Phoenix Spree Deutschland (LN: PSDL)

Currency in GBP

Last close As at 26/01/2023

GBP2.37

−2.00 (−0.84%)

Market capitalisation

GBP219m

Phoenix Spree Deutschland is a long-term investor in mid-market residential property in Berlin, targeting reliable income and capital growth. Its core strategy is to acquire unmodernised apartment blocks that may be improved to the benefit of tenants, generating attractive returns for shareholders.

Demographic trends within the Berlin market remain positive, supporting growth in free market rents. Rising interest rates, inflation, and economic uncertainty is depressing private buyer and institutional investment demand, creating a headwind for capital values.

Sector

Real Estate

Equity Analyst

Martyn King

Martyn King

Director, Financials

Key Management

  • Richard Collins

    COO

  • Stuart Young

    Partner, head of public markets

Balance Sheet

Forecast net cash (€m)

297.2

Forecast gearing ratio (%)

N/A

Share Price Performance

Price Performance
% 1M 3M 12M
Actual (3.7) (8.5) (37.6)
Relative (7.3) (17.2) (39.1)
52 week high/low 396.0p/236.0p

Financials

Phoenix Spree Deutschland’s (PSDL’s) H122 performance was robust. Rents, property values and NAV all increased. NAV total return was 2.2% and DPS declared was unchanged. PBT was lower (€17.0m vs €20.4m in H121), but the continuing Berlin re-letting premium (33.7%) and premium to book value on condominium notarisations (19.2%) highlight the considerable value embedded in PSD’s portfolio even though volumes weakened (€3m vs €4.3m in H121) as a result of higher interest rates and increasing the cost of home ownership. PSD expects that condominium sales for the full year will be materially lower than in FY21, reducing cash flow. Rising bond yields will likely be reflected in asset values. Despite these headwinds, demographic trends remain positive, and PSD continues to benefit from significant rent reversion. With 76% of units designated as such, from a medium-term recovery in condominium sales. Gearing is modest (36% LTV) and interest costs are fixed at 2.1% until 2026. Our estimates are under review.

Y/E Dec Revenue (€m) EBITDA (€m) PBT (€m) EPS (c) P/E (x) P/CF (x)
2020A 23.9 48.3 37.9 30.1 8.9 39.4
2021A 25.8 45.4 45.3 39.3 6.8 32.0
2022E 26.2 18.7 17.1 15.2 17.7 117.4
2023E 27.7 17.0 9.4 8.7 30.9 32.6

Thematics

Consumer

IPO apocalypse

TMT

ESG, moving beyond the box tick

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