30 April 25

Phoenix Spree Deutschland Limited: Financial Results for the year ended 31 December 2024

Phoenix Spree Deutschland Limited (LSE: PSDL.LN), the UK listed investment company specialising in Berlin residential real estate, announces its full year audited results for the financial year ended 31 December 2024. The Board also provides a further update on the Company’s strategy to significantly accelerate condominium sales and reduce debt.

HIGHLIGHTS OF THE YEAR

Financial and operational Summary

1             – EPRA metrics defined and calculated in note 27.

2             – Calculated at FX rate GBP/EUR 1.2097 as 31 December 2024 (2023: GBP/EUR 1:1.153)

3              – Net LTV uses nominal loan balances (note 22) rather than the loan balances on the Consolidated Statement of Financial Position which include Capitalised Finance Arrangement Fees.

4             – Like-for-like excludes the impact of disposals in the period.

Strategic repositioning

·    Completion of €75.9m sale of a 385-unit portfolio comprising 16 properties to funds managed by Partners Group in December 2024.

·    Debt terms amended, increasing permitted condominium sales assets from 6 to 40 properties.

·    Reduction in net debt during the financial year by €89.9 million, lowering net LTV from 46.3% to 40.3%, with a further reduction expected, driven by condominium sales.

·    Resolutions to continue the Company and amend its Investment Objective and Policy passed at EGM on 12 March 2025.

·    Accelerated condominium sales programme underway, with stock available for sale expected to rise from 108 units in December 2024 to 942 units by Q3 2025.

Portfolio valuation increase

·    Condominium values have remained resilient, and Private Rented Sector (“PRS”) valuations have stabilised, though at significantly lower levels than the 2022 peak.

·    On a like-for-like basis (adjusted for disposals), the Portfolio value rose 0.8% in 2024 and 3.2% in H2 2024.

·    Condominium Portfolio value grew 9.0%, driven by PRS properties redesignated under the accelerated condominium sales strategy.

·    PRS Portfolio value fell 6.3% on a like-for-like basis, but the 2.8% decline in the second half of the year was the smallest since the real estate downturn began in 2022.

Condominium sales accelerating

·    2024 condominium notarisations increased by 31% versus 2023, reaching €9.4 million, with vacant units sold at an average of €5,027, a 39.3% premium to the 2023 Portfolio per sqm valuation.

·    2025 performance to date:

o  34 units notarised for €9.3 million, a 169% increase versus the same period in 2024, at an average price per sqm of €3,999.

o  Further reservations pending notarisation for 10 units worth €3.4 million.

o  Vacant units sold at €4,738 per sqm, a 30.5% premium to the Portfolio’s 31 December 2024 valuation; occupied units sold at €3,608 per sqm, a 0.6% discount.

Rental market remains resilient

·    Reversionary reletting premium remains high, reflecting ongoing shortage of Berlin rental supply.

·    New residential leases during the year signed at an average premium of 31% to passing rents, or

€13.9 per sqm, a record high.

·    Like for like rent per sqm growth slowed to 1.6%, reflecting a lower level of reletting.

·    EPRA vacancy of 1.5% (2023: 2.0%), a record low. Residential unit churn increased to 8.7% (2023: 6.6%).

Outlook

·    Following the continuation vote, the Company is advancing with a managed portfolio realisation programme, primarily aimed at accelerating condominium sales.

·    The Company remains optimistic in achieving its target annualised condominium sales rate of €50 million by the end of 2025.

·    Sales prices for condominiums in Berlin per sqm are expected to remain significantly higher than the equivalent values of PRS properties.

·    Discussions in relation to the refinancing of debt maturing in Q3 2026 are currently underway, and aim to increase the number of condominium sales projects that can be made available for sale at any time and enhance flexibility for capital returns to shareholders.

·    Conditions in the investment market for PRS properties have shown recent signs of improvement. However, the current US administration’s imposition of higher trade tariffs has the potential to impact investor sentiment and real estate asset demand.

        Robert Hingley, Chairman of Phoenix Spree Deutschland, commented:

“I am pleased to announce that our Portfolio has reached a turning point, achieving its first like-for-like valuation increase since the broader German residential market downturn began in 2022.

The significant divergence in price per square meter between condominiums and PRS properties that has been observed in the Berlin residential market in recent years is expected to continue, and it is against this backdrop that the Company plans to materially accelerate condominium sales in 2025 and beyond. The company remains on track to deliver on its 2025 condominium sales targets.

The Company’s strategic outlook has been further improved by recent enhancements to its balance sheet. Asset disposals completed in December 2024 have already contributed to a considerable debt reduction, with ongoing condominium sales expected to drive further deleveraging. Additionally, refinancing discussions are underway with the aims of improving operational and financial flexibility, further enhancing the Company’s capacity for future condominium sales and expediting capital returns to shareholders.

Annual Report and Accounts

The full Annual Report and Accounts will shortly be available to download from the Company’s webpage www.phoenixspree.com. All page references in this announcement refer to page numbers in the Annual Report and Accounts. The Company will submit its Annual Report and Accounts to the National Storage Mechanism in the required format in due course, and it will be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

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