Phoenix Spree Deutschland Share Discussion Threads

[jonwig] 27/4/2018 16:51

@ kenmitch - possibly you're right. Given the performance fee is contractual, I think a share award is better for all shareholders than a cash award - 'skin in the game', and the lock-in helps.

It's also woth remembering that PSDL is essentially PMM, with an independent board supervision.

It could be that the market just isn't willing to put a premium on the assets. GBP has dropped quite a bit against EUR today (1.15 to 1.137) which should help.

[kenmitch] 27/4/2018 16:28

Excellent results but very disappointing share price reaction to them. 50% NAV growth unlikely to be matched this year, but 30% would see NAV around £4.50 and assuming share price at least around NAV level, then with dividends 30% or so upside, and more if share at premium to NAV which with PSDL being THE best sector performer is quite likely.

So why the muted share price today? Could it be the huge performance fee satisfied by issuing 8 milliion new shares?

"Property Advisor

The Group has continued to benefit from the expertise of its property advisor, PMM Partners ("PMM"), which combines day-to-day asset management activities, capital structure management and a busy acquisition and disposal pipeline. During 2017, PMM has continued actively to manage the Portfolio, whilst simultaneously leveraging their local network and relationships to source and acquire an attractive pipeline of new Berlin properties, as well as completing the divestment of the remainder of the Company's non-core buildings, at a premium to book value.

On the basis of the Company's strong performance over the three year's ending 31 December 2017, and the impressive growth achieved in EPRA NAV over that period, resulting in a total shareholder return for the three-year period, after all fees, of 106.4%, a performance fee under the Property Advisory Agreement to the Property Advisor of circa €34.0 million has become due. The parties have agreed to settle the performance fee (but not any further performance fees that may become due) through the issuance by the Company to the Property Advisor of 8,260,065 new shares in the Company at EPRA NAV per share. 50% of the shares issued in settlement of this fee are subject to a 12-month restriction on disposal. Application will be made for the new shares, once issued, to be admitted to trading on the premium segment of the Official List and to trading on the Main Market of the London Stock Exchange with such admission expected to occur on or around 4 May 2018. The Board would like to thank all at PMM for their valued contribution, which is a key component of our ongoing success."

[davebowler] 27/4/2018 09:31

Liberum;
Phoenix Spree Deutschland (Mkt Cap £340m)

Stellar results in 2017

Event

Phoenix Spree Deutschland has generated a 53% NAV total return in 2017. EPRA NAV was €4.11 per share (357p based on current FX rates) at 31 December 2017 (31 December 2016:€2.73). NAV performance has been driven by a €157m revaluation gain over the period.

The like-for-like portfolio revaluation gain in the year was 40%, which was driven by yield shift and continued letting gains. The portfolio is now almost entirely focused on the high-growth Berlin residential market following a number of profitable disposals of non-core assets. The gross fully occupied yield on the portfolio is now 3.4% compared to 4.8% at December 2016.

The average rent per sqm has risen by 6.9% on a like-for-like basis across the portfolio and 8.4% in Berlin in the year. The average rent achieved on new lettings in 2017 was €10.3 per sqm which is 7.9% ahead of the prior year. New lettings in Berlin were signed at an average 40% premium to passing rents.

The company continues to acquire assets in Berlin at prices well below the current average value of €3,220 per sqm. A total of €81m of acquisitions have completed since the start of 2017 with an average acquisition price of c.€2,262 per sqm. The average price achieved on condominium sales (31 apartments) was €4,027 per sqm (25% ahead of current Berlin portfolio value).

Net LTV has fallen to 32.0% from 39.4% at December 2016 due to a the material revaluation gain. The company has taken advantage of the favourable lending market to refinance several facilities. The weighted average interest cost is now 2.1% and the average remaining term on the debt is 8.4 years.

Liberum view

2017 was a superb year for Phoenix Spree with an acceleration in both rental growth and yield shift. The level of yield shift is unlikely to be repeated but we believe future growth is underpinned by the high demand, inelastic supply and reversionary upside. Supply of new residential units remains well below the required level of 20,000 units p.a. Demand is supported by continued population growth and record low unemployment levels in Berlin.

Phoenix Spree trades on a 1.4% premium to the December 2017 NAV and a -10% discount to our 2018 NAV forecast. We believe the company will continue to deliver attractive double-digit NAV returns principally due to rental growth. Investment demand for the asset class remains high, as evidenced by recent M&A activity, which suggests there is further upside to come.

[podgyted] 27/4/2018 08:06

In sweet spot at moment - rising asset values and rents - falling interest rates.
Outlook is positive for it to continue - although I'd be surprised if last year was replicated next.
Yeah, should be at a more significant premium.

[jonwig] 27/4/2018 07:49

Duly arrived today:



NAV growth in line with Liberum's March estimate. Share price premium about 2%. A bit stingy!

[clausentum] 17/4/2018 09:35

Final results were on 27th April last year, we need some good news to improve the SP!

[davebowler] 20/3/2018 08:56

Liberum;
Phoenix Spree Deutschland (Mkt Cap £338m)

Positive read across from peer's rental growth forecasts

Event

Full year results for 2017 from ADO Properties, a large Berlin residential property company, have demonstrated strong returns in 2017 and highlighted a positive outlook for rental growth in 2018.

ADO Properties generated 25% EPRA NAV growth in 2017 driven by strong revaluation gains arising from rental growth and yield compression. Like-for-like rental growth in 2017 was 4.8% and the company has forecast 5% rental growth in 2018.

Liberum view

Favourable demographic trends point to ongoing robust rental growth in Berlin as evidenced by ADO's guidance of 5% p.a. going forward. Phoenix Spree's rental growth has typically outperformed the peer group due to the company's intense asset management approach.


We calculate a 50% NAV return for Phoenix Spree in 2017 driven by yield compression, rising rental growth and significant gains from asset management initiatives. The portfolio is now a pure play on the high-growth Berlin market following a number of profitable disposals in H2 2017. We believe further material upside is supported by the supply demand imbalance and recent M&A activity. The shares trade on a 3.3% premium to December 2017 NAV estimate or a -9.2% discount to our 2018 NAV forecast.

[jeff h] 02/2/2018 10:35

The valuation was worth waiting for!

[davebowler] 02/2/2018 09:07

Liberum;
Event

Phoenix Spree's portfolio value rose by 37.6% on a like-for-like basis in 2017. The implied NAV total return for the year is 50%. Both rental value growth and yield compression accelerated in the year, in addition to strong asset management gains. The portfolio is now a pure play on the high-growth Berlin market following a number of profitable disposals in H2. 2017 may be hard to repeat but we believe further material upside is supported by the supply demand imbalance and recent M&A activity. Trading on a 7% discount to our 2018 NAV forecast, we maintain our BUY rating.

[jonwig] 02/2/2018 08:01

Liberum new target price 430p. 2018 NAV est €4.05 (355p).

[belgraviaboy] 02/2/2018 07:49

Glad I topped up here with my TPF proceeds - great revaluation numbers

[jonwig] 02/2/2018 07:12

Property revaluation, quite striking on both a total and a LfL basis:

[jockthescot] 01/2/2018 14:30

2 page article in this week's Shares Mag...

[jeff h] 01/2/2018 11:26

What has happened to the 31 Dec year end NAV announcement due "the final week of January"?

[harrygas] 31/1/2018 21:48

After market makers keeping the price down for last few days after market closed the share rose more than 6% in the closing auction. Good news tomorrow will see price rise further.

[jonwig] 05/1/2018 09:24

PSDL is IC's Value Tip of the Year.

Unfortunately the article ("Buy at 325.5p") is riddled with typos, including one in the conclusion:

"In addition to its many attractions, Phoenix Spree Deutschland is also largely exempt from any unfavourable influences from Brexit. The shortage of accommodation in Berlin is unlikely to be resolved in the short term, and the explosive pace of new rent increases shows just how much hidden value may yet be realised. So-called condominium sales are also expected to continue as more people opt to buy rather than rent. In the four years to December 2019 [sic], NAV per share is forecast to rise by 53 per cent. We think the shares, albeit relatively illiquid and now trading at a premium to forecast NAV, still offer plenty of scope for upside. Buy."

[riverman77] 21/12/2017 21:38

There is a German listed company called Adler, which I only know about because it is (or at least was) held in British Empire trust. This invests in apartments across Germany (not just Berlin) and I believe was trading at a discount, hence their interest, although I don't know if it still is or have much further detail I'm afraid. Could be worth checking out though.

Turning back to PSDL, I note the share register seems to have some big institutional investors on board (woodford, invesco, etc) so hopefully they would be able to block a bargain sell off as happened with TPF.

[hiddendepths] 21/12/2017 16:07

If you find any, please post them on here dave!

[davebowler] 21/12/2017 15:58

I wonder if there are any other similar vehicles like this that own Berlin property and trading at a discount to NAV -German listed ones, maybe?

[davebowler] 21/12/2017 09:42

Liberum;
Event

Phoenix Spree Deutschland has exchanged contracts to sell a portfolio of 34 properties located in Central and Northern Germany for €73m. The properties were originally acquired in 2006/2007 for €38.7m and the sale price represents a 26% premium to the June 2017 valuation. Berlin will represent 99% of the portfolio by value following this disposal and other portfolio activity outlined below.

A further four properties located in Central & North Germany have been notarised for sale for €6.7m (11% above the June 2017 valuation). The sale proceeds will be used to reduce debt and fund further acquisitions and capex in the existing portfolio.

In terms of acquisitions, Phoenix Spree has notarised the purchase of 10 Berlin properties for an aggregate purchase price of €36.5m. The properties comprise 235 residential units and 7 commercial units, with an average purchase price per sqm of €2,358.

Liberum view

The disposal of the assets in Central and North Germany follows the divestment of the Nuremberg and Furth properties earlier in the year. Both disposals were completed well above book value (weighted average 25% premium for Central & North Germany and 11% premium for Nuremberg and Furth) and enabled the company to crystallise significant valuation improvement since acquisition.

The company is now almost entirely focused on the high-growth Berlin market where investment demand remains very strong, as evidenced by yesterday's takeover of Taliesin Property Fund. The outlook for long-term rental growth in the Berlin residential market is underpinned by market dynamics with demand well ahead of supply. Phoenix Spree Deutschland trades on a 19.4% premium to the June 2017 NAV and we expect strong performance in H2 2017 due to the strength of investment demand, rental growth following the Mietspiegel announcement in May 2017 and today's NAV accretive disposal (c.4% NAV uplift assuming 5% costs).

[hiddendepths] 21/12/2017 08:50

Just bought in to replace my Taliesin. Relieved the shares didn't move up this morning on that RNS! I guess they moved up yesterday and already trade at a significant premium to end June assets. But, as jonwig says, that NAV is clearly understated now.

I do like the Berlin market still. It will presumably move to a premium to other German cities - eventually! And yes, now Taliesin is gone, a bid is a significant possibility.

[jonwig] 21/12/2017 07:45

Disposal of non-Berlin properties at a 26% uplift (!) on 30 June valuation:



This alone justifies a significant premium to latest NAV, even without M&A speculation - which will probably increase now that we're wholly in Berlin.

[yieldsearch] 20/12/2017 21:46

Mietspiegel is the local reference rent table. Liberum i guess are making reference to a public rent table showing strong rental growht?

Since the 1 June 2015, individual administrative regions across Germany have had the right to implement a rent cap ('Mietpreisbremse') on the maximum rent that may be charged by landlords on new tenancies. The law allows landlords to charge either the rent paid by the previous tenant, or a rent of a maximum of 10% over the local rent reference tables ('Mietspiegel')

[cerrito] 20/12/2017 20:49

Does anyone understand the reference in the Liberum report to
Mietspiegel announcement in May 2017
I can see no reference in interims as at June 30 of PSDL/TPF
Thanks