March. The Board can confirm that it is not aware of any adverse material change relating to the Company's trading, which remains consistent with the business update issued on 7 February, highlights of which are reiterated below.

The Board considers the current share price, which values the Company at a 67 per cent discount to the most recently published EPRA NTA, and implies a value per square metre of approximately half the cost of construction, does not reflect the value of the underlying assets within the Portfolio........

[34adsaddsa] 12/3/2024 23:52

Maybe, but that's not something anyone can force.

Any activist/PE outfit could move in here and try to force a liquidation.

[hugepants] 12/3/2024 20:55

Isn't there also a chance one of the big outfits like Vonovia, Deutsche Wohnen etc make an offer?
No dividend is an obvious negative for me. It's almost expected when buying a property stock.

[34adsaddsa] 12/3/2024 18:40

Best case scenario is someone comes in and forces a liqiduation.

[cwebb1] 12/3/2024 16:43

The fundamentals of the business are just dire. There is simply no cash flow. Qsix are the biggest burn of cash. Coupled with lousy underperformance spanning multiple years. Lets be clear - they benefitted from interest rates going down and stopped working hard as the 'valuation' kept going higher. Now that's in reverse... The departure of one stuffed shirt seems to be connected in timing at least with the development project they pulled out of at a cost to PSDL shareholders of 4/4.5m.

[cwebb1] 12/3/2024 16:40

I bought at 390 and sold out at 280 on £100k investment. Hard lesson learnt. It would be remise of me to say, that more people have lost money on this than made any. Except for Qsix who get paid a %age fee of a fictitious NAV. They will be doing everything in their power imaginable to hold on to the management contract for this - the next time it comes up is June this year. They have removed the prospectus for the fund from the public domain to prevent or slow down anyone who wants to look into the articles. Shameful.

[spectoacc] 12/3/2024 16:37

TRY's involvement alone is a good reason to avoid it :)

[cousinit] 12/3/2024 16:33

But like so many others, it clearly can go lower than you might normally think.

I doubt Marcus P-M at TRY can single handedly support the price!

[cousinit] 12/3/2024 16:30

Market seems to be taking the view that the Berlin apartment market will continue to be moribund even with the prospect of rates falling

[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’.