Phoenix Spree increases Berlin focus, NAV up 20% in 2016

Phoenix Spree Deutschland had a good 2016. The EPRA NAV per share rose by 19.7% to EUR2.73. The portfolio value increased by 49.5% to EUR423.8 million, or 19.4% on a like-for-like basis excluding the impact of acquisitions and disposals. Positive market fundamentals continued to drive growth in demand for rental apartments, while supply remained constrained. The year to 31 December 2016 saw the share price rise from 156 to 232 pence per share, representing an increase of 49.5% during the period. A final dividend of EUR4.3 cents per share (GBP 3.7 pence per share), takes the full year dividend to EUR6.3 cents per share (GBP 5.3 pence per share), representing an 8.4% increase on the 2015 full year Euro denominated dividend.

They completed or notarised a further EUR78.3 million of acquisitions, all of which were located in Berlin. During the financial year, the Group successfully sold several properties outside Berlin that had been identified as non-core. In April 2017, a portfolio of 17 properties located in Nuremberg and Fürth was notarised for sale at a significant premium to book value. On completion, the combined impact of these transactions will increase the contribution of Berlin to 81.9% of the Portfolio by value.

The EPRA vacancy rate improved, ending the year well below 3%, and the period closed with a strong balance sheet, showing a net loan to value of 39.4% and cash balances of EUR18.5m.

The Group has continued to divide and resell a small number of carefully selected apartment blocks as condominiums in order to monetise the arbitrage that exists between the value of an apartment block and the value of the same property sold as single apartments. During the year to 31 December 2016, the average achieved price per square metre for condominiums sold or notarised represented a 62% premium to the average valuation per square metre for the Fund’s Berlin portfolio, demonstrating the potential that exists to unlock value by pursuing a targeted condominium strategy.

PSDL : Phoenix Spree increases Berlin focus, NAV up 20% in 2016