Phoenix Spree Deutschland Ltd · LSE:PSDL
Phoenix Spree Deutschland — FY2023 Earnings Presentation
32 slides from Phoenix Spree Deutschland's earnings presentation, May 13, 2024
Slide 1: Phoenix Spree Deutschland 2023 Annual Results Presentation and Condominium Sales Strategy
Phoenix Spree Deutschland 2023 Annual Results Presentation and Condominium Sales Strategy PRIVATE & CONFIDENTIAL - FOR INSTITUTIONAL INVESTORS ONLY
Slide 2: Disclaimer
Disclaimer This document is provided solely to authorised recipients and is provided on a confidential Any views contained in this document are based on financial, economic, market and other basis by QSix. Any unauthorised review, use, disclosure, reproduction or distribution is conditions prevailin
Slide 3: Phoenix Spree Results Highlights
Phoenix Spree Results Highlights 3
Slide 4: Information on the Portfolio
1 Information on the Portfolio Number of properties Residential space Berlin location Portfolio Valuation (€) Fully occupied yield EPRA Vacancy 95 92% 97% 675.6m 3.3% 2.0% 95 Properties, 2,629units1 Key Metrics (31 December 2023) 1 Value by Strategy (31 December 2023) 1 Berlin Condo — Portfolio valu
Slide 5: Financial highlights FY 2023
Financial highlights FY 2023 H1 Financial highlights1 Financial summary1 Dec Dec 2023 v 2022 Loss before tax1 2023 2022 % change €(111.8)m €(17.5)m Income Statement Gross rental income (€m) 27.5 25.9 5.9 2023 2022 Loss before tax (€m) (111.8) (17.5) (537.1) Dividend per share in respect of the 0.00
Slide 6: 2023 Highlights
2023 Highlights1 Portfolio valuation Rental Income Condo sales (2023) Accelerated condo Balance sheet Property Advisor fees sell down €676m1 €10.4 per sqm¹ €7.2m¹ €50m 1 46.3% 1 -40%1 11.9% v FY 20221 4.1% l-f-l1 7.2% premium to BV1 Annualised by 2025 1 Net LTV Versus 2022 Portfolio valuation Ren
Slide 7: Portfolio value & rental growth
Portfolio value & rental growth Rental market remains strongly underpinned, investment volumes and valuations remain weak. Portfolio rent per sqm and like-for-like annual growth* 1 Portfolio valuations and like-for-like growth 2008 – 2023 (€m) 1 (€ per sqm/month) 6.3% 4.1% 3.1% 3.9% 6.3% 7.1% 11.9%
Slide 8: Key performance indicators
Key performance indicators Like-for-like per sqm rental growth (%)1 EPRA vacancy (%)1 Condominium sales (€m)1 14.6 15.2 6.9% 7.4% 5.3% 5.6% 3.9% 9.1 9.0 8.8 4.1% 4.6% 4.1% 4.1% 7.2 3.9% 3.9% 2.9% 3.1% 2.6% 2.8% 2.8% 5.5 2.4% 4.7 4.7 2.1% 2.0% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2015 20
Slide 9: Balance sheet
Balance sheet PSD has loan facilities with two principal bankers, Natixis Pfandbriefbank AG and Berliner Sparkasse. The average remaining duration of the loan book is 2.8 years, with none of the Company’s debt reaching maturity until September 2026. Debt and Gearing1 Borrowings1 350 ― Reflecting cur
Slide 10: Berlin transaction market
Berlin transaction market 10
Slide 11: German residential transaction volumes (€bn)
German residential transaction volumes (€bn) High interest rates and a weakening German economy have continued to impact buyer sentiment and investment transaction volumes. Conditions across the German real estate market for whole building and portfolio sales have been challenging and are expected t
Slide 12: Berlin condominium pricing
Berlin condominium pricing Although Conditions across the German real estate market for whole building and portfolio sales have been challenging and are expected to remain so in the near term, liquidity remains in the Berlin condominium market , particularly for vacant units. Pricing in the Berlin c
Slide 13: Strategy to accelerate condominium sales
Strategy to accelerate condominium sales 13
Slide 14: PSD Condominium strategy: Context
PSD Condominium strategy: Context There is a significant potential valuation arbitrage between the value per sqm of condominiums and the value of PRS buildings. During 2023, condominiums were sold at an average 53% premium to the Portfolio value per sqm implied by the current share price. Drivers of
Slide 15: Condominium Strategy: Implementation
Condominium Strategy: Implementation A significant and growing pricing arbitrage 78% 6% − Focus on exploiting the significant arbitrage that currently exists in 1 1 the Berlin residential market between the average per square metre value of an apartment as a rental unit and the resale value per squa
Slide 16: PSD condominium portfolio
PSD condominium portfolio PSD buildings are centrally located. With over 1,900 units, representing 78 per cent of its Portfolio, already legally split in the land registry, the Company owns the largest portfolio of condominiums in Berlin. PSD condominium splits PSD condominium locations 6%1 78%1 Cur
Slide 17: Portfolio examples
Portfolio examples 17
Slide 18: Condominium transactions 2016-2023
Condominium transactions 2016-2023 The long-term discount of occupied sales values compared to vacant units averages around 13.9%. While this discount briefly reversed to a premium during 2019/2020, recent market turmoil has led to even larger discounts. However, these are now beginning to stabilise
Slide 19: Condominium sales values 2016-2023
Condominium sales values 2016-2023 While vacant condo sales typically command a premium on a €/sqm basis compared to occupied units, the discount on occupied sales is offset by the benefits of accelerated sales. Condominium sales values and discounts 2016-2023 Occupied condominium yields 2016-2023 7
Slide 20: Occupied versus vacant condo unit sales
Occupied versus vacant condo unit sales Historically, given the limited number of vacant units available, a significant share of condominium sales involve vacant units. However, occupied units can be sold as well and, given the shortage of condominiums in the Berlin market, the purchase of occupied
Slide 21: 2023 condominium sales values
2023 condominium sales values During 2023, PSD notarised 25 condominium units for sale from a total of seven condominium projects. Vacant units sold for between €3,979 per sqm and €7,551, a significant premium per sqm to the portfolio valuation by the current share price of €2600 per sqm. Lower valu
Slide 22: Improving energy efficiency
Improving energy efficiency Properties not part of the condominium pool will continue to operate on a PRS model, receiving targeted investment to improve their energy efficiency and raise EPC ratings to a minimum of C in the medium term. Raising EPC ratings to a minimum of C 2023 EPC ratings across
Slide 23: PSD PRS business overview
PSD PRS business overview PHOENIX OSIX 23 » SPREE
Slide 24: Berlin asking rents for existing buildings
20,000 4,000 10,000 0 2,000 6,000 8,000 12,000 16,000 18,000 14,000 Apr 2014 Jun 2014 Aug 2014 Oct 2014 Dec 2014 Feb 2015 Apr 2015 Source: Guthman Estates Jun 2015 Aug 2015 Oct 2015 Dec 2015 Feb 2016 Price segment €5-€8 Apr 2016 Jun 2016 Aug 2016 Oct 2016 Dec 2016 Feb 2017 Apr 2017 Jun 2017 Aug 2017
Slide 25: PSD rental growth
PSD rental growth Rental market remains strongly underpinned, investment volumes and valuations weak. Portfolio rent per sqm and like-for-like annual growth* 1 Portfolio rent per sqm and like-for-like annual growth* 1 (€ per sqm/month) (€ per sqm/month) − After considering the impact of acquisitions
Slide 26: PSD reversionary rental premium
PSD reversionary rental premium Reversionary rental premium remains robust, reflecting supply-demand balance for Berlin residential rental Reversionary rental premium remains robust Reletting premium on new lettings versus average in place rents 2015 – 20232 ― Market rents are at record levels, with
Slide 27: PSD rent multiples
PSD rent multiples Affordability criteria for incoming tenants closely monitored. There have been no material changes in incoming tenant affordability, which is significantly lower in Berlin than most other EU capital cities. Monthly rental payments as percentage of net income for incoming tenants.1
Slide 28: PSD tenant structure
PSD tenant structure Incoming tenants largely from outside Berlin and heavily focussed on service sector, as opposed to manufacturing industries New contracts signed during the year by origin of tenant, New contracts signed during the year by tenant occupation, year to 31 December 2023 Year to 31 De
Slide 29: Outlook
Outlook Sy PHOENIX OSIX 29 Gf SPREE
Slide 30: Market outlook
Market outlook Rental growth continuing1 Values & transaction volumes1 Condominium and other sales1 Balance sheet1 ‒ Expect rental values to ‒ Ongoing impact of 2022/23 ‒ Subject to the successful continue to be supported by ‒ The Company plans to use interest rate rises continues conclusion of revi
Slide 31: Contact QSix
Contact OSIx PHOENIX OSIX * » SPREE
Slide 32: Contact Us
Contact Us QSix London QSix Berlin Royal Trust House 54 Jermyn Street Kurfürstendamm 38/39 London SW1Y 6LX 10719 Berlin +44 20 3937 8760 +49 30 80 40 70 70 info@qsix.com info@qsix.com PAST AND FORECASTED PERFORMANCE, AND TARGET RETURNS ARE NO INDICATION OF FUTURE RESULTS. 32 PLEASE REFER TO THE DISC
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