Phoenix Spree Deutschland (PSDL) H1 2024 earnings summary

Executive summary

• Accelerated condominium sales strategy underway, targeting €50m annual sales by 2025, enabled by a key debt facility amendment with Natixis.

• Portfolio value declined 3.3% like-for-like in H1 2024, but the rate of decline slowed versus prior periods; tentative signs of market recovery noted.

• Record low EPRA vacancy at 1.4% and strong rental growth, with new leases signed at a 33% premium to passing rents.

• 15 condominiums notarised for €5.3m in H1 2024, a 161% increase year-over-year, with sales at a 23% premium to portfolio valuation.

• No interim dividend declared for H1 2024; focus remains on debt reduction and capital allocation to optimise asset values.

Financial highlights

• Gross rental income rose to €14.2m (H1 2023: €13.8m); loss before tax narrowed to €24.1m (H1 2023: €58.0m), mainly due to lower revaluation losses.

• EPRA NTA per share fell 7% to €3.68 (31 Dec 2023: €3.96); IFRS NAV per share at €3.22.

• Net LTV at 46.4% (31 Dec 2023: 46.3%); net debt reduced to €300.1m.

• Annualised net rental income up 3.4% year-over-year; like-for-like rent per sqm growth of 3.2%.

• Property expenses fell 13.1% year-over-year, driven by a 34% reduction in Property Advisor fees.

Outlook and guidance

• Condominium sales prices expected to remain at a significant premium to rental building values and portfolio book value.

• Cash from asset sales will be used to pay down debt and fund targeted capex; surplus capital may be distributed to shareholders after refinancing Natixis facility (targeted before Sep 2026).

• Rental business outlook remains positive, supported by structural supply-demand imbalances and the new Mietspiegel rent table.