Press and Media

27 April 18

Phoenix Spree Deutschland: Financial results for year ended 31 December 2017

Phoenix Spree Deutschland (LSE: PSDL.LN), the UK listed investment company specialising in Berlin residential real estate, today announces its full year results for the year ended 31 December 2017. Highlights below. For a full copy of the RNS announcement please click HERE or visit the PSD website HERE.

ANOTHER YEAR OF STRONG PERFORMANCE – OUTLOOK REMAINS POSITIVE

Financial Highlights

• EPRA NAV per share grew by 50.5% to €4.11 (£3.65) at 31 December 2017 (31 December 2016: €2.73 (£2.33)).
• EPRA total return per share of 53.0% for the year (2016: 22.5%).
• IFRS NAV per share grew by 56.5% to €3.96 (£3.52) at 31 December 2017 (31 December 2016: €2.53 (£2.16)).
• Gross rental income up 13.5% year-on-year to €18.1 million (2016: €15.9m).
• Profit before tax up 183.3% to €138.5 million (2016: €48.9 million).
• Net loan to value of 32.0% at 31 December 2017 (31 December 2016: 39.4%). All of the Group’s debt has been refinanced within previous 18 months.
• New debt of €57.8 million signed during 2017. Average debt maturity now exceeds eight years. Average interest rate 2.1%.
• Final dividend per share of €5.0 cents (GBP: 4.4p), giving a total dividend per share of €7.3 cents (GBP: 6.4p) for 2017 (2016: €6.3 cents (GBP: 5.3p)).

Operational Highlights

• Portfolio value increased by 43.8% to €609.3 million (31 December 2016: €423.8 million), 40.1% on a like-for-like basis.
• Berlin posted largest like-for-like valuation increase at 41.8%.
• Rent per sqm increased by 4.2% to €8.0 (31 December 2016: €7.6), 6.9% on a like-for-like basis.
• Berlin like-for-like rent per sqm increased by 8.4% to €8.4 (31 December 2016: €7.7).
• Rent on new lettings of €10.3 per sqm, a 7.9% increase over 2016.
• €6.7 million invested in renovations and modernisations across the entire Portfolio during 2017, representing over one third of rental income.
• EPRA Vacancy remains low at 2.9% (31 December 2016 2.6%).
• Condominium sale completion proceeds up 191.8% to €9.5m with an average value per sqm of €3,868, a 20.1% premium to Berlin Portfolio average value per sqm as at 31 December 2017.
• Portfolio now purely focussed on the attractive Berlin market
• Targeted acquisition and disposal strategy during 2017 has created a pure-play Berlin portfolio with potential for greater economies of scale and strategic benefits.
• Disposal of Central and Northern Germany portfolio notarised in December 2017 for €73.0 million, a 26% premium to the Jones Lang LaSalle valuation as at 30 June 2017.
• Sale of other non-Berlin assets during 2017, for combined proceeds of €48.3 million. All disposals at a significant premium to last reported book value.
• Contracts to acquire 366 units notarised during 2017, representing an aggregate purchase price of €55.9 million and an average price per sqm of €2,224.
• As at 20 April 2018, contracts to acquire a further 160 units in Berlin have been notarised since 31 December 2017 year end for an aggregate value of €24.8 million, representing an average price per sqm of €2,348.

Outlook

• Berlin residential demographics remain favourable, driven by strong population growth, job creation and the ongoing process of urbanisation.
• Berlin residential property prices should continue to benefit from a lack of supply and growing demand from both owner-occupiers and investors.
• High embedded value within portfolio: Berlin new leases signed at 40.1% premium to in-place rents during 2017, and 45.7% in the fourth quarter of 2017.
• Strong balance sheet, locking in long-term fixed rate debt at low interest rates, creates scope for further selective acquisitions.
• Due to careful selection, acquisition prices remain below value of in-place housing stock within the Portfolio and cost of new build construction.
• Further new condominium projects and sales are planned for the year ahead.

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