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 2017.

Financial highlights

  • Gross rental income up 25% year-on-year to €9.5m, (H1 2016 €7.6m)
  • Profit before tax up 303% year-on-year to €63.1m, (H1 2016 €15.7m)
  • EPRA NAV per share up 22.3% in H1 2017 to €3.34 per share (31 December 2016: €2.73) EPRA NAV per share total return in H1 2017 of 23.7% (six months to 30 June 2016: 7.8%)
  • Net loan to value of 31.6% at 30 June 2017 (31 December 2016: 39.4%)
  • Increased first half dividend to €2.28cents (GBP 2.0p), up 25% year-on-year (H1 2016: €1.92cents (1.6p))

Operational highlights

  • Portfolio value increased by 22.6% in H1 2017 to €519.7 million. (31 December 2016: €423.8 million), and by 15.6% on a like-for-like basis.
  • Berlin posted largest like-for-like increase at 18.2%
  • Strong annual like-for-like rent per sqm growth of 5.0% (30 June 2016 5.7%)
  • Significant embedded value within the portfolio: Berlin new leases signed at a 44% premium to passing rents
  • First half condominium sales achieve an average value per sqm of €3,687, a 59.8% premium to portfolio average value per sqm at 30 June 2017
  • Five property acquisitions in Berlin completed for €27.7m in H1 2017, with a further two notarised in H1 and due to complete in H2 2017 with a value of €11.6m
  • Nuremberg and Fürth portfolio disposed for €35.2m on 1 July 2017, an 11% premium to its book value as at 31 December 2016
  • Berlin represented 78.2% of PSDL portfolio by value as at 30 June 2017, and 84.2%* on a pro-forma basis

*following completion of Nuremberg and Fürth disposal, and the completion of Berlin assets notorised in the first half of 2017, but not completed at30 June 2017

Outlook

  • Berlin property market outlook remains favourable, underpinned by strong demand for apartments, lack of supply and low interest rates
  • Significant further potential to create value through reversionary letting and condominium sales
  • Scope for further growth in property values, particularly in central Berlin
  • Strong balance sheet locking in long-term fixed rate debt at low interest rates
  • The Company is on track to deliver a strong financial performance for the full year 2017

Robert Hingley, Chairman of Phoenix Spree Deutschland, commented:

“I am delighted to announce another strong set of results following an active start to the year in which the Company has delivered strong rental growth and enhanced its portfolio in Berlin where the outlook remains particularly positive. The Portfolio has seen another significant valuation uplift, driven by the positive market backdrop and our active asset management strategy, resulting in an EPRA NAV per share total return of 23.7% for the six months. Nothwithstanding the significant rises in property values to date, and corresponding rental yield compression, Management continues to see significant embedded value within the Portfolio, with further reversionary rental potential and opportunities to create value through the sale of apartment blocks as condominiums. The Company has also strengthened its balance sheet, bolstered by non-core disposals, leaving it well placed to continue to grow the Portfolio.”

For further information please contact:

Phoenix Spree Deutschland
Stuart Young                                                                         +44 (0)20 3937 8777

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

Tulchan Communications (Financial PR) 
Tom Murray                                                                          +44 (0)20 7353 4200