16 September 20

Phoenix Spree Deutschland: Interim results for the half year ended 30 June 2020

Phoenix Spree Deutschland (LSE: PSDL.LN), the UK listed investment company specialising in German residential real estate, announces its Interim Results for the six months ended 30 June 2020.

Financial summary

Six months to June 2020Six months toJune 201912 months to December 2019
Gross rental income (€m)112.010.822.6
Profit before tax (€m)15.312.028.6
Dividend (€ cents (£ pence))2.35 (2.1)2.35 (2.1)7.50 (6.3)
Portfolio valuation (€m)746.7665.2730.2
EPRA NAV per share (€)5.064.734.92
EPRA NAV per share (£)24.604.244.16
EPRA NAV per share total return (€%)
Net LTV (%)333.026.832.6
Portfolio valuation per sqm (€)3,8393,7163,741
Annual like-for-like rent per sqm growth (%)
EPRA Vacancy (%)
Condominium sales notarised (€m)

1 –  Rental income is disclosed under IAS 18, and does not include any rents above what is allowed under the Mietendeckel.

2 – GBP:EUR FX rate 1:1.1009

3 – Net LTV uses nominal loan balances as per note 17 rather than the loan balances on the Consolidated Statement of Financial Position which consider Capitalised Finance Arrangement Fees in the balance.

Financial and operational highlights

  • EPRA NAV per share up 2.8% in H1 2020 to €5.06, and 10.6% in £ sterling.
  • Like-for-like Portfolio value, adjusted for acquisitions and disposals, increased by 2.6% in H1 2020.
  • Increased average rental income per sqm of 1.8% reflecting the impact of the Mietendeckel.
  • Underlying EPRA vacancy of 4.3%, reflecting delay to new lettings as a result of COVID-19.
  • Condominium sales during H1 2020 delayed by COVID-19, with notarisations worth €3.0 million.
    • Average achieved value per sqm of €4,392 for residential units, a 15.7% premium to book value and 14.4% to the portfolio average value per sqm as at 30 June 2020.
    • 66% of Portfolio assets legally split into condominiums, up from 58% as at 30 March 2020. Applications representing a further 19% of the portfolio are underway, over half of which are in the final stages of the process.
  • Successful refinancing in May 2020 of €16.4 million of debt assumed in connection with the December 2019 Brandenburg acquisition, on improved and extended terms.
  • Unchanged interim dividend and resumption of share buy-back programme.

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

  • Limited impact on rent collection from COVID-19, in excess of 99% in H1.
  • Berlin Mietendeckel currently being challenged in the Federal and State courts.
  • Bavarian Constitutional Court ruled against six-year rent freeze, stating proposals incompatible with Federal law, lending support to the Berlin Mietendeckel legal challenges.
  • PSD has adopted a dual contract rental structure with new tenants pending clarity on the legality of the Mietendeckel.


  • Long-term Berlin demographic trends expected to remain positive with decreased availability of rental stock.
  • Final phase of the Mietendeckel, due to come into force in November 2020, will materially impact collected rents in 2021 unless legal challenge is successful.
  • PSD retains strategic optionality in the likely event the Mietendeckel is found to be unconstitutional.
  • Acceleration of condominium revenues expected in the second half of 2020:
    • Since the financial half year end, condominiums worth a further €3.3 million notarised, with new reservations for notarisations showing a significant improvement.
    • Additional €4.5 million revenues guaranteed to December 2020 from Accentro AG agreement, with a further €4.5 million of revenues guaranteed in 2021.
  • Robust business model, a strong balance sheet and good levels of liquidity mean PSD remains well positioned to withstand any dislocations from COVID-19 and the Mietendeckel.

I am pleased to report another resilient performance for the first half of this year, despite the dual impact of COVID-19 and the Mietendeckel.  Our condominium potential continues to underpin our portfolio value and we are focused on maintaining our strategic optionality pending clarification of the legality of the Mietendeckel. I am confident that our strategies together with the strength of our balance sheet, mean we are well placed for the longer-term.

Robert Hingley