Phoenix Spree Deutschland Share Discussion Threads

[cerrito] 16/1/2017 22:35

Thanks to you davebowler for sharing that with us

[davebowler] 16/1/2017 10:50

Liberum;
Event
Taliesin Property Fund has reported a c.10% increase in its portfolio value for the 6 months ended 31 December 2016; this uplift is after adjusting for sales and capital investments. The portfolio value at the end of December was €318m (June: €289m) with an average value per square metre of €2,700 (June 2016: €2,440). The company estimates an adjusted NAV per share of c.€37 (3,157p) for 31 December 2016.

Liberum view
The 10% portfolio revaluation follows a 9.5% uplift in H1 2016 and reflects the positive trends in the Berlin property market such as rising rents as a result of constrained supply, the privatisation potential of the portfolio and that residential values are still below replacement cost (which is rising on the back of increasing land costs).

We believe the Berlin residential market offers one of the most compelling long-term investment propositions and our favoured play in this sector is Phoenix Spree Deutschland. In Sepetmber we upgraded our NAV total return forecast for 2016 to 12.5% from 10% following a strong set of H1 2016 results. The portfolio valuation at 30 June 2016 was €329.8m which reflected an increase of 16.7% over the half year; there is potential for further upward revaluation of the portfolio in the second half of the year given the beneficial structural forces in the Berlin residential market, highlighted by Taliesin's portfolio revaluation.

Additionally, Phoenix Spree has a more shareholder-friendly fee structure with an 8% performance fee hurdle, compared to a hurdle of Euribor plus 1% for Taliesin. The attractiveness of the investment opportunity is reflected in the shares' premium rating, with Phoenix Spree currently trading on a 14.4% premium to its June 2016 NAV.

Emerging Markets

[jeff h] 13/1/2017 13:04

NAV at Taliesin still showing strong growth:-

[jonwig] 05/1/2017 07:05

FT: "German push for home ownership drives price bubble fears" -

[davebowler] 15/11/2016 09:06

Liberum;
Phoenix Spree Deutschland (BUY, Mkt Cap £223m)
Material uplift in Deutsche Wohnen's NAV guidance

Event
Deutsche Wohnen's Q3 2016 report was released this morning and the strong set of results has a positive read-across for Phoenix Spree. As a reminder, Deutsche Wohnen is a €7.9bn market cap German residential property company with 70% of its assets in Berlin.

Deutsche Wohnen's quarterly report highlights the ongoing 25% reversionary potential of the company's core markets. Over the last 12 months, the average like-for-like rental growth for the Core+ assets is 3.5% and Berlin was the strongest performing region at 3.8%.

Deutsche Wohnen expects yield compression in the short-term particularly in Berlin where transactional evidence for average quality assets currently implies multiples of 25-30x (passing yields of 3.3% - 4.0%) and average prices per sqm in excess of €2,000. Replacement cost including land is currently c.€3,000 per sqm. This confident outlook has enabled the company to raise guidance for EPRA NAV per share by 15% to €30 by December 2016. This would indicate an expected NAV total return of 33% for the year.

Liberum view
Deutsche Wohnen's Q3 report provides further evidence of the strength of both the occupational and investment market for residential assets in Berlin. The long-term structural rental growth story driven by the supply/demand imbalance remains in place and the weight of investment demand may lead to additional NAV upgrades in the short term.

Phoenix Spree's high-quality portfolio is well-placed to benefit from these drivers and we still believe the shares offer considerable value at the current 14.6% premium to NAV given the potential NAV growth. Our forecasts assume only 25bps yield compression over the period to December 2018 and transactional evidence would suggest these numbers are conservative. Every additional 25bps pf yield compression would add c.6% to our NAV forecasts.

[jonwig] 17/10/2016 16:44

Two trades at 237p just before close then uncrossing at 244p. It does tend to be a thin market! Probably retrace first thing tomorrow.

[davebowler] 14/10/2016 09:02

Liberum;

Phoenix Spree Deutschland (BUY)
Attractive acquisitions

Event
Phoenix Spree Deutschland has exchanged contracts to acquire a portfolio of four properties in Berlin for a total of €18.75m (£16.9m) excluding acquisition costs. The price per square metre on the transaction is €1,970. The properties comprise 132 residential units and 16 commercial units and contain over 9,500 sqm of lettable space.

The properties are located in the districts of Mitte and Wedding and offer several angles for asset management upside including reversionary upside through modernisation and refurbishment and re-letting. There is also potential to increase the lettable space through attic conversion and new-build opportunities.



The company has also completed the first apartment sale in its latest condominium programme in Boxhagenerstrasse, Berlin for €4,195 per sqm (63% premium to July 2015 acquisition price of €2,580 per sqm). The sales programme launched in September and a further three units have also been reserved.

Liberum view
The purchased assets share a number of characteristics with other acquisitions completed by the company as they are under-rented and offer significant reversionary upside. The purchase price represents a discount of 8.4% to the average value of the company's existing Berlin assets at 30 June 2016. The assets are centrally located and the upside potential for the assets is demonstrated by the average purchase price for condominiums in Mitte during H1 2016 of €4,300 per sqm (Source: Jones Lang LaSalle).

The condominium sale progress at Boxhagenerstrasse is well ahead of the company's expectations at the time of the acquisition. The property was fully occupied at acquisition and the privatisation potential was viewed as a medium-term objective but the company has successfully commenced the condominium programme within a year of the deal completion.

Phoenix Spree is currently trading on a 3.5% premium to the June 2016 EPRA NAV which compares to an average 18% premium for the larger German listed residential companies. We believe the Berlin residential market offers one of the most compelling long-term investment propositions due to structural rental growth in combination with downside protection provided by current values (versus replacement cost).

[cerrito] 12/10/2016 21:24

Yes Jonwig there is a difference between the tone of the FT article and what PSDL say and even more the very upbeat comments of TPF.
Interested to read
quote
Berlin has also introduced a “rental brake”, under which the rent set out in a contract with a new tenant cannot exceed the local average by more than 10 per cent.
unquote
and obviously PSDL think this is not worth the paper it is written on as they tell us of their huge rent increases-perhaps different rules apply in different parts of Berlin.
I do note the £sp has not followed the Euro up in the last few days.
I am neither buying or selling at these prices

[jonwig] 10/10/2016 15:38

The downside for Berlin property?

[davebowler] 22/9/2016 14:04

Liberum ups target price;
K | Alternatives | Real Estate Funds | PSDL LN | Market Cap £208m | 22 September 2016^

Phoenix Spree Deutschland*
Capturing reversionary upside
BUY
Target price 254p | Publication price 225p | *Corporate Client of Liberum

Phoenix Spree generated a 7.8% NAV total return in H1 2016. Rental growth in Berlin is ahead of the level achieved by larger peers with a 37% premium to passing rents achieved on new lettings. Reversionary upside and favourable market dynamics provide confidence over the long-term rental growth outlook. Buoyant investment demand also points to further yield compression. We are upgrading our TP by 21% to 254p. BUY

7.8% H1 NAV TR

7.8% NAV total return in H1 (13.1% since June 2015) due to estimated 7.7% l-f-l portfolio valuation gain (driven by yield shift, rental growth and asset management gains).

Condominium progress

Condominium sales are progressing. Average sales price of €3,662 per sqm is 70% above avg Berlin portfolio value. Additional schemes are being brought forward for 2017.

Strong rental growth

Annualised l-f-l rental growth of 5.7%. Berlin rental growth (+7.6%) is 2-3% ahead of the uplift achieved by peers and the growth in market asking rents since June 2015.

21% rise in TP to 254p

We are increasing our TP by 21% to 254p (Old: 210p) to reflect FX movements and NAV performance. We forecast an average 11.3% NAV TR over the three years to 2018.

[luckymouse] 22/9/2016 10:58

fuzzy but v firm

[davebowler] 22/9/2016 09:13

Liberum;
Phoenix Spree Deutschland (BUY)
Interims: 7.8% H1 NAV total return

Event
Phoenix Spree delivered a NAV total return of 7.8% in H1 2016 with the EPRA NAV at 30 June 2016 of €2.42. We calculate a NAV total return of 13.1% over the 12-month period from June 2015.

The portfolio valuation at 30 June 2016 was €329.8m which reflects an increase of 16.7% over the half year. After adjusting for acquisitions and disposals, the increase was 9.8% (FY2015: 10.6%) with the Berlin assets rising 13.7%. We estimate a like-for-like revaluation gain of 7.7% for the half year (FY2015: 8.3%) after making further adjustments for capex.


Like-for-like rental growth of 5.7% across the portfolio over the past 12 months is largely due to the highly reversionary nature of the portfolio. New lettings achieved an average of €9.4 per sqm (5.4% above H1 2015). New leases in Berlin were signed at an average premium of 37% to prior passing rents which resulted in a 7.6% like-for-like increase in the average rent per sqm.


The balance sheet remains in a strong position with a net LTV of 30.8% at 30 June 2016 (December 2015: 42.8%). We expect this to increase in the short-term as available cash is deployed in new acquisitions (€34m of notarised acquisitions).

A dividend of 1.6p (1.92 cents) has been declared for H1 2016 which represents a 23% increase on the same period in H1 2015.

Liberum view
This is an excellent set of interims from Phoenix Spree with NAV performance 2.5% ahead of the run-rate implied by our forecasts. All of the key drivers of value creation (rental growth, yield shift and asset management initiatives) contributed to the revaluation uplift in the period. Rental growth in Berlin was particularly strong over the past 12 months with record rents being achieved and the Berlin portfolio has outperformed the market by c.2%.

Phoenix Spree is currently trading on a 3.4% premium to the June 2016 EPRA NAV which compares to an average 30% premium for the larger German listed residential companies. We believe the Berlin residential market offers one of the most compelling long-term investment propositions due to structural rental growth in combination with downside protection provided by current values (versus replacement cost). Maintain BUY.

[jonwig] 22/9/2016 06:16

Interim results:



EPRA NAV about 208p at current exchange rate. Big rise in H1 dividend.

[badtime] 12/9/2016 20:18

Ta for reply

[davebowler] 12/9/2016 10:15

None so far as I know.Maybe market size?

[badtime] 08/9/2016 16:16

DBAny problems buying online? Tried via Youinvest but no joy..didn't have time to telephone them

[davebowler] 05/9/2016 17:19

LiberumBUY)M&A activity highlights ongoing demand for German residential assets EventVonovia has announced a takeover offer for Conwert Immobilien at an implied price of €17.58 per share which represents a 12.3% premium to the June 2016 EPRA NAV. The planned takeover will allow Vonovia to expand into Berlin (34% of Conwert's portfolio) and other key regions such as Leipzig and Vienna. Liberum viewThe proposed acquisition of Conwert Immobilien is the latest in a string of takeovers in the listed German residential sector which demonstrates the weight of investment demand for German residential assets, particularly in cities such as Berlin (where Phoenix Spree's portfolio is concentrated). The listed German residential sector is trading on an average 38% premium to NAV compared to a 2% premium for Phoenix Spree Deutschland. We believe the Berlin residential market offers one of the most compelling long-term investment propositions in combination with downside protection provided by current values (versus replacement cost).

[jonwig] 05/9/2016 16:39

M&A activity and general outlook in German apartments:

[davebowler] 17/8/2016 17:56

Liberum;
BUY
Target price U/R | Published price 198p | *Corporate Client of Liberum

PSDL's portfolio valuation rose by 9.8% in H1 2016 to 30 June 2016 with the Berlin assets experiencing a 13.7% uplift for the period. We calculate a like-for-like revaluation uplift of 8.8% for the portfolio after adjusting for capex. We estimate a 7.2% NAV total return in H1 2016 which is ahead of the run-rate implied by our 10% full year forecast. The long-term capital growth outlook for Berlin residential property is supported by structural drivers in both the rental and investment markets. At the current 5% discount to NAV, we believe the shares offer considerable value. BUY

Berlin assets driving portfolio growth

Phoenix Spree Deutschland's portfolio valuation at 30 June 2016 was €329.8m which reflects an increase of 16.7% over the half year. After adjusting for acquisitions and disposals, the increase was 9.8% (FY2015: 10.6%) with the Berlin assets rising 13.7%. We estimate a like-for-like revaluation gain of 8.8% for the half year (FY2015: 8.3%) after making further adjustments for capex.


The portfolio performance has been driven by a combination of factors. Strong investment demand has been amplified by the low interest rate environment which has led to further yield tightening. The structural growth story in the occupational market continues with constrained housing supply well below demand levels leading to large rental uplifts on re-letting and reversionary upside.

The portfolio value per sqm is now €1,755 which compares to €1,635 at 31 December 2015 and the 8.6% increase over the period was slightly ahead of the 7% increase on Deutsche Wohnen's Berlin assets (announced last week).

Estimated 7.2% H1 NAV total return

We estimate a portfolio revaluation surplus of c.€25m in H1 2016 and an EPRA NAV of €2.41 per share (208p based on current FX rate) at 30 June 2016. This equates to a NAV total return of 7.2% for H1 2016 (FY2015: 12%) which is on track to surpass our 10.2% forecast for the full year. The excess return has also been achieved despite the impact of property acquisition costs and a lower gearing level than targeted (c.30% net LTV vs. 50% target).


Valuation

Phoenix Spree is currently trading on a -5.2% discount to our June 2016 EPRA NAV estimate which is significantly wider than its closest peer (Taliesin Property Fund 4.3% premium to June NAV) and the average for the larger German listed residential companies (37% premium to NAV). The current share rating is giving no credit for the latent capital growth in the portfolio and the manager's track record of realising this upside.

We believe the Berlin residential market offers one of the most compelling long-term investment propositions in combination with downside protection provided by current values (versus replacement cost). We maintain our BUY rating and we are placing our 210p TP under review (until the publication of the upcoming interim results) following the portfolio outperformance in H1 2016 and recent beneficial FX movements.

[jonwig] 17/8/2016 06:08

Property portfolio valuation.

Lots of asset changes (out, in) but -

On a like-for-like basis, after adjusting for the impact of acquisitions net of disposals, the Portfolio valuation increased by 9.8% per cent in the six months ended 30th June 2016.

Annualised 20.6%.

[davebowler] 12/8/2016 08:35

Liberum;
Positive read-across from Taliesin and Deutsche Wohnen

Event
Taliesin Property Fund and Deutsche Wohnen have both released positive results for the period to June 2016. As a reminder, Taliesin is Phoenix Spree's closest peer and Deutsche Wohnen is a €10bn market cap German residential property company with 73% of its assets in Berlin.

Taliesin's EPRA NAV rose 11.7% to €34.73 per share following a 9.5% increase in its portfolio value in H1 2016 after adjusting for disposals in the period. The portfolio value at 30 June 2016 was €289.2m with an average value per sqm of €2,440 (December 2015: €2,240 per sqm).

Highlights of Deutsche Wohnen's interim results included a 9% increase in EPRA NAV. Other key takeaways include:

The company's Berlin assets rose by 7% on a price per sqm basis to €1,457. The Berlin portfolio is now valued at a 20.3x multiple of in-place rents (4.9% yield) which represents a c.30bps yield shift over the half-year (December 2015: 19.2x or 5.2% yield).
The current value per sqm of the portfolio represents only c.50% of replacement costs which are steadily rising. At current levels of construction cost, the only profitable new developments are in the higher end of the market and for privatisation.
Like-for like rental growth of 4.6% for the Berlin assets in the 12 months to June 2016 which is the best-performing region in the portfolio. Significant upside potential remains with market rents 23% above in-place rents.
Shortage of residential supply expected to continue until shortfall of 170,000 units expected until 2020.
Liberum view
Taliesin and Deutsche Wohnen have reported strong results for H1 2016 with both companies reporting the continuation of a number of positive trends which have been driving the Berlin residential market. Berlin's economy continues to perform well with employment rising by a further 2.7% (double the overall rate in Germany). The majority of portfolios offer huge reversionary potential following a significant increase in market rents as a result of constrained housing supply which is running well below demand levels

We expect Phoenix Spree will also report strong numbers for the period to June 2016 given the quality of its portfolio and there is potential for the company to materially outperform our 10% NAV total return forecast for FY2016. The average carrying value of Phoenix Spree's portfolio at December 2015 was €1,979 per sqm (12% below Taliesin's equivalent figure for the period). We believe Taliesin has reflected more of the portfolio privatisation potential in its valuation than Phoenix Spree.

We believe the Berlin residential market offers one of the most compelling long-term investment propositions in combination with downside protection provided by current values (versus replacement cost). If we conservatively assume a 5% NAV growth rate for Phoenix Spree in H1 2016, the shares would trade on a 4.5% discount to NAV compared to a 1% discount for Taliesin and a 40% premium for the larger German-listed residential companies.