Shares in Phoenix Spree Deutschland (PSDL) were marked down further after the Berlin Senate approved a five-year rent freeze in the city. Further details around the proposals are expected to emerge in August, but they are likely to face legal challenges from property groups that argue rental legislation is typically determined under federal legislation.
The board said in a statement that it believed “there are serious concerns regarding the constitutionality of the new rent proposals and there is no certainty that these proposals will come into effect”. House broker Liberum notes that the rent freeze would put an end to the business model pursued by groups such as Phoenix Spree, which make money by refurbishing and re-letting residential properties in the city.
