Phoenix Spree Deutschland (LSE: PSDL.LN), the UK listed investment company specialising in Berlin residential real estate, today announces its full year results for the year ended 31 December 2017.  Highlights below. For a full copy of the RNS announcement please click HERE or visit the PSD website HERE.

ANOTHER YEAR OF STRONG PERFORMANCE – OUTLOOK REMAINS POSITIVE

Financial Highlights

  • EPRA NAV per share grew by 50.5% to €4.11 (£3.65) at 31 December 2017 (31 December 2016: €2.73 (£2.33)).
  • EPRA total return per share of 53.0% for the year (2016: 22.5%).
  • IFRS NAV per share grew by 56.5% to €3.96 (£3.52) at 31 December 2017 (31 December 2016: €2.53 (£2.16)).
  • Gross rental income up 13.5% year-on-year to €18.1 million (2016: €15.9m).
  • Profit before tax up 183.3% to €138.5 million (2016: €48.9 million).
  • Net loan to value of 32.0% at 31 December 2017 (31 December 2016: 39.4%). All of the Group’s debt has been refinanced within previous 18 months.
  • New debt of €57.8 million signed during 2017. Average debt maturity now exceeds eight years. Average interest rate 2.1%.
  • Final dividend per share of €5.0 cents (GBP: 4.4p), giving a total dividend per share of €7.3 cents (GBP: 6.4p) for 2017 (2016: €6.3 cents (GBP: 5.3p)).

Operational Highlights

  • Portfolio value increased by 43.8% to €609.3 million (31 December 2016: €423.8 million), 40.1% on a like-for-like basis.
  • Berlin posted largest like-for-like valuation increase at 41.8%.
  • Rent per sqm increased by 4.2% to €8.0 (31 December 2016: €7.6), 6.9% on a like-for-like basis.
  • Berlin like-for-like rent per sqm increased by 8.4% to €8.4 (31 December 2016: €7.7).
  • Rent on new lettings of €10.3 per sqm, a 7.9% increase over 2016.
  • €6.7 million invested in renovations and modernisations across the entire Portfolio during 2017, representing over one third of rental income.
  • EPRA Vacancy remains low at 2.9% (31 December 2016 2.6%).
  • Condominium sale completion proceeds up 191.8% to €9.5m with an average value per sqm of €3,868, a 20.1% premium to Berlin Portfolio average value per sqm as at 31 December 2017.
  • Portfolio now purely focussed on the attractive Berlin market
  • Targeted acquisition and disposal strategy during 2017 has created a pure-play Berlin portfolio with potential for greater economies of scale and strategic benefits.
  • Disposal of Central and Northern Germany portfolio notarised in December 2017 for €73.0 million, a 26% premium to the Jones Lang LaSalle valuation as at 30 June 2017.
  • Sale of other non-Berlin assets during 2017, for combined proceeds of €48.3 million. All disposals at a significant premium to last reported book value.
  • Contracts to acquire 366 units notarised during 2017, representing an aggregate purchase price of €55.9 million and an average price per sqm of €2,224.
  • As at 20 April 2018, contracts to acquire a further 160 units in Berlin have been notarised since 31 December 2017 year end for an aggregate value of €24.8 million, representing an average price per sqm of €2,348.

Outlook

  • Berlin residential demographics remain favourable, driven by strong population growth, job creation and the ongoing process of urbanisation.
  • Berlin residential property prices should continue to benefit from a lack of supply and growing demand from both owner-occupiers and investors.
  • High embedded value within portfolio: Berlin new leases signed at 40.1% premium to in-place rents during 2017, and 45.7% in the fourth quarter of 2017.
  • Strong balance sheet, locking in long-term fixed rate debt at low interest rates, creates scope for further selective acquisitions.
  • Due to careful selection, acquisition prices remain below value of in-place housing stock within the Portfolio and cost of new build construction.
  • Further new condominium projects and sales are planned for the year ahead.

 

Robert Hingley, Chairman of Phoenix Spree Deutschland commented:

“I am delighted with the Company’s performance and continued growth, our strongest year yet. Since listing in 2015, we have successfully delivered against our strategy of investing in and growing the portfolio, and realising the value from within it, resulting in a total return to shareholders of 106%. This year, we have made significant progress in focusing and growing the portfolio in Berlin, where we have an attractive pipeline of opportunities and where the market outlook remains positive, given the ongoing undersupply of rental property.  With the portfolio now purely Berlin focused, I am confident that our strategy of managing the portfolio for growth, investing in the quality of our properties and selective acquisitions will continue to deliver further returns for our shareholders.”

For further information please contact:

Phoenix Spree Deutschland
Stuart Young
+44 (0)20 3937 8760

Liberum Capital Limited (Corporate Broker)
Richard Crawley
Christopher Britton
+44 (0)20 3100 2222

Tulchan Communications (Financial PR)
Tom Murray
Elizabeth Snow