A trading update ahead of the release of H123 results in September showed the core rental business remaining strong, although property values declined further, and transactions activity remains subdued. During H1, property valuations declined by a like-for-like 6.9% and in combination with rental growth, the gross fully occupied yield increased to 3.3% from 3.1% at end-FY22. Supply and demand imbalances within the Berlin private rental sector remain firmly supportive of rental values and PSD expects annualised like-for-like rental growth to accelerate from 5.5% at end-H123 to c 6.5% over the next 12 months. Although buyers of individual condominiums continue to sit on their hands and PSD’s notarisations are well below historical levels, the sales premium to book value (68% in H123) indicates underlying support for values. We will review our estimates once results are released but note that rental growth is stronger and asset values weaker than we have forecast.