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Phoenix Spree DeutschlandAnnouncement

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RNS Number : 4949T  Phoenix Spree Deutschland Limited  01 August 2025

1 August 2025

Phoenix Spree Deutschland Limited

(the "Company", the "Group" or "PSD")

Portfolio Valuation and Business Update

Phoenix Spree Deutschland (LSE: PSDL.LN), the UK listed investment company
specialising in Berlin residential real estate, announces an update on its
condominium sales strategy and the valuation of the portfolio of investment
properties held by the Company and its subsidiaries (the "Portfolio") as at 30
June 2025.

Highlights:

Portfolio valuation

·    Second Consecutive Valuation Increase: The overall Portfolio value
rose by 0.6% on a like-for-like per sqm basis during the first half of 2025.

·    PRS Portfolio: Achieved its first valuation increase since 2022,
with a like-for-like per sqm increase of 0.8% during the first half of the
financial year.

·     Condominium Sales Portfolio: Recorded a like-for-like per sqm
increase of 0.8% during the first half of the financial year.

 

Condominium sales

·   By 24 July 2025, the Company had notarised 57 units with a combined
value of €16.3m, an increase of 210% compared with the same period last
year. A further 13 units (€3.8m) are subject to reservations.

·    On average, units (both vacant and occupied) were notarised at a sale
price of €3,993 per sqm, in line with JLL carry value for the properties
from which they were sold.

·    Vacant units to 24 July 2025 notarised at an average per sqm sale
price of €5,010, a 22.0% premium to JLL carry value. Occupied units averaged
€3,645 per sqm (7.8% discount to JLL carry value).

 

Outlook

·    Condominium prices are expected to remain robust relative to PRS
prices, supported by strong demand and limited new  supply due to regulatory
constraints.

·    Sales from condominium tranches 3 and 4 are expected to drive higher
transaction volumes in the second half of 2025, with sales to tenants
continuing to support strong demand.

·     The Company remains on track to achieve its previously announced
target of €50m annualised condominium sales rate by the end of the financial
year.

·     Discussions on refinancing of the Company's existing debt
facilities are progressing well.

 

Robert Hingley, Chairman of Phoenix Spree Deutschland, commented:

"The progress achieved during the first half of 2025 has positioned Phoenix
Spree Deutschland strongly for the remainder of the year and beyond. We are
seeing good demand in the Berlin condominium market, with sales prices
remaining robust and volumes exceeding expectations. This, coupled with the
stabilisation of PRS valuations, demonstrates the resilience of Berlin's
residential property market.

Our strategic focus on accelerating condominium sales, reducing leverage, and
optimising our Portfolio continues to deliver tangible results. We are making
good progress towards our debt refinancing, which is expected to permit us to
begin returning capital to shareholders. The Board and Property Advisor are
fully committed to executing our strategy with a clear focus on monetising the
full value of the Portfolio."

Portfolio valuation

Condominium values remained resilient during the financial year and, for the
first time since the decline in real estate values began in 2022, PRS
valuations have risen.

 

As at 30 June 2025, the total Portfolio value was €549.2m, with an average
value of €3,650 per sqm and a gross yield of 3.2%. On a like-for-like basis
(adjusted for disposals), the Portfolio value increased by 0.6% during the
half-year to 30 June 2025.

Since the total sqm of the higher-valued Condominium Sales Pool decreased (due
to condominium sales) while the lower-valued PRS Properties maintained their
size, the overall mix shifted slightly toward the lower-priced segment. The
total Portfolio weighted average therefore increased by less than the 0.8 %
observed inside each segment.

Table: JLL Valuation summary

 Total Portfolio       30 June  30 June  31 December 2024  31 December 2023
                       2025     2024
 Number of properties  74       93       74                95
 Residential units     2,028    2,535    2,053             2,489
 Commercial units      108      138      108               140
 Total units           2,136    2,673    2,161             2,629
 Total sqm ('000)      150.2    186.0    152.2             187.7
 Valuation (€m)        549.2    646.4    552.8             675.6
 Value per sqm (€)     3,650    3,480    3,630             3,598

 

 Condominium Sales Pool  30 June  30 June  31 December 2024  31 December 2023
                         2025     2024
 Number of properties    40       6        40                7
 Residential units       854      75       880               92
 Commercial units        62       8        62                8
 Total units             916      83       942               100
 Total sqm ('000)        66.4     7.6      68.3              8.9
 Valuation (€m)          272.4    29.6     278.0             35.1
 Value per sqm (€)       4,102    3,910    4,070             3,921

 PRS Properties          30 June  30 June  31 December 2024  31 December 2023
                         2025     2024
 Number of properties    34       87       34                88
 Residential units       1,174    2,460    1,173             2,397
 Commercial units        46       130      46                132
 Total units             1,220    2,590    1,219             2,529
 Total sqm ('000)        83.8     178.4    83.9              178.8
 Valuation (€m)          276.8    616.9    274.8             640.5
 Value per sqm (€)       3,302    3,457    3,277             3,582

 

Condominium Sales Portfolio like-for-like increase of 0.8%

As of 30 June 2025, the Condominium Sales Portfolio (40 properties, 916 units)
was valued at €272.4m (€4,102 per sqm). The value per sqm of these
properties increased by 0.8% in the half-year.

 

PRS Portfolio records first like-for-like valuation increase since 2022

As at 30 June 2025, the PRS Portfolio (34 properties, 1,220 units) was valued
at €276.8m, with an average value of €3,302 per sqm. On a like-for-like
basis, the value per sqm of these properties increased by 0.8% in the
half-year. This marks the first valuation increase recorded since the market
downturn began in 2022.

 

Progress on condominium preparation and marketing

The 40 properties currently approved for inclusion as condominium sales
projects have been grouped into tranches, based on the degree of capital
expenditure required to prepare them for sale.

 

Units available for sale rose from 366 on 1 January 2025 to 648 by 30 June
2025. Tenant-purchase discussions for Tranche 3 began in June, with apartments
not reserved by tenants publicly listed in early July. Reflecting this, no
condominiums from Tranche 3 were notarised as at 30 June 2025. Preparations
for Tranche 4 are on schedule, with preparatory capital expenditure due to
finish by late September 2025, after which marketing will commence.

By the end of December 2025, a total of 942 units will have been made
available for sale, up from 366 units at the start of the financial year and
108 at the beginning of December 2024.

 

Table: Condominium preparation

 Property group  Sales Status         Number of properties  Units as at 1 Jan 2025  Sqm as at    Potential project sales value(1)

1 Jan 2025
 Tranche 1       On market 2024       6                     108                     9,291        €41.3m
 Tranche 2       Added December 2024  10                    258                     19,711       €78.5m
 Tranche 3       Added June 2025      12                    282                     19,549       €82.6m
 Tranche 4       Commencing Q3 2025   12                    294                     19,760       €96.0m
 Total                                40                    942                     68,311       €298.4m

1.         Estimated value at beginning of condominium sales pivot
based on assessment of individual assets by QSix, Engel & Völkers and
Lübke Kelber.

 

Condominium notarisations and pricing

Condominium demand in Berlin remains firm, and pricing has held steady. By 24
July 2025, the Company had either notarised or reserved 57 units with a
combined value of €16.3m, an increase of 210% compared with the same period
last year. A further 13 units have been reserved for sale, for an aggregate
sale price of €3.8m.

 

Notarised transactions so far in 2025 have achieved an average price of
€3,993 per sqm in line with the JLL carry value for the condominium assets
from which these units were sold. Vacant units were sold at an average of
€5,010 per sqm (a premium of 22.0% to JLL carry value), while occupied units
averaged €3,645 per sqm, 7.7% below carry value.

 

With stock from Tranches 3 and 4 coming to market, the Company expects sales
momentum to accelerate in the second half of the financial year.

Table: Condominium notarisations and reservations (2025 to date)

 Notarisation period / status               Units   Sales Value (€m)     Price per sqm (€)    Premium / discount to Portfolio carry value(1,2)  Premium / discount to asset carry value(1,3)
 Vacant notarisations
 Notarised January                          0      0                     0                    0                                                 -
 Notarised February                         4      1.45                  5,293                45.8%                                             23.2%
 Notarised March                            2      0.72                  5,987                64.9%                                             32.1%
 Notarised April                            4      1.06                  4,402                21.3%                                             20.6%
 Notarised May                              1      0.35                  4,031                11.1%                                             25.1%
 Notarised June                             5      1.40                  5,253                44.7%                                             20.9%
 Notarised to 24 July                       1      0.25                  4,481                22.8%                                             0.0%
 Total vacant notarisations                 17     5.23                  5,010                38.0%                                             22.0%

 Occupied notarisations
 Notarised January                          4      0.82                  2,987                -17.7%                                            -24.5%
 Notarised February                         4      1.08                  4,055                11.7%                                             0.5%
 Notarised March                            9      2.36                  3,476                -4.2%                                             -4.4%
 Notarised April                            7      1.81                  3,840                5.8%                                              -11.7%
 Notarised May                              3      1.05                  4,323                19.1%                                             -0.3%
 Notarised June                             8      2.48                  3,626                -0.1%                                             -8.4%
 Notarised to 24 July                       5      1.50                  3,507                -3.9%                                             -5.8%
 Total occupied notarisations               40     11.09                 3,645                0.3%                                              -7.8%
 Total notarisations (vacant and occupied)  57     16.31                 3,993                9.9%                                              0.1%
 Total outstanding reservations             13     3.78                  4,436                21.8%                                             13.3%
 Total reservations and notarisations       70     20.09                 4,070                12.0%                                             2.3%

1.         Carry value is determined using the most recent JLL
valuation per sqm. For notarisations completed before June 30, 2025, the
applicable valuation is from December 2024. For notarizations occurring after
June 30, 2025, the carrying value will be based on the JLL valuation as of
June 30, 2025.

2.         The Portfolio carry value represents the average valuation
per sqm across all assets within the Company's Portfolio.

3.         The asset carry value refers to the JLL valuation of the
specific properties associated with units being notarised during the period.

Ratio of vacant to occupied sales

The ratio of vacant to occupied sales is currently low at 29.8%. This reflects
our strategy of initially offering units for sale to tenants. For tranches 1
and 2, tenant demand is expected to moderate in the second half of the
financial year. However, the Company expects strong demand from tenants from
Tranches 3 and 4 in the second half of the financial year.

 

Over an entire four-to-five-year sales cycle, the Company expects vacant units
to account for between 40% and 50% of sales, driven largely by natural tenant
turnover of 8-10% per annum. Condominium sales projects completed between 2016
and 2024 recorded an average vacant sale share of 58%.

 

Further condominium potential within the Portfolio

Twenty legally divided buildings (739 units, or 34% of the Portfolio) are
currently outside the active sales pool. Securing new debt should provide the
flexibility to bring a portion of these assets into the condominium sales
programme during 2026.

 

Table: Condominium potential within the Portfolio

 Property status as at                          Number of properties  Starting Number of units  Area     Units as % total

31 December 2024
(sqm)
 Divided and in condominium sales pool          40                    942                       68,312   43.6%
 Divided but not yet in condominium sales pool  20                    739                       47,432   34.2%
 Total divided properties                       60                    1,681                     115,744  77.8%
 Undivided properties (PRS)                     14                    480                       36,422   22.2%
 Total properties                               74                    2,161                     152,166  100.0%

 

Outlook

The Company remains focused on executing its strategic plan, with condominium
sales expected to maintain strong momentum as new units are added to the
Condominium Sales Portfolio. Sales completed during the first half of the year
confirmed the JLL valuation for these assets, and achieved a 40% premium to
the per sqm value of unsplit PRS properties. This underscores the significant
additional value that can be generated through the Company's condominium sales
strategy.

 

Significant progress has been made in putting in place a refinancing package
designed to provide greater flexibility in meeting the Company's mid-term
objectives. Indicative offers have already been received from potential
lenders and, once finalised, this financing package is expected to support the
introduction of a capital return policy linked to condominium sale proceeds,
commencing in 2026.

 

The implied value of the Portfolio, based on the current share price,
currently stands at €2,760 per sqm, compared to average gross condominium
sales prices of €4,009 per sqm achieved during the year to date. The Company
is confident that ongoing condominium sales at prices consistent with their
current valuation, ultimately coupled with capital returns to shareholders,
will help reduce the share price discount to Net Asset Value.

Interim Results

The Company intends to publish its interim results for the twelve months to 30
June 2025 on 26 September 2025.

For further information, please contact:

Phoenix Spree Deutschland Limited
 
+44 (0) 20 3937 8760

Stuart Young

 

Deutsche Numis (Corporate Broker)
                                     +44
(0) 20 7260 1000

Hugh Jonathan

 

Teneo (Financial PR)
                                    +44 (0) 20 7353 4200

Elizabeth Snow

 

 

 

 

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