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Phoenix Spree Deutschland reports 7% NAV rise in 2021

Phoenix Spree Deutschland, the Berlin residential landlord, has reported a 7.0% uplift in NAV in annual results, helped by an end to the Mietendeckel (rent control policy) in the German capital.

EPRA net tangible asset (NTA) per share was €5.65 at the end of December 2021, up from €5.28 a year prior. This was largely down to a 6.3% increase in the value of its portfolio to €801.5m, reflecting increased market rents and progress in condominium splitting.

The group paid or declared dividends for the period of 7.5 euro cents, equating to a NAV total return for the year of 8.4%.

Gross rental income was up 7.9% in the year to €25.8m, while profit before tax was €45.3m (2020: €37.9m).

The group signed 240 new leases during the year, with the average rent of all new lettings increasing to €12.2 per sqm, a 4.4% increase on 2020. New leases in Berlin were signed at an average 33.8% premium to passing rents.

All leases had been structured to allow for the back payment of rents due for the period during which the Mietendeckel rent freeze was in place, and the company has now collected 95% of the back-dated rent.

The company notarised €15.2m of condominium sales in 2021, with an average price achieved of €5,031 per sqm, representing a 21.7% premium to 31 December 2020 book value. Three-quarters of the Berlin portfolio has now been legally split into condominiums and applications are in progress for a further 10% (legislation is likely to impact the ability to split condominiums in the future).

The company made its first acquisition since removal of Mietendeckel in March 2022, buying 17 semi-detached, residential properties in Berlin beltway for €18.5m.

Financials

A new €60m loan facility was agreed with Natixis in January 2022, which offers the group flexibility to pursue potential further acquisitions as well as continued investment into existing portfolio.

The company refinanced €49.7m of Berliner Sparkasse debt, releasing a further €14.9m of cash. Net loan to value (LTV) was 34.7% (2020: 33.1%).

Robert Hingley, chairman, commented:

“I am pleased that the Company has been able to deliver another strong performance with continued growth in property values and overall net asset value. The reversionary potential that existed within the portfolio before the introduction of the Mietendeckel is again evident following its withdrawal, and the value within our portfolio has been further underpinned by our ongoing ability to sell condominiums at a premium to book value.

“Our new debt facility and refinancing has strengthened our balance sheet strength and liquidity, and it is pleasing that we have successfully completed our first acquisition since the removal of the Mietendeckel.

“We are confident in the ongoing strength of the Berlin residential market and remain focused on continuing to deliver value to shareholders through further investment in our portfolio growth and quality.”

PSDL : Phoenix Spree Deutschland reports 7% NAV rise in 2021

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