29 March 21

Phoenix Spree Deutschland: Financial results for the year ended 31 December 2020

Phoenix Spree Deutschland Limited (LSE: PSDL.LN), the UK listed investment company specialising in German residential real estate, announces its full year audited results for the financial year ended 31 December 2020. 

Financial Highlights

 Year to 31 December 2020Year to 31 December 2019 2020 v 2019% change 
Income Statement   
Gross rental income (ˆm)23.922.65.7
Profit before tax (ˆm)37.928.632.5
Dividend (ˆ cents (£ pence))17.50 (6.75)7.50 (6.30)
Balance Sheet   
Portfolio valuation (ˆm)768.3730.25.2
Like-for-like valuation growth (%)6.37.1
IFRS NAV per share (ˆ) 4.484.235.9
IFRS NAV per share (£)14.043.5812.8
EPRA NTA2 per share (ˆ cents) 5.284.927.3
EPRA NTA2 per share (£ pence) 4.764.1614.4
EPRA NTA2 per share total return (ˆ%)8.89.1– 
Net LTV3 (%)33.132.6– 
Operational Statistics   
Portfolio valuation per sqm (ˆ)3,9773,7416.3
Annual like-for-like rent per sqm growth (%)-15.85.6
EPRA vacancy (%)2.12.8
Condominium sales notarised (ˆm)14.68.865.4

1 – Calculated at FX rate GBP/EUR 1:1.11
2 – New EPRA Best Practice guidelines from October 2019 introduced three new measures of net asset value: EPRA net tangible assets (NTA), EPRA net reinvestment value (NRV) and EPRA net disposal value (NDV). EPRA NTA is calculated on the same basis as EPRA NAV; and is the most relevant measure for PSD and therefore now acts as the primary measure of net asset value. Further information can be found on page 16.
3 – Net LTV uses nominal loan balances as per note 23 rather than the loan balances on the Consolidated Statement of Financial Position which take into account Capitalised Finance Arrangement Fees in the balance.

EPRA NAV underpinned by significant condominium potential

  •  Record condominium notarisations of ˆ14.6 million (43 condominium units) during the year to 31 December 2020, a 65.4 per cent increase from ˆ8.8 million in the prior year.
  • Average achieved value per sqm of ˆ4,320 for residential units, a 19.2 per cent premium to book value of each property.
  • 70 per cent of Portfolio assets legally split into condominiums, up from 58 per cent as at 31 December 2019.
  • A further 15 per cent are in application, over half of which are in the final stages of the process.

Berlin rent controls (“Mietendeckel”) and COVID-19

  •  Collected rental income per sqm as at 31 December 2020 fell by 15.8 per cent, reflecting the implementation of the final phase of the Mietendeckel in November 2020.
  • Contracted rental income per sqm as at 31 December 2020 grew by 4.1 per cent year on year. The Company may have the right to collect the difference between rents at the contracted level and the rates set by the Mietendeckel in the event that the Mietendeckel is successfully challenged.
  • New tenant contracts which provide for the reversion to market rents in the event that the Mietendeckel is ruled to be unlawful.
  • Underlying EPRA vacancy of 2.1 per cent, a near record low, reflecting the limited impact of COVID-19 and the Mietendeckel on the supply of available rental property.
  • Final legal ruling by the Federal Constitutional Court on the Mietendeckel anticipated in H1 2021. The Company and its legal advisors remain of the view that the Berlin rent-cap is unconstitutional and will be removed.
  • Limited impact on rent collection from COVID-19. In excess of 99 per cent of rents collected during 2020, with the collection rate remaining consistent in 2021 to date.

Continued shareholder value and robust balance sheet

  • Successful refinancing of ˆ37.8 million releasing ˆ12.0 million of cash. Net LTV remains conservative at 33.1 per cent.
  • Unchanged annual dividend of 7.50 cents. Dividend increased or maintained since listing in June 2015.
  • Resumption of share buy-back programme in second half of 2020.
  • As at 26 March 2021, 1.5 per cent of the issued share capital had been repurchased since the resumption of the share buyback programme in September 2020 at an average 32 per cent discount to year-end 2020 EPRA NTA.


  • Long-term Berlin demographic trends expected to remain positive:
    • Decreased availability of rental stock, exacerbated by the Mietendeckel, continues to support market rents;
    • Condominium pricing expected to remain strong, particularly for centrally located Berlin apartments.
  • Mietendeckel will continue to materially impact Collected Rents in 2021 compared to 2020 unless legal challenge is successful.
  • Pending clarification of the legality of Mietendeckel rules, the Company will continue to explore all options within the existing Portfolio to optimise strategic flexibility.
  • Two new condominium construction projects, representing a combined total of 34 units, are under construction, with expected completion in early 2022.
  • Condominium sales of ˆ2.9 million to 26 March 2021, a 240 per cent increase versus Q1 2020.
  • Robust business model, a strong balance sheet and good levels of liquidity mean PSD remains well positioned regardless of the outcome of the Mietendeckel constitutional review.

“I am pleased to report another resilient performance for the year. We have adapted our strategy to mitigate any short-term impact on the portfolio and maintained our strategic optionality as we await a successful challenge of the new Berlin rent controls. Further progress on condominium splitting, combined with an acceleration in condominium sales at a premium to book value, highlights the intrinsic value within the Portfolio. We remain confident in the longer-term demographics for Berlin residential rental market.”

Robert Hingley