Phoenix Spree Deutschland Ltd
(The "Company" or "PSDL")
UPDATE ON NON-CORE DISPOSALS AND ACQUISITIONS
Phoenix Spree Deutschland (LSE: PSDL.LN), the UK listed investment company specialising in German residential real estate, is pleased to announce that it has exchanged contracts to sell a portfolio of 34 properties located in Central and Northern Germany (the "Disposal") for an aggregate cash consideration of €73.0m. On completion of the Disposal, and including further acquisitions and disposals notarised since 30 June 2017, Berlin is expected to represent over 99% of the Company's Portfolio by value.
Highlights:
· The Disposal value represents a 26% premium to the 30 June 2017 Jones Lang LaSalle valuation
· Proceeds will be used to reduce debt, fund further acquisitions in Berlin and invest in the existing portfolio
· Further non-core disposals with an aggregate value of €6.7m have been notarised since 30 June 2017, at above book value
· Aggregate disposal proceeds are expected to have a positive impact on EPRA NAV after transaction costs and taxes
· Acquisition of 10 Berlin properties with an aggregate value of €36.5m have been notarised since 30 June 2017
· Following completion of all transactions notarised to date, PSDL will effectively become a pure play Berlin fund. The Board is convinced that the Berlin market remains highly attractive and offers significant potential to develop the Company's business further
Disposals
The non-core portfolio being sold by the Company for a total consideration of €73.0m comprises 34 properties located in Bremen, Hannover, Hildesheim, Verden, Delmenhorst, Kiel, Oldenburg, Lüneburg and Lübeck. These buildings were acquired in 2006/2007 for an aggregate purchase price of € 38.7m and the sale price represents a 26% premium to the Jones Lang LaSalle valuation as at 30 June 2017.
Additionally, since 30 June 2017, a further four properties located in Central & North Germany have been notarised for sale for a combined consideration of €6.7m, 11% above the 30th June 2017 book value.
The combined proceeds from disposals of €79.7m are expected to have a positive impact on EPRA NAV, after transaction costs and taxes, and will be used to pay down debt and invest in the scale and quality of the portfolio.
Acquisitions
The Company has also notarised the acquisition of 10 Berlin properties for an aggregate purchase price of €36.5m. In aggregate, they represent 235 residential and 7 commercial units, with a purchase price per square metre of €2,358. The final two acquisitions are expected to complete in 1Q 2018, and it is anticipated that the 10 properties together will increase the Fund's rental income by around 6.5%.
Berlin focussed fund
Following completion of all acquisitions and disposals notarised to date, Berlin is expected to represent over 99% of the Company's portfolio value on a pro-forma basis, effectively becoming a pure play on Berlin residential, its positive demographics and attractive growth prospects.
Phoenix Spree Deutschland was advised on the transactions by PMM Partners (UK) Ltd, property advisor to the Company.
Jörg Schwagenscheidt, Chief Executive of PMM Partners Germany GmbH, commented:
"The transactions announced today are a step forward in our strategy of focusing on and growing the Company's portfolio in Berlin. The disposals will strengthen the balance sheet and enable further accretive acquisitions which fulfil the Company's strict investment criteria and enhance the long term value of the Company."
The Company expects to announce its year-end 2017 valuation for the Portfolio of investment properties held by the Company in the final week of January 2018.
For further information please contact:
Phoenix Spree Deutschland Stuart Young |
+44 (0)20 3937 8760 |
Liberum Capital Limited (Corporate Broker) Richard Crawley Christopher Britton |
+44 (0)20 3100 2222 |
Tulchan Communications (Financial PR) Tom Murray Elizabeth Snow |
+44 (0)20 7353 4200 |
