Phoenix Spree Deutschland (PSDL), which specialises in German residential real estate, has released an update. To date, the impact on rent collection has been limited. In the month to 30 April 2020, PSDL said that 98% of rent due had been collected in total compared to 99% in January 2020.
Germany begins to ease restrictions
On 20 April 2020 the German government announced plans to begin to lift restrictions imposed, becoming one of the first major European nations to do so.
PSDL noted that where necessary, it continues to support its tenants, both residential and commercial, through agreeing, on a case-by-case basis, the payment of monthly rents or deferring rental payments.
Limited impact on rent collection
“To date, the impact on rent collection has been limited. In the month to 30 April 2020, 98% of rent due had been collected in total compared to 99% in January 2020.
Residential rent collection has remained particularly resilient, with over 99% of rent collected during the month of April. Germany’s Hartz IV welfare programme includes help for rental payments in instances of financial hardship and is available to tenants impacted by the covid-19 outbreak.
Commercial rents represent a small proportion of total rents, accounting for only 10% of rental income as of 30 April 2020. The covid-19 restrictions involved the temporary closure of many commercial businesses, including a number of our commercial tenants. Following the latest German covid-19 guidance on easing restrictions, many businesses are now in the process of reopening. During the month of April 2020, 89% of commercial rents have been collected, compared with 96% in January 2020.
The company will continue to work sensitively, and on a case-by-case basis, with its tenants in arrears to agree appropriate and workable repayment schedules.”
Dividends, covid 19 and Berlin Mietendeckel
“As previously announced, the company has declared an unchanged second dividend of €5.15 cents, which is expected to be paid on or around 3 July 2020 to shareholders on the register at close of business on 12 June 2020, with an ex-dividend date of 11 June 2020.
Ahead of the lifting of restrictions imposed as a result of the covid-19 pandemic, rent collection has remained resilient. Whilst there currently remains uncertainty surrounding the legality of the new Berlin Mietendeckel and the duration of legal challenges, PSDL is well positioned to mitigate the financial impact pending legal clarification. On 6 May 2020, the parliamentary groups of the CDU/CSU and FDP of the Deutsche Bundestag officially filed for a judicial review of the Mietendeckel legislation at the federal constitutional court in Karlsruhe.
The Board remains confident in the long-term outlook for PSD, particularly given the strength of demand for housing in Berlin. The Company is due to announce its results for the half-year to 30 June 2020 in early September, and will provide further updates in the interim in the event that conditions substantially change as a consequence of covid-19.”
Robert Hingley, chairman of PSDL, commented:
“We have continued to focus on our top priorities of the safety and wellbeing of our tenants, suppliers and other key stakeholders. The business has shown its resilience throughout these unprecedented times and, although German covid-19 restrictions are now in the process of being lifted, the Portfolio is well prepared for a protracted period of disruption should this arise. Recent legal developments challenging the legality of the Mietendeckel have been positive and our balance sheet strength and liquidity mean the company is well positioned to weather any impact from both covid-19 and the Mietendeckel until such time as market conditions normalise.”
PSDL: Phoenix Spree Deutschland collected 98% of April rent as Germany eases restrictions