Phoenix Spree Deutschland, which is undergoing a portfolio realisation programme, reported an uplift in the value of its portfolio over the year to 31 December 2024 – the first since 2022.
On a like-for-like basis (adjusted for disposals), the value of its Berlin residential portfolio rose 0.8% in 2024 and 3.2% in the second half of the year. The condominium portfolio value grew 9.0%, driven by PRS properties redesignated under the accelerated condominium sales strategy.
The PRS portfolio value fell 6.3% on a like-for-like basis, but the 2.8% decline in the second half of the year was the smallest since the real estate downturn began in 2022.
It could not prevent a 10.4% drop in EPRA net tangible assets (NTA) to €3.55 per share.
The company is pursuing a strategy to sell off its Berlin residential assets, primarily through condominium sales, and completed a €75.9m of sale of a 385-unit portfolio comprising 16 properties to funds managed by Partners Group in December 2024.
Its accelerated condominium sales programme is well underway, with stock available for sale expected to rise from 108 units in December 2024 to 942 units by the third quarter of 2025.
The company can achieve a large uplift in valuation when selling its assets as individual condominiums compared to the wider portfolio (€4295 per sqm versus €3633 per sqm).
The company said that sales prices for condominiums in Berlin per sqm are expected to remain significantly higher than the equivalent values of PRS properties and it remains optimistic in achieving its target annualised condominium sales rate of €50m by the end of 2025.
During the year the company reduced net debt by €89.9m, lowering net LTV from 46.3% to 40.3%, with a further reduction expected, driven by the condominium sales. Discussions in relation to the refinancing of debt maturing in 2026 are currently underway, the company said.
Robert Hingley, chairman, said: “I am pleased to announce that our portfolio has reached a turning point, achieving its first like-for-like valuation increase since the broader German residential market downturn began in 2022.
“The significant divergence in price per square meter between condominiums and PRS properties that has been observed in the Berlin residential market in recent years is expected to continue, and it is against this backdrop that the company plans to materially accelerate condominium sales in 2025 and beyond. The company remains on track to deliver on its 2025 condominium sales targets.
“The company’s strategic outlook has been further improved by recent enhancements to its balance sheet. Asset disposals completed in December 2024 have already contributed to a considerable debt reduction, with ongoing condominium sales expected to drive further deleveraging. Additionally, refinancing discussions are underway with the aims of improving operational and financial flexibility, further enhancing the company’s capacity for future condominium sales and expediting capital returns to shareholders.”
