Buoyant demand for German residential property helped to boost adjusted net asset value (NAV) by more than 6 per cent to 242¢ a share at Phoenix Spree Deutschland (PSDL), and shareholders were rewarded with a near-quarter rise in the half-year dividend.
As a mark of the rapidly growing value of residential assets, the portfolio was boosted by a valuation uplift of €21.7m (£18.6m), well up from €9m the previous year, while rental income grew by 41 per cent to €7.6m. On top of this, there is a significant reversionary element, identified as the difference between current rent and rental income if all rents were marked to market. In fact, new leases were signed at a 26.4 per cent premium to passing rent.
Two properties were acquired for €6.1m in the first half, and a further four have been lined up for the second half at a value of €33.7m. And while it's more usual to rent rather than buy apartments in Germany, five apartments were sold for €1.2m, with a further two lined up for sale later this year. A share placing in March raised €38m, which, along with the valuation uplift, reduced the net loan-to-value ratio from 40.6 per cent to a comfortable 30.8 per cent.
Analysts at Liberum are forecasting rental income for the year to December 2016 of €15.3m and year-end NAV of 251¢ a share (from €12.1m and 228¢ in 2015).
| PHOENIX SPREE DEUTSCHLAND (PSDL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 225p | MARKET VALUE: | £208m | |
| TOUCH: | 220-225p | 12-MONTH HIGH: | 230p | LOW: 149p |
| DIVIDEND YIELD: | 2% | DEVELOPMENT PROPERTIES: | €0.4m | |
| PREMIUM TO NAV: | 15% | NET DEBT: | 49% | |
| INVESTMENT PROPERTIES: | €329m | |||
| Half-year to 30 Jun | Net asset value (¢) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 210 | 9.1 | 13.0 | 1.3 |
| 2016 | 226 | 15.7 | 14.0 | 1.6 |
| % change | +8 | +71 | +8 | +23 |
Ex-div: 29 Sep Payment: 14 Oct £1=€1.15 | ||||
