Continuation vote and condominium sales update

12 March 2025

Phoenix Spree Deutschland Limited
(the "Company", the "Group" or "PSD")

Continuation vote and condominium sales update

Following today's announcement that shareholders have voted in favour of the continuation of the Company, 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.

Highlights

·    Resolutions to continue the Company and amend its Investment Objective and Policy have been passed at today's EGM.

·   Number of units on the market has increased from 108 as at 1 December 2024 to 366 currently (16 properties), with a further 576  units (24 properties) expected to be made available for sale in 2Q and 3Q 2025.

·    13 units notarised for sale since the 2024  financial year-end, with a combined sales value of €3.73 million and an average price per sqm of €4,220. Reservations for a further 22 units, with a combined sales value of €6.53 million.

·    Vacant units notarised for sale at an average price per sqm of €5,336, a 47% premium to the average per sqm valuation of the Portfolio as at 31 December 2024. Occupied units notarised for sale at an average price per sqm of €3,718, a 2% premium.

·    Year-to-date, the value of reservations and notarisations represents a 258% increase compared with the same period in the prior year, partially driven by strong demand from tenants.

·    The Company remains confident that it will reach its targeted annualised condominium sales rate of €50m by year end 2025.

·    The Company has a total of 60 properties (1,682 units) legally split as condominiums. As part of  refinancing  its existing September 2026 debt facility, the Company aims to further increase the size of the condominium pool that can be made available for sale at any time.

Condominium preparation and marketing

As previously announced, preparations for the marketing of the first 10 buildings, comprising 258 units, began in late 2024 and these buildings are now being actively marketed. These buildings were prioritised due to minimal capital expenditure requirements to facilitate sales and are now being actively marketed by Engel & Völkers and Lübke Kelber. Tenants are initially offered the option to purchase their units before wider sales processes begin, and buying interest has been stronger than expected. After this initial phase, we expect buyer demand to shift more towards vacant apartments and anticipate a split of around 50% between vacant and occupied units across the life of each project.

The number of units currently being marketed for sale has increased from 108 in December 2024 to 366.

A further 24 buildings are expected to be added to the condominium sales pool in two tranches. Preparatory work on the next 12 buildings (282 units) is underway, with capital expenditure projects to facilitate sales expected to conclude by the end of the first half of the financial year, enabling their marketing to begin. The final 12 buildings (294 units), requiring more preparation, are expected to be market-ready by Q3 2025.

By 2025 year-end, the total number of units available for sale is projected to grow to 942.

Condominium notarisations and reservations

Conditions in the condominium market remain buoyant, with no discernible change in pricing dynamics versus those experienced during 2024.

Following the addition of 10 buildings to the condominium sales pool in late December 2024, condominium sales activity has accelerated. As at 7 March 2025, 35 units have been notarised or reserved for a combined value of €10.26 million, a 258% increase versus the same period in 2024 (7 units, €2.87 million). Of these, 8 were vacant and 27 were occupied.

The average notarised sales price achieved year-to-date was €4,220 per sqm, a 16.3% premium to the  31 December 2024 per sqm Portfolio average. Vacant units were sold for an average price of €5,336 per sqm (a 47% premium to the average per sqm valuation of the Portfolio as at 31 December 2024), while occupied units sold for an average price of €3,718 per sqm (2.4% premium).

A further 22 units with a combined sales value of €6.53 million have been reserved for sale and expected to notarise by the end of April. It is expected that condominium sales will accelerate during the year ahead as preparatory work on further condominium projects is completed and they are brought to market.

Outlook

The phased rollout of condominiums is progressing as planned, and the Company remains confident of achieving its previously announced annualised target of €50 million in condominium notarisations before the end of 2025.

Currently, combined sales and notarisations (of €10.26 million from 366 units on the market) are consistent with this target.  An additional 576 units will be introduced to the market by the end of the financial year, more than doubling the pool of available units for sale. A further update on condominium preparation and sales progress will be provided alongside the Company's annual results announcement on 29 April 2024.

The portfolio disposal announced on 17 December 2024 has already reduced leverage significantly (net LTV decreased from 46.4% as at 30 June 2024 to 40.0% as at 31 December 2024), with further material reductions expected from future condominium sales.

The Portfolio of assets owned by the Company currently consists of 74 buildings (2,162 units) and  the number of buildings that are currently legally split as condominiums is 60 (1,682 units). However, the Company's current September 2026 debt facility only supports the inclusion of a maximum of 40 buildings (942 units) in the condominium sales pool at any one time, and significantly restricts the use of disposal proceeds, with a primary focus on debt reduction. Work to refinance the Company's existing debt facility is underway with a view to providing greater flexibility over the use of disposal proceeds, as well as increasing the number of buildings that can be made available for condominium sales at any one time.

Annual Results

The Company intends to publish its full-year results for the twelve months to 31 December 2024 on 29 April 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

David Benda

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

Elizabeth Snow
Annushka Shivnani