Business
Investment Property Valuation and Business Update
Investment Property Valuation and Business Update.
About this update from Phoenix Spree Deutschland Ltd
[{"type":"text","content":"\n\n03 August 2023\n \nPhoenix Spree Deutschland Limited \n(the \"Company\", the \"Group\" or \"PSD\")\n \nPortfolio valuation and business update for the six months ended 30 June 2023\n \nPhoenix Spree Deutschland (LSE: PSDL.LN), the UK listed investment company specialising in Berlin residential real estate, announces the valuation for the portfolio of investment properties held by the Company and its subsidiaries (the \"Portfolio\") as at 30 June 2023 and an update on business activity.\nFinancial Summary:\n\n\n\nFinancial metric:\n\n\n30 June 2023\n\n\n30 June 2022\n\n\n31 December 2022\n\n\n\n\nPortfolio Valuation, as at (€ million)\n\n\n€714.3\n\n\n€812.4\n\n\n€775.9\n\n\n\n\nValuation per square metre, as at (€)\n\n\n€3,808\n\n\n€4,318\n\n\n€4,082\n\n\n\n\nCondominium notarisations during period (€ million)\n\n\n€2.0\n\n\n€3.0\n\n\n€4.7\n\n\n\n \nPortfolio valuation impacted by interest rate rises and yield expansion\nDuring the first half of the financial year, buyer sentiment and transaction volumes within the Berlin residential market continued to be affected by historically high inflation and interest rates. These weaker market conditions have negatively impacted the valuation of the Portfolio.\n \nAs at 30 June 2023, the Portfolio, including investment properties under construction valued at €4.3m, was valued at €714.3 million. This valuation represents an average value per square metre of €3,808 and a gross fully occupied yield of 3.3 per cent. Included within the Portfolio are seven multi-family properties valued as condominiums, with an aggregate value of €39.2 million (30 June 2022: six properties; €32.3 million).\nOn a like-for-like basis, after adjusting for the impact of acquisitions net of disposals, the Portfolio valuation declined by 6.9 per cent during the half year to 30 June 2023.\n \nRental market remains robust\nRental market conditions remain strong. During the first half of the financial year, supply-demand imbalances within the Berlin PRS market have widened. Further net inward migration and higher home ownership costs, which have forced potential buyers to remain within the rental system for longer, continue to increase demand. At the same time, supply continues to be constrained by higher funding and construction costs. Against this backdr...