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 2019

Financial & Operational Highlights

  • The Portfolio continued to perform well:
    • Aggregate Portfolio value increased by 13.1% to €730.2 million (31 December 2018: €645.7 million).
    • Like-for-like Portfolio value, adjusted for acquisitions and disposals, increased by 7.1%.
  • Robust like-for-like rental income growth per sqm of 5.6% during the year.
  • New leases signed at an average 36.4% premium to passing rents.
  • Underlying EPRA vacancy remains low at 2.8% (31 December 2018: 2.8%).
  • Contracts to acquire 286 units notarised during 2019, representing an aggregate purchase price of €49 million and an average cost per sqm of €2,706.
    • This includes an apartment complex in Brandenburg, an area within Greater Berlin that is unaffected by the Mietendeckel rent controls.
  • Completion in September 2019 of new €190 million term loan on improved interest rate terms provides additional liquidity. A further €50 million acquisition facility is available.
  • Potential scenarios associated with COVID-19 and the Mietendeckel have been rigorously stress tested.
  • Unchanged dividend of €5.15 cents per share (GBP 4.4 pence per share).
  • Share buy-backs at an average 22% discount to year-end 2019 EPRA Net Asset Value. As at 31 March 2020, 3.5% of the issued share capital had been repurchased. Buy-back programme suspended pending more clarity on the effects of COVID-19.

EPRA NAV underpinned by significant condominium potential

  • 18 Condominium sale notarisations during 2019 with total proceeds of €8.8 million (2018: €9.0 million).
  • Average achieved value per sqm on notarised residential condominium units of €4,711, a 25.9% premium to 2019 year-end Portfolio average value per sqm.
  • New agreement with Accentro Real Estate AG, provides scope to accelerate condominium sales.
  • 58% of Portfolio assets legally split into condominiums, and applications proceeding for a further 29%.

Timing, legality and implementation of new Berlin rent controls (“Mietendeckel”)

  • Came into force on 23 February 2020. Legislation to be reviewed by Berlin’s Regional Constitutional Court and the Federal Constitutional Court.
  • The Company has been advised that an injunction is likely to be sought. If obtained, it could create a moratorium on the implementation of the Mietendeckel, pending final ruling.
  • In the absence of an injunction being obtained, aggregate rental income for 2020 is not likely to be significantly adversely affected by the Mietendeckel compared with 2019.
  • Mietendeckel already impacting new construction, exacerbating shortage of available rental stock.
  • Potential future impact after 2020 is dependent on duration of, and eventual outcome of, legal challenge.
  • If the Mietendeckel continues throughout 2021, PSD estimates annual rental incomes could reduce by approximately 17%, which the Company would seek to mitigate by extending condominium sales.


  • The current COVID-19 pandemic presents a significant economic challenge to global economies:
    • PSD’s top priority remains the health, welfare and safety of its tenants and wider stakeholders.
    • Measures have already been taken in London and Berlin to mitigate disruption resulting from the COVID-19 outbreak.
    • PSD believes it is well positioned to withstand the current dislocations COVID-19 may cause, with a robust business model, a strong balance sheet and good levels of liquidity
  • PSD retains strategic optionality in the likely event the Mietendeckel is found to be unconstitutional.
  • Notwithstanding the near-term impact of COVID-19, long-term Berlin demographic trends likely to remain positive, driven by strong job creation and ongoing population growth.
  • Availability of Berlin rental stock expected to decline.


Robert Hingley, Chairman of Phoenix Spree Deutschland, commented:

“I am pleased to report another resilient performance with significant progress achieved in adapting our strategy in preparation for the new Berlin rent rules. As we await a successful challenge of this new regulation, we are well positioned to mitigate any short-term impact, supported by our strong balance sheet and good liquidity, all the while maintaining our strategic optionality in the event the rules are found illegal. Despite the impact COVID-19 is having on the German economy, we continue to be confident, in the longer-term, in the strength of demand for rental housing in Berlin and in our ability to create value for all of our stakeholders through the continued active management of our portfolio.”