Press and Media

27 April 17

Phoenix Spree Deutschland: Final results for the twelve months ended 31st December 2016

2016 was the first full financial year since Phoenix Spree Deutschland successfully listed on the Main Market of the London Stock Exchange. The Group capitalised on the platform that this provided by issuing new equity, raising £38 million (before costs) in March 2016. The Group has been actively deploying the proceeds on selective acquisitions to grow its Portfolio of residential properties in Berlin, where the Board sees the most potential for future market rental growth and yield compression in the years ahead.

STRONG FINANCIAL PERFORMANCE

• Pre-exceptional profit before tax up 148% to €48.9 million (31 December 2015: €19.7 million)
• Portfolio value increased by 49.5% to €423.8 million during the year (31 December 2015: €283.6 million), or 19.4% on a like-for-like basis
• EPRA NAV per share grew by 19.7% to €2.73 (£2.33) (31 December 2015: €2.28 (£1.67).
• EPRA total return per share of 22.5%, (31 December 2015: 17.5%)
• Strong letting performance, as rent per sqm increased by 1.4% to €7.6 (31 December 2015: €7.5) and 5.3% on a like-for-like basis
• Rent on new lettings of €9.6 per sqm, a 7.8% increase over 2015, and a new Group record.
• EPRA Vacancy reaches all-time low of 2.6% (31 December 2015 3.9%)
• Final dividend per share of €4.3 cents (GBP: 3.7p), giving a total dividend per share of €6.3 cents (GBP: 5.3p) for the financial year 2016 (2015: €5.8 cents (GBP: 4.2 p))

CONTINUED MOMENTUM IN SCALE AND QUALITY OF PORTFOLIO

• Share placing proceeds used to fund attractive pipeline of acquisition opportunities: Notarisation of 10 Berlin property packages during the year, for an aggregate consideration of €78.3 million. These are expected to increase the Group’s rental income by c.17.5%
• Active Portfolio management: Disposal of non-core properties during the year for aggregate consideration of €3.8 million
• Significant non-core disposal post year-end: 17 properties located in Nuremberg and Fürth notarised for €35.25m, an 11% premium to the 31 December 2016 book value, increasing the pro-forma Berlin exposure to 81.9% of the Group’s Portfolio by value
• Substantial premium achieved on condominium sales: Third project, in Boxhagenerstrasse, commenced in Q4 2016, achieved an average value per sqm of €4,110, a 59.0% premium to the 2015 acquisition price of €2,585 per sqm
• Active balance sheet management: New debt of €101.4 million signed during H2 2016. Overall average debt maturity now exceeds six years and average interest rate has been reduced to 2.0%. During past 24 months, over 90% of Fund’s debt has been refinanced

OUTLOOK

• Outlook for the German residential market, particularly Berlin, remains positive with further scope for rental growth and yield compression
• Rising demand for property expected to continue, driven by population growth, job creation and the ongoing process of urbanisation
• Supply of Berlin rental housing expected to remain constrained by lack of land for development, limited number of building permits and high cost of construction relative to in-place housing stock
• Strong reversionary rental potential embedded within Portfolio; Berlin new leases signed at 35.6% premium to in place rents
• Further new condominium projects and sales are planned for the year ahead
• Group continues to see attractive pipeline of acquisitions that meet its strict return criteria, and expects to deploy further capital during the remainder of 2017

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