TIDMPSDL
RNS Number : 6598K
Phoenix Spree Deutschland Limited
06 January 2021
06 January 2021
Phoenix Spree Deutschland Limited
("PSD" or the "Company")
Business Update
Phoenix Spree Deutschland Limited (LSE: PSDL.LN), the UK listed
investment company specialising in German residential real estate,
announces a further debt refinancing, together with an update on
condominiums, share buybacks and equity research coverage.
Condominium notarisations at a 20% per cent premium to book
value
Since the financial half year ended 30 June 2020, a further 30
condominium units were notarised for sale, with an aggregate value
of EUR10.5 million. Condominium pricing has remained strong, with
the average achieved residential value per sqm at EUR4,276,
representing an average 20.2% premium to the book value of each
property.
The Company is additionally guaranteed EUR1.2m of condominium
revenues in relation to the current financial year through its
agreement with Accentro Real Estate AG for 3 remaining unsold units
at its Boxhagenerstrasse condominium project.
These sales represent a significant increase compared with the
first half of the current financial year, during which 8
residential units and two attic spaces were notarised for sale,
with an aggregate value of EUR3.0 million. In total the Company
have notarised for sale EUR14.6m during the year to 31 December
2020, a 65% increase versus the prior year.
As at 31 December, 70% of the Berlin portfolio has been legally
split into condominiums, providing opportunities for the
implementation of further projects where appropriate. A further 17%
are in application, over half of which are in the final stages of
the process.
Continuation of share buybacks at a discount to NAV
PSD has authority to buy back up to 10% of its ordinary share
capital. Share buybacks were resumed following the release of the
Company's interim results on 15 September 2020, by which time it
had become clear that the financial impact of the COVID-19 pandemic
has been limited, with rent collection in the six months to 30 June
2020 broadly in line with the six months to 30 June 2019.
As at 5 January 2021, the Company had bought back 4,733,500
ordinary shares, representing 4.7% of the ordinary share capital,
for a total consideration of GBP15.2m. The average price paid
represents a 30% discount to EPRA net asset value per share as at
30 June 2020.
Debt refinancing
The Company is pleased to announce the refinancing of a EUR21.4m
of existing loans. The new facility, agreed with Natixis
Pfandbriefbank AG, is on more flexible terms, releases a further
EUR8.1m of cash and has a maturity profile in line with the debt
retired and the Company's existing debt facilities.
The new debt is non-amortising, whereas the debt it replaces
incurred an amortisation cost of 1.5% per annum. Additionally, it
allows the sale of assets as condominiums, offering more
flexibility than the previous debt provider terms.
Initiation of coverage by Edison Investment Research
As previously announced, Edison, the equity research company,
has initiated coverage on the Company.
Edison has been engaged to produce regular, in-depth research on
PSD. The intention is to raise the visibility of the Company and
enable investors to develop an improved understanding of the
business. Edison's research is read on a free-to-access basis by
individuals and institutions across the globe. A full copy of the
research is available on the Company's website.
Berlin rent controls ("The Mietendeckel")
The Company and its legal advisors remain firmly of the view
that the Berlin rent-cap is unconstitutional and it is anticipated
that the Federal Court will reach a final decision on its legality
in the first half of 2021.
Pending clarification of the legality of Mietendeckel rules, the
Company continues to explore all options within the existing
portfolio to optimise strategic flexibility. This includes
condominium sales at a premium to book value, share buybacks at a
discount to EPRA net asset value, careful monitoring of capex
projects and new tenant contracts which allow the retrospective
collection of market rents in the event that the Mietendeckel is
ruled to be unlawful.
2020 Portfolio valuation
The Company intends to publish its 2020 portfolio valuation in
early February 2021.
Robert Hingley, Chairman of Phoenix Spree Deutschland,
commented:
"Our ability to sell condominiums at a premium to book value
underpins the strategic optionality and value within the portfolio
and I am pleased that we have been able to accelerate these sales.
This, combined with our ability to access funding on attractive
terms, allows us to continue to deliver value to shareholders and
buy back shares at a significant discount to Net Asset Value,
pending a final legal ruling on the Berlin rent-cap expected in
2021."
For further information, please contact:
Phoenix Spree Deutschland Limited
Stuart Young +44 (0)20 3937 8760
Numis Securities Limited (Corporate Broker)
David Benda +44 (0)20 3100 2222
Tulchan Communications (Financial PR)
Elizabeth Snow
Oliver Norgate +44 (0)20 7353 4200
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