Phoenix Spree Deutschland has exchanged contracts to buy four properties in Berlin and has sold two buildings in Nürnberg at a significant premium to book value.
The four Berlin properties were bought for an aggregate consideration of €R19.8m (£14m), excluding acquisition costs; representing a price per square metre of €1,640. The deal covers 150 residential and 10 commercial units and should increase the Fund’s rental income by approximately 5.4%. Completion expected in Q1 2016, following which the Fund’s Berlin properties will represent c.68% of its portfolio. In aggregate, the properties contain c.12,000 sqm of lettable space.
Three of the properties are classic “altbau” buildings constructed before 1914. Two properties are located in Prenzlauer Berg, a desirable district in East Berlin, while the remaining two are located in South East Berlin, and are expected to benefit from the opening of the new international airport. PMM Partners, Property Advisor to the Fund, believes that all of the properties offer scope for value improvement through active asset management.
Including the acquisition of Boxhagenerstrasse, which was notarised in July 2015 for €16m, the Fund has completed or notarised a total of five acquisitions since listing on the London Stock Exchange in June 2015. In aggregate the acquisitions have a value of €35.8m, representing 213 apartments, 14 commercial units and a lettable area of approximately 18,200 sqm.
In total, these five acquisitions are expected to add more than 11% to the Fund’s rental income and increase the proportion of the portfolio in Berlin, where residential prices remain, on average, below the cost of construction. The Acquisitions will initially be financed by existing cash resources, however it is expected that the Fund will refinance the Acquisitions and it has received indicative offers of finance from German lending banks.
The Fund has also notarised the disposal of two small buildings in Nürnberg to a local developer. The disposal value represents a premium of around 60% to book value and the transaction is expected to add approximately 0.25% to the Fund’s EPRA NAV.
PSDL : Phoenix Spree buys in Berlin