Berlin-focused real estate group Phoenix Spree Deutschland (PSDL) has launched a share buyback programme, after floating the move last month. Flush from a refinancing deal on better terms and an acceleration in condominium sales – achieved at an average 21.6 per cent premium to their half-year carrying book value – the group is buying up to 10 per cent of its outstanding stock in a bid to close its market discount to net asset value (NAV).
As investors are by this point aware, that discount sharpened earlier this summer, after proposed changes to the German capital’s rent laws hammered the share price. Phoenix Spree and its legal advisers view the possible rent caps – which would suppress the value of the group’s portfolio if unaltered – unlawful and unconstitutional, as German residential tenant laws are governed by Federal and not State legislation.
According to local media reports, some Berlin lawmakers are reportedly opposed to one proposal, which would allow existing tenants to apply for rent reductions in certain circumstances.
