TIDMPSDL

RNS Number : 0734B

Phoenix Spree Deutschland Limited

29 September 2022

Phoenix Spree Deutschland Limited

(the "Company" or "PSD")

Interim Results for the half-year to 30 June 2022

Phoenix Spree Deutschland (LSE: PSDL.LN), the specialist investor in Berlin residential real estate, announces its Interim Results for the six months ended 30 June 2022.

Financial Summary

 
 EUR million (unless otherwise      Six months   Six months    12 months     12 months 
  stated)                             to June      to June     to December   to December 
                                        2022         2021         2021          2020 
Gross rental income                    13.0         12.9          25.8          23.9 
                                    -----------  -----------  ------------  ------------ 
Profit before tax                      17.0         20.4          45.3          37.9 
                                    -----------  -----------  ------------  ------------ 
Dividend (EUR cents (GBP pence))    2.35 (2.09)  2.35 (2.02)  7.50 (6.30)   7.50 (6.62) 
                                        (1) 
                                    -----------  -----------  ------------  ------------ 
 
Portfolio valuation(2)                 820.1        777.7        801.5         768.3 
                                    -----------  -----------  ------------  ------------ 
EPRA NTA per share (EUR)               5.72         5.42          5.65          5.28 
                                    -----------  -----------  ------------  ------------ 
EPRA NTA per share (GBP)(3)            4.92         4.66          4.74          4.76 
                                    -----------  -----------  ------------  ------------ 
EPRA NTA per share total return 
 (EUR per cent)                         2.2          3.6          8.4           8.8 
                                    -----------  -----------  ------------  ------------ 
Net LTV (per cent)(4)                  36.0         33.7          34.7          33.1 
                                    -----------  -----------  ------------  ------------ 
 
Portfolio valuation per sqm (EUR)      4,318        4,075        4,225         3,977 
                                    -----------  -----------  ------------  ------------ 
Annual like-for-like rent per 
 sqm growth (per cent)                  3.7          4.6          3.9          (15.8) 
                                    -----------  -----------  ------------  ------------ 
EPRA Vacancy (per cent)                 2.5          1.3          3.1           2.1 
                                    -----------  -----------  ------------  ------------ 
Condominium sales notarised             3.0          4.3          15.2          14.6 
                                    -----------  -----------  ------------  ------------ 
 

(1-GBP:EUR FX rate locked in at 1:1.124 as at 28 September 2022.)

(2 -Portfolio valuation includes investment properties under construction.)

(3-GBP:EUR FX rate 1:1.162 as at 30 June 2022.)

(4- Net LTV uses nominal loan balances as per note 17 rather than the loan balance on the Consolidated Statement of Financial Position which consider Capitalised Finance Arrangement Fees in the balance.)

Further increase in rental and portfolio values during H1 2022

-- EPRA NTA per share up 1.2 per cent in H1 2022 to EUR5.72; EPRA NTA per share total return of 2.2 per cent.

-- Including investment properties under construction worth EUR7.7m, the Portfolio was valued at EUR820.1 million, a 2.3 per cent increase versus 31 December 2021.

-- Like-for-like Portfolio value, adjusted for acquisitions and disposals, increased by 2.2 per cent in H1 2022.

-- Like-for-like rental income per sqm increased by 3.7 per cent versus prior year, down from 4.6 per cent in H1 2021, mainly reflecting re-letting mix effects, which have subsequently normalised.

Strong Balance Sheet, completion of new loan facility and refinancing

   --   Net LTV remains conservative at 36.0 per cent (31 December 2021: 34.7 per cent). 
   --   New EUR60 million loan facility agreed with Natixis and announced on 25 January 2022. 

-- Successful refinancing of EUR49.7 million of Berliner Sparkasse debt, with EUR13.7 million of cash released at 28 September 2022.

-- Company's interest rate hedging policy has seen cash borrowing costs decline, despite rising long term rates.

   --   Company's first loan maturity is not due until September 2026. 

Continued strong demand for Berlin residential rental property

-- 148 new leases in Berlin signed during H1 2022 at an average rent of EUR13.2 per sqm and 33.7 per cent premium to passing rents.

-- EUR6.2 million invested across the Portfolio (30 June 2021: EUR2.7million), continuing to improve the quality of accommodation for tenants and supporting reversionary rental strategy.

-- EPRA vacancy of 2.5 per cent remains at historically low level, reflecting ongoing structural undersupply of available rental property.

-- All furnished apartments made available for refugees impacted by the Ukraine crisis for a rent-free period have now been fully let.

Actively managing the Portfolio

-- Forward purchase in H1 of 17 new-build, semi-detached, residential properties (34 houses) for a total agreed purchase price of EUR18.5 million, four multi-family houses consisting of 24 residential units for a purchase price of EUR6.3million.

   --   Post-period end, acquisition of 25 residential units for a purchase price of EUR4.9million. 
   --   All acquisitions fully financed using Natixis acquisition facility. 

-- Since period-end, contracts notarised to sell two non-core properties for an aggregate consideration of EUR8.6 million.

Condominium sales at a premium to book value

   --   Condominium sales notarised during H1 2022 of EUR3.0 million, (H1 2021 EUR4.3million). 

-- Average achieved value per sqm of EUR5,257 for residential units, a gross premium of 19.2 per cent to the 31 December 2021 book value of each property.

   --   75.8 per cent of Portfolio assets legally split into condominiums as at 30 June 2022. 

-- Sales slowdown reflects increases in the cost of living, higher borrowing costs and economic uncertainty.

Further value delivered through share buy-backs and dividend

   --   Unchanged interim dividend of EUR2.35 cents per share. 

-- During the half year ended 30 June 2022, the Company bought back a further 930,509 ordinary shares, representing 0.9 per cent of the ordinary shares in issue, for a total consideration of GBP3.3 million.

-- Since share buybacks commenced in 2019, including the interim dividend for 2022 and bought-back shares held in treasury, EUR63.4 million has been returned to shareholders.

Outlook

   --    Supply-demand imbalances within the Berlin PRS provide support to rental values: 

o Rising cost of home ownership forcing potential buyers to remain within the rental system for longer.

o Urban housing shortage further exacerbated by anticipated net inward migration of almost one million from Ukraine to Germany.

o Rising cost of construction further limiting new-build completions.

   --   Reversionary potential within Portfolio underpins future rental growth: 

o New letting rental values expected to remain at a significant premium to average in-place rents across the Portfolio.

   --   Disposals and balance sheet 

o The Company will continue to review its portfolio of assets to ascertain the potential for disposals of condominiums and other buildings that are deemed to be non-core.

o The Board considers the current level of gearing and cash balances to be appropriate at this stage in the real estate cycle and does not intend to materially increase debt levels until such time as the market outlook becomes more stable.

o The Company will continue to keep its cash commitments under close review, and will prioritise continued investment in the existing Portfolio, where appropriate, and dividend payments to shareholders.

o To the extent that the Board considers it prudent to do so, any excess proceeds from disposals will be made available for share buybacks.

Robert Hingley, Chairman of Phoenix Spree Deutschland commented:

"The first six months of the financial year were characterised by significant market disruption caused by the combined effects of global inflationary pressures, rising interest rates and the ongoing conflict in Ukraine. Against this backdrop, it is pleasing that the Portfolio was able to deliver further valuation gains during the first half of the financial year.

Although financial market conditions have become significantly more challenging, demographic trends within the Berlin market remain positive, with a significant undersupply of private rental property. Affordability comparisons with other German cities remain favourable and the reversionary potential that exists within the Portfolio should continue to support rental values."

For further information, please contact:

 
Phoenix Spree Deutschland Limited 
 Stuart Young                                 +44 (0)20 3937 8760 
Numis Securities Limited (Corporate Broker) 
 David Benda 
                                              +44 (0)20 3100 2222 
 Tulchan Communications (Financial PR) 
 Elizabeth Snow 
 Laura Marshall                                +44 (0)20 7353 4200 
 

CHAIRMAN'S STATEMENT

I am pleased to report that, during the first half of the financial year, PSD has delivered further increases in property and rental values. As at 30 June 2022, the Portfolio, excluding investment property under construction, was valued at EUR812.4 million by Jones Lang LaSalle GmbH, a like-for-like increase of 2.2 per cent since 31 December 2021. The Euro EPRA NTA total return per share stood at 2.2 per cent with the sterling return at 4.8 per cent.

The Board is pleased to declare an unchanged interim dividend of 2.35 cents per share (2.09 pence per share) for the first half of the year (six months to 30 June 2021: 2.35 cents, 2.02 pence). The dividend is expected to be paid on or around 28 October 2022 to shareholders on the register at the close of business on 7 October 2022, with an ex-dividend date of 6 October 2022.

Working with our tenants

At times of economic stress, it is even more important that we work closely with our tenants, just as we did during the dual challenges presented by the COVID-19 pandemic and the Mietendeckel. Now, with inflationary pressures and a rising cost of living impacting most European economies, the health and wellbeing of our tenants remains foremost in our minds.

Our thoughts remain with those impacted by war in Ukraine. In response to the humanitarian crisis the war has caused, PSD has made available a number of furnished apartments on a rent-free basis for refugees and I am pleased to report that these have now been fully let. We will continue to work constructively with those in greatest need wherever we can.

Investing in our tenanted accommodation

Following the removal of the Mietendeckel, which specified rent levels well below free market levels, the Company resumed its programme of investment to improve the overall standard of our tenanted accommodation. During the first half of the financial year 48.1 per cent of the Company's gross revenues were reinvested into the Portfolio and it is anticipated that this high level of investment will continue.

Protecting our environment

The Board recognises that the nature of our business has environmental and social impacts and that we have a responsibility to consider and minimise these impacts, where possible. As a member of EPRA, we want to contribute to greater transparency in reporting. To this end, we have strengthened our commitment to delivering against our environmental and social impacts by introducing EPRA's Sustainability Best Practices Recommendations and capturing our ESG measurements within their framework.

I am therefore delighted to report that this commitment has been recognised in the EPRA Sustainability Awards 2022, with PSD receiving a Gold award in recognition of the Company's commitment to best practice in its reporting. This recognition further encourages us to continue to approach the future in a consistent, ethical, safe and environmentally friendly way.

Our charitable initiatives

The Company has continued with its programme of financial support to two Berlin focussed charities, The Intercultural Initiative and Laughing Hearts. The Intercultural Initiative is a Berlin refuge that helps women and children affected by domestic violence. Laughing Hearts supports children living in children's homes and social care.

QSix, our Property Advisor, has also continued to support two charities in London, SPEAR and SHP, both working with homeless people. Funding is given to SPEAR to run an outreach service, providing accommodation to rough sleepers and helping with their health and wider social care problems. SHP supports an employability programme that assists homeless people or those at high risk of becoming homeless with finding a job and securing a sustainable income.

Our Board

We are all deeply saddened by the recent death of Greg Branch, and I would like to reiterate our sincere thanks for his exemplary service during his time in office. Greg had served on the Company Board since 2020, bringing a wealth of experience from a distinguished career spanning over 30 years in the financial services and real estate sectors. He will be sorely missed as a colleague and friend to the current and previous Directors of the Company, investment professionals at QSix, and by those in the wider business community who were privileged to work with him.

As previously announced, Isabel Robins joined the Board of PSD as a non-executive Director with effect from 14 March 2022. Mrs Robins has over 23 years' experience of complex offshore real estate structures, encompassing a broad range of property funds, investments, and developments. Her real estate experience and insight will add a valuable perspective to complement and enhance the skill set of the Board. Mrs Robins replaces Monique O'Keefe, who stepped down as a Senior Independent Director to take up a senior executive position at another company.

The Board is in the process of commissioning a search for a new Non-Executive Director.

Disposals and balance sheet

With its strong balance sheet and conservative debt financing, PSD is well positioned to withstand more challenging economic and financial market conditions. Demographic trends within the Berlin market remain positive and will continue to support future rental values. This, combined with a high level of investment into our buildings, underpins the future reversionary potential that exists within the Portfolio.

The Company recognises that PSD's share price remains at a material discount to EPRA NTA and, since the commencement of the Company's share buyback programme in October 2019, 8.9 per cent of ordinary shares in issue have been repurchased. The Board considers the current level of gearing and cash balances to be appropriate at this stage in the real estate cycle and will not look to increase debt levels until such time as the market outlook becomes more stable. The Company will continue to keep its cash commitments under close review, and will prioritise continued investment in the existing Portfolio, where appropriate, and dividend payments to shareholders. To the extent that the Board considers it prudent to do so, any excess proceeds from disposals will be made available for share buybacks.

REPORT OF THE PROPERTY ADVISOR

Financial results

Table: Financial highlights for the six-month period to 30 June 2022

 
 EUR million (unless otherwise          6 months        6 months         Year         Year 
  stated)                           to 30-Jun-22    to 30-Jun-21           to           to 
                                                                    31-Dec-21    31-Dec-20 
 Gross rental income                        13.0            12.9         25.8         23.9 
                                  --------------  --------------  -----------  ----------- 
 Investment property fair 
  value gain                                11.4            16.0         38.0         41.5 
                                  --------------  --------------  -----------  ----------- 
 Profit before tax (PBT)                    17.0            20.4         45.3         37.9 
                                  --------------  --------------  -----------  ----------- 
 EPS (EUR)                                  0.15            0.17         0.39         0.31 
                                  --------------  --------------  -----------  ----------- 
 Investment property value                 820.1           777.7        801.5        768.3 
                                  --------------  --------------  -----------  ----------- 
 Net debt(1)                               295.6           261.8        278.0        254.4 
                                  --------------  --------------  -----------  ----------- 
 Net LTV (per cent)(1)                      36.0            33.7         34.7         33.1 
                                  --------------  --------------  -----------  ----------- 
 IFRS NAV per share (EUR)                   4.84            4.54         4.74         4.48 
                                  --------------  --------------  -----------  ----------- 
 IFRS NAV per share (GBP)(2)                4.17            3.90         3.98         4.04 
                                  --------------  --------------  -----------  ----------- 
 EPRA NTA per share (EUR)                   5.72            5.42         5.65         5.28 
                                  --------------  --------------  -----------  ----------- 
 EPRA NTA per share (GBP)(2)                4.92            4.66         4.74         4.76 
                                  --------------  --------------  -----------  ----------- 
 Dividend per share (EUR cents)             2.35            2.35          7.5          7.5 
                                  --------------  --------------  -----------  ----------- 
 Dividend per share (GBP pence) 
  (3)                                       2.09            2.02         6.27         6.75 
                                  --------------  --------------  -----------  ----------- 
 EPRA NTA per share total 
  return for period (EUR per 
  cent)                                      2.2             3.6          8.4          8.8 
                                  --------------  --------------  -----------  ----------- 
 EPRA NTA per share total 
  return for period (GBP per 
  cent)                                      4.8           (1.1)          1.0         16.0 
                                  --------------  --------------  -----------  ----------- 
 

(1 - Net LTV and net debt uses nominal loan balances as per note 17 rather than the loan balances on the Consolidated Statement of Financial Position which consider Capitalised Finance Arrangement Fees in the balance as per IAS 23.)

(2 - GBP:EUR FX rate 1:1.162 as at 30 June 2022)

(3 - GBP:EUR FX rate locked in at 1:1.124 as at 28 September 2022.)

Revenue for the six-month period was EUR13.0 million (six months to 30 June 2021: EUR12.9 million). Profit before taxation was EUR17.0 million (six months to 30 June 2021: EUR20.4 million), the principal component of which was a revaluation gain of EUR11.4 million (30 June 2021: EUR16.0 million).

Reported earnings per share for the period were 15 cents (six months to 30 June 2021: 17 cents).

Reported EPRA NTA per share rose by 1.2 per cent in the first half of 2022 to EUR5.72 (GBP4.92) (31 December 2021: EUR5.65 (GBP4.74)). After taking into account the 2021 final dividend of 5.15 cents (4.36 pence), which was paid in June 2022, the EUR EPRA NTA total return in the first half of 2022 was 2.2 per cent (H1 2021: 3.6 per cent). The GBP EPRA NTA total return for the same period was 4.8 per cent, reflecting the weakening of the GBP against the EUR in the first six months of the year.

Like-for-like portfolio value increase of 2.2 per cent

Pricing in the Berlin residential property market has remained broadly stable in the first half of the financial year. The second half to date has seen a material deterioration in buyer sentiment and, consequently, transaction volumes. With financial markets experiencing record volatility, the outlook for the German property market in the second half is uncertain.

As at 30 June 2022, the Portfolio, including investment properties under construction, was valued at EUR820.1 million (31 December 2021: EUR801.5 million). This represents a 2.3 per cent increase over the six-month period. On a like-for-like basis, excluding the impact of acquisitions and disposals, the Portfolio value increased by 2.2 per cent during the first half of the financial year and 6.0 per cent versus the first half of the prior year. This reflects an increase in rental values, improvements in the micro locations of certain Portfolio assets, investments in the Brandenburg asset and completion of the condominium splitting process in one building.

Table: Portfolio valuation and breakdown

 
                                   30-Jun-22   30-Jun-21   31-Dec-21   31-Dec-20 
 Total sqm ('000)                      188.2       190.8       189.7       193.2 
                                  ----------  ----------  ----------  ---------- 
 Valuation (EUR million)               820.1       777.7       801.5       768.3 
                                  ----------  ----------  ----------  ---------- 
 Like-for-like valuation growth 
  (per cent)                             2.2         2.5         6.3         6.3 
                                  ----------  ----------  ----------  ---------- 
 Value per sqm (EUR) (1)               4,318       4,075       4,225       3,977 
                                  ----------  ----------  ----------  ---------- 
 Fully occupied gross yield 
  (per cent)                             2.8         2.9         2.8         2.4 
                                  ----------  ----------  ----------  ---------- 
 Number of buildings                      95          97          97          98 
                                  ----------  ----------  ----------  ---------- 
 Residential units                     2,554       2,586       2,569       2,618 
                                  ----------  ----------  ----------  ---------- 
 Commercial units                        136         139         138         139 
                                  ----------  ----------  ----------  ---------- 
 Total units                           2,690       2,725       2,707       2,757 
                                  ----------  ----------  ----------  ---------- 
 

(1 - Excludes Investment property under construction.)

The valuation represents an average value per square metre of EUR4,318 (31 December 2021: EUR4,225), at a gross fully occupied yield of 2.8 per cent (31 December 2021: 2.8 per cent). Included within the Portfolio valuation are six properties valued as condominiums, with an aggregate value of EUR32.8 million (31 December 2021: eight properties, aggregate value EUR38.8 million).

Like-for-like rental income per square metre growth of 3.7 per cent

After considering the impact of acquisitions and disposals, like-for-like rental income per square metre grew 3.7 per cent compared with 30 June 2021. Gross in-place rent was EUR9.8 per sqm as at 30 June 2022, an increase of 3.5 per cent compared with 30 June 2021 and an increase of 1.9 per cent on 31 December 2021.

Table: Rental income and vacancy rate

 
                            30-Jun-22   30-Jun-21   31-Dec-21   31-Dec-20 
 Total sqm ('000)               188.1       190.8       189.7       193.2 
                           ----------  ----------  ----------  ---------- 
 Gross in place rent per 
  sqm (EUR)                       9.8         9.5         9.6         9.3 
                           ----------  ----------  ----------  ---------- 
 Like-for-like rent per 
  sqm growth                      3.7         4.6         3.9         4.1 
                           ----------  ----------  ----------  ---------- 
 Vacancy (per cent)               7.0         7.7         8.4         6.8 
                           ----------  ----------  ----------  ---------- 
 EPRA Vacancy per cent 
  (per cent)                      2.5         1.3         3.1         2.1 
                           ----------  ----------  ----------  ---------- 
 

EPRA vacancy remains at historically low levels

Reported vacancy as at 30 June 2022 was 7.0 per cent (30 June 2021: 7.7 per cent). On an EPRA basis, which adjusts for units undergoing development and made available for sale, the vacancy rate was 2.5 per cent (30 June 2021: 1.3 per cent). The rise in vacancy was due to an increased number of newly modernised apartments being made available for rental following the removal of the Mietendeckel. Notwithstanding this increase, EPRA vacancy remains low from a historical perspective and is likely to remain so given the ongoing supply demand imbalance for rental property in Berlin.

Berlin reversionary re-letting premium of 33.7 per cent

During the six months to 30 June 2022, 174 new leases were signed, representing a letting rate of approximately 7.3 per cent of occupied units. The average rent achieved on all new lettings was EUR12.7 per sqm, an 8.5 per cent increase on the prior year, and an average premium of 28.4 per cent to passing rents. This compares to a 23.5 per cent premium in the six month period to 30 June 2021.

The reversionary premium is negatively impacted by the inclusion of re-lettings from the acquisition in Brandenburg in 2020, where rents are lower than those achieved in central Berlin. Looking solely at the Berlin portfolio, which represents 90.7 per cent of total residential lettable space, the reversionary premium achieved was 33.7 per cent, down from 35.8 per cent in the prior period.

Limited impact from COVID-19 on rent collection

The prolonged duration of the COVID-19 outbreak and the further restrictions it has caused in early 2022 have had a limited impact on rent collection levels with over 98.4 per cent of rents due collected during the first six months of the financial year.

Where appropriate, PSD continues to support its tenants, both residential and commercial, by agreeing, on a case-by-case basis, the payment of monthly rents or deferring rental payments. In addition, PSD has in place a Vulnerable Tenant Policy which it will continue to monitor and apply to relevant tenants.

Investment in the Portfolio

During the first half of 2022, a total of EUR6.2 million was invested across the Portfolio (H1 2021: EUR2.7 million). These items are recorded as capital expenditure in the Financial Statements. A further EUR0.9 million was spent on maintaining the assets and is expensed through the profit and loss account.

The increase in capital expenditure reflects the ruling against the Mietendeckel as projects which had been postponed or cancelled pending a final ruling on the legality of the Mietendeckel are reinstated.

Table: EPRA Capital Expenditure

(All figures in EUR'000 unless otherwise stated)

 
                              30-Jun-22   30-Jun-21   31-Dec-21   31-Dec-20 
 Acquisitions                         0           0           0           0 
                             ----------  ----------  ----------  ---------- 
 Like-for-like portfolio          1,769       2,486       4,674       3,645 
                             ----------  ----------  ----------  ---------- 
 Development                      4,288         101       4,406         274 
                             ----------  ----------  ----------  ---------- 
 Other                              178         143         397         252 
                             ----------  ----------  ----------  ---------- 
 Total Capital Expenditure        6,234       2,729       9,477       4,171 
                             ----------  ----------  ----------  ---------- 
 

Acquisitions and disposals

On 21 March 2022, the Company announced that it has exchanged contracts to forward fund 17 new-build, semi-detached, residential properties (34 units) for a total agreed purchase price of EUR18.5 million, with construction expected to complete in the second half of 2024. The price paid of EUR4,323 per sqm represents an estimated prospective gross yield of 3.5 per cent and the projected fully occupied rental income generated by the property is EUR652,670 per annum, equivalent to 3.2 per cent of the Portfolio gross in-place rent as at 31 December 2021.

On 5 May 2022, the Company exchanged contracts to acquire four multi-family houses consisting of 24 residential units for a purchase price of EUR6.3million. These properties are located in Hoppegarten and Neuenhagen, Berlin. Built in 1995 and 1998, they are in good technical condition and offer significant reversionary potential, having benefited from recent positive demographic changes.

On 22 September 2022, the Company exchanged contracts to acquire a multi-family house with 22 residential units and 3 commercial units for EUR4.9million. This property is located in Berlin-Neukölln, is well maintained, and offers significant reversionary and attic potential.

All three acquisitions will be fully financed using the new loan facility recently agreed with Natixis, announced in January 2022.

Since the beginning of the financial year, the Company has been actively exploring options for the disposal of buildings deemed to be non-core. Typically, these buildings will have a mature tenant structure with limited scope for further capital expenditure and subsequent reversionary re-letting.

Since the half-year end, the Company has exchanged contracts to sell two non-core properties for an aggregate consideration of EUR8.6million, a narrow discount to last JLL valuation of EUR8.8million as at 30 June 2022. These buildings were acquired in 2008 and 2017 respectively, for an aggregate purchase price of EUR3.9million.

The first of the two properties is an existing Altbau building combined with an ongoing construction project of an additional apartment block located within its footprint. The existing building, which was fully split in the land register, is located in a Milieuschutzgebiet area. The second property is a smaller building, with a significant commercial component and mature residential tenant structure.

Condominium sales at a 19.2 per cent premium to book value

PSD's condominium strategy involves the division and resale of selected properties as single apartments. This is subject to full regulatory approval and involves the legal splitting of the freeholds in properties that have been identified as being suitable for condominium conversion.

During the first half of 2022, nine condominiums units were notarised for sale for an aggregate value of EUR3.0 million (H1 2021: EUR4.3 million).

Condominium notarisations during the second quarter of 2022 have been negatively impacted by concerns over increases in the cost of living, higher borrowing costs and uncertainty surrounding the macro-economic environment, including the impact of the crisis in Ukraine. These factors have led to a deterioration in buyer sentiment and reduced investment volumes.

The average achieved notarised value per sqm for the residential units was EUR5,257, representing a gross premium of 19.2 per cent to book value and 21.8 per cent to PSD's average Berlin residential portfolio value as at 30 June 2022.

Since the half year reporting date, the Company has notarised for sale a further 2 condominium units with total value EUR1.0 million and at a price per square metre of EUR6,236. This represents a gross premium of 33.0 per cent to book value and 44.4 per cent to the average residential portfolio value as at 30 June 2022.

As at 28 September 2022, 75.8 per cent of the Portfolio had been registered as condominiums, providing opportunities for the implementation of further sales projects where appropriate. A further 9.5 per cent are in application, over half of which are in the final stages of the process. This provides PSD with additional strategic flexibility to respond to changes in market conditions.

Recent Federal Government legislation has placed significant restrictions on the ability of landlords to split their properties into condominiums in the future. Reflecting this, there can be no guarantee that applications which are currently in process will complete. The legislation is, however, not retrospective and does not impact assets that have already been split into condominiums. Moreover, these measures will inevitably increase the scarcity of condominiums available for sale in the future, further exacerbating the supply-demand imbalance which currently exists.

Condominium construction

After the overturning of the Mietendeckel, a condominium construction project commenced in an existing asset bought in 2007. The project involves building out the attic and renovating existing commercial units to create seven new residential units. Construction on this project started in the second half of 2021, and the first units are projected to be available in the second half of 2022. The total construction budget for this project is EUR3.8 million.

The Company also has building permits to renovate attics in 19 existing assets to create a further 45 units for sale as condominiums or as rental stock.

Debt and gearing

As at 30 June 2022, PSD had nominal borrowings of EUR305.1 million (31 December 2021: EUR288.4 million) and cash balances of EUR9.6 million (31 December 2021: EUR10.4 million), resulting in net debt of EUR295.5 million (31 December 2021: EUR278.0 million) and a net loan to value on the Portfolio of 36.0 per cent (31 December 2021: 34.7 per cent).

The change in gross debt in the period results from the additional drawdown of debt, including borrowings for further capex on existing and development buildings plus a tranche of the new build acquisition, offset partly by repayments of debt on the sale of condominiums alongside amortisation of debt held with Berliner Sparkasse.

Nearly all PSD's debt effectively has a fixed interest rate through hedging. As at 30 June 2022, the blended interest rate of PSD's loan book was 2.1 per cent (31 December 2021: 2.0 per cent). The average remaining duration of the loan book at 31 December 2021 had decreased to 4.3 years (31 December 2021: 4.9 years).

Outlook

During recent months there has been a significant change in investor and consumer confidence in reaction to inflationary pressures, consequential interest rate rises, expectations for future global central bank monetary policy and economic growth. This has further been impacted by the ongoing conflict in Ukraine. Although PSD's share price has significantly outperformed its listed German residential peers during the first half of the financial year, these circumstances have created a degree of uncertainty across global equity markets from which PSD has not been immune.

Whilst rental values should continue to be supported by industry fundamentals, there has been a material deterioration in buyer sentiment since the beginning of the year. For PSD, this has been evident in condominium sales and, to the extent that the key drivers of weaker buyer sentiment (higher mortgage rates, and a higher cost of living) are unlikely to reverse during the second half of the year, it is anticipated that condominium sales for the full year 2022 will be materially lower than 2021.

At the institutional level, investor appetite for real assets has also weakened. A higher cost of funding has seen a reduction in investor demand for larger portfolio transactions, and there is sufficient anecdotal evidence to suggest that pricing has weakened. In parallel with this, a number of larger market participants are now net sellers of assets as they seek to reduce leverage from levels that are currently significantly higher than at PSD.

Against this backdrop, PSD is well positioned to withstand more challenging market conditions. With a net LTV of 36.0 per cent, the Company's balance sheet remains strong, with an average remaining duration of the loan book exceeding four years. None of the Company's debt reaches maturity until September 2026. Moreover, following a transition away from negative rates, the Company's interest rate hedging policy has seen cash borrowing costs decline, despite rising long term rates.

The Company will continue to review the portfolio of assets to ascertain the potential for disposals of buildings that are deemed to be non-core. Two buildings have already been notarised for sale, and further potential non-core disposals are currently under consideration.

Whilst there is now evidence of yields rising in certain segments of the German residential market, supply-demand imbalances within the Berlin PRS market should continue to support rental values. An increase in the cost of home ownership is likely to place further pressure on the significant shortage of housing that already exists in Berlin, as potential buyers remain within the rental system for longer. This shortage has been further exacerbated by the migration of almost one million refugees into Germany from Ukraine.

Additionally, higher funding, labour and construction costs present significant headwinds to large-scale new-build construction, a trend which is likely to further limit the future supply of rental accommodation. Future rent growth should therefore continue to be underpinned, and there remains significant future reversionary rental potential across PSD's portfolio of buildings.

The Company recognises the challenges that its customers are facing as a direct consequence of inflation. Notwithstanding current cost-of-living pressures, year-to-date rent collection levels have remained stable. The Company has always managed rent-to-income multiples for new tenants conservatively and this customer demographic, combined with recent Federal support initiatives to help mitigate the financial impact of rising fuel costs, should ensure rent collection levels remain resilient.

Although the current economic backdrop presents near-term headwinds for the German residential real estate industry, the Property Advisor remains confident in the long-term outlook for PSD. Since its inception in 2006, PSD has successfully adapted its business model to accommodate significant changes to the economic and regulatory environment and will continue to respond to the challenges presented by the current economic downturn.

Key Performance Indicators

PSD has chosen a number of Key Performance Indicators (KPIs), which the Board believes will help investors understand the performance of PSD and the underlying property Portfolio.

-- The value of the Portfolio grew by 2.2 per cent on a like-for-like for basis for the first half of the year (H1 2021: 2.5 per cent). This increase was driven a like-for-like average rent per let sqm of 3.7 per cent (H1 2021: 4.6 per cent).

   --   The EPRA vacancy of the Portfolio stood at 2.5 per cent (31 December 2021: 1.3 per cent). 

-- The Group continued with its targeted condominium programme, notarising sales of EUR3.0 million in the half year to 30 June 2022 (H1 2021: EUR4.3 million).

-- EPRA NTA per share increased by 1.2 per cent to EUR5.72 as at 30 June 2022 (31 December 2021: EUR5.65).

   --   The declared dividend for the half year 2022 was EUR2.35 cents (GBP2.09 pence) per share. 

Statement of Directors' responsibilities

The important events that have occurred during the period under review, the key factors influencing the condensed consolidated financial statements and the principal factors that could impact the remaining six months of the financial year are set out in the Chairman's Statement and the Property Advisor Report.

Since the date of the Annual Report for the year ended 31 December 2021, capital and investment markets have reacted negatively to inflationary pressures, rising interest rates and economic uncertainty more generally.

As stated above, there has been a material deterioration in sentiment in the Berlin real estate market. Other principal risks considered are substantially unchanged since the date of the Annual Report for the year ended 31 December 2021, and continue to be as set out in that report. These include, but are not limited to:

   --     Financial and economic risk 
   --     Market risk 
   --     Inflationary risk 
   --     Tenant, letting and political risk 
   --     Outsourcing risk 
   --     IT and Cyber Security risk 
   --     Regulatory risk 

The Directors confirm that, to the best of their knowledge:

-- The condensed set of financial statements contained within this half yearly financial report have been prepared in accordance with International Accounting Standard ("IAS") 34 'Interim Financial Reporting' and gives a true and fair view of the assets, liabilities, financial position and profit of the Group; and

-- The half yearly financial report includes a fair review of the information required by the FCA's Disclosure and Transparency Rule 4.2.7R being disclosure of important events that have occurred during the first six months of the financial year, their impact on the condensed set of financial statements and a description of the principal risks and uncertainties for the remaining six months of the year; and

-- The half yearly financial report includes a fair review of the information required by the Disclosure and Transparency Rule 4.2.8R being disclosure of related party transactions during the first six months of the financial year, how they have materially affected the financial position of the Group during the period and any changes therein.

The half yearly financial report was approved by the Board on 28 September 2022 and the above responsibility statement was signed on its behalf by:

Director

28 September 2022

 
Condensed Consolidated Statement 
 of Comprehensive Income 
For the period from 1 
 January 2022 to 30 June 
 2022 
 
 
                                                                               Six           Six 
                                                                            months        months        Year 
                                                                             ended         ended       ended 
                                                        Notes              30 June       30 June          31 
                                                                              2022          2021    December 
                                                                                                        2021 
                                                                       (unaudited)   (unaudited)   (audited) 
                                                                           EUR'000       EUR'000     EUR'000 
Continuing operations 
 
Revenue                                                                     12,972        12,925      25,790 
Property expenses                                         5                (8,737)       (7,391)    (16,082) 
 
Gross profit                                                                 4,235         5,534       9,708 
 
Administrative expenses                                   6                (1,306)       (1,586)     (3,447) 
Gain on disposal of investment 
 property (including investment 
 property held for sale)                                  7                     88           577       1,518 
Investment property fair 
 value gain                                              10                 11,395        15,987      37,983 
Performance fee due to 
 Property Advisor                                        20                    343             -       (343) 
 
Operating profit                                                            14,755        20,512      45,419 
 
Net finance charge (before gain 
 / (loss) on interest rate swaps)                         8                (3,892)       (3,721)     (7,482) 
Gain / (loss) on interest 
 rate swaps                                               8                  6,089         3,643       7,313 
 
Profit before taxation                                                      16,952        20,434      45,250 
 
Income tax expense                                        9                (2,981)       (4,198)     (7,882) 
 
Profit after taxation                                                       13,971        16,236      37,368 
 
Other comprehensive                                                              -             -           - 
income 
 
Total comprehensive 
 income 
 for the period                                                             13,971        16,236      37,368 
                                                                      ------------  ------------  ---------- 
 
Total comprehensive 
income 
attributable to: 
Owners of the parent                                                        13,891        16,208      37,311 
Non-controlling interests                                                       80            28          57 
                                                                                    ------------ 
                                                                            13,971        16,236      37,368 
                                                                      ------------  ------------  ---------- 
 
Earnings per share attributable 
 to the owners of the parent: 
From continuing 
operations 
Basic (EUR)                                              22                   0.15          0.17        0.39 
Diluted (EUR)                                            22                   0.15          0.17        0.39 
                                                                      ------------  ------------  ---------- 
 
 
 
 
 
 
 
 
 
Condensed Consolidated Statement 
 of Financial Position 
At 30 June 2022 
 
 
                                                                             As at         As at       As at 
                                                        Notes              30 June       30 June          31 
                                                                              2022          2021    December 
                                                                                                        2021 
                                                                       (unaudited)   (unaudited)   (audited) 
                                                                           EUR'000       EUR'000     EUR'000 
ASSETS 
 
Non-current assets 
  Investment properties                                 12,14              779,290       763,960     759,830 
  Property, plant and equipment                                                 18            31          20 
  Other financial assets 
   at amortised cost                                     15                    938           919         926 
  Deferred tax asset                                      9                    759         2,303       1,722 
                                                                           781,005       767,213     762,498 
 
Current assets 
  Investment properties 
   - held for sale                                       13                 40,804        13,720      41,631 
  Trade and other receivables                            16                 11,775        12,746      11,699 
  Cash and cash equivalents                                                  9,550        28,393      10,441 
                                                                            62,129        54,859      63,771 
 
Total assets                                                               843,134       822,072     826,269 
                                                                      ------------  ------------  ---------- 
 
EQUITY AND LIABILITIES 
 
Current liabilities 
  Borrowings                                             17                    835         1,085         922 
  Trade and other payables                               18                 10,962        10,548      11,893 
  Current tax                                             9                  1,296           513         512 
                                                                            13,093        12,146      13,327 
Non-current liabilities 
  Borrowings                                             17                300,270       285,525     283,233 
  Derivative financial instruments                       19                  4,795        14,554      10,884 
  Deferred tax liability                                  9                 76,413        71,897      75,198 
                                                                           381,478       371,976     369,315 
 
Total liabilities                                                          394,571       384,122     382,642 
                                                                      ------------  ------------  ---------- 
 
Equity 
  Stated capital                                         21                196,578       196,578     196,578 
  Treasury shares                                                         (37,111)      (19,705)    (33,275) 
  Share based payment reserve                            20                      -             -         343 
  Retained earnings                                                        285,429       257,519     276,394 
  Equity attributable to 
   owners of the parent                                                    444,896       434,392     440,040 
 
  Non-controlling interest                                                   3,667         3,558       3,587 
Total equity                                                               448,563       437,950     443,627 
                                                                      ------------  ------------  ---------- 
 
Total equity and liabilities                                               843,134       822,072     826,269 
                                                                      ------------  ------------  ---------- 
 
 
 
 
 
 
 
Condensed Consolidated Statement 
 of Changes in Equity 
For the period from 1 
 January 2022 to 30 June 
 2022 
 
 
 
                                                 Attributable to the owners 
                                                        of the parent 
 
                                    Stated  Treasury             Share  Retained     Total  Non-controlling     Total 
                                   capital    Shares             based  earnings                   interest    equity 
                                                               payment 
                                                               reserve 
                                   EUR'000   EUR'000           EUR'000   EUR'000   EUR'000          EUR'000   EUR'000 
 
Balance at 1 January 
 2021                              196,578  (17,206)            6,369    244,685   430,426            3,530   433,956 
 
Comprehensive income: 
Profit for the period                    -         -                 -    16,208    16,208               28    16,236 
Other comprehensive                      -         -                 -         -         -                -         - 
income 
Total comprehensive income 
 for the period                          -         -                 -    16,208    16,208               28    16,236 
 
Transactions with 
owners 
- 
recognised directly in 
 equity: 
Issue of shares                          -         -                 -         -         -                -         - 
Dividends paid                           -         -                 -   (5,207)   (5,207)                -   (5,207) 
Performance fee                          -         -                 -         -         -                -         - 
Settlement of performance 
 fee using treasury shares                     4,536           (6,369)     1,833         -                          - 
Acquisition of treasury 
 shares                                  -   (7,035)                 -         -   (7,035)                -   (7,035) 
 
Balance at 30 June 2021 
 (unaudited)                       196,578  (19,705)                 -   257,519   434,392            3,558   437,950 
 
Comprehensive income: 
Profit for the period                    -         -                 -    21,103    21,103               29    21,132 
Other comprehensive                      -         -                 -         -         -                -         - 
income 
Total comprehensive income 
 for the period                          -         -                 -    21,103    21,103               29    21,132 
 
Transactions with 
owners 
- 
recognised directly in 
 equity: 
Dividends paid                           -         -                 -   (2,228)   (2,228)                -   (2,228) 
Performance fee                          -         -               343         -       343                -       343 
Acquisition of treasury 
 shares                                  -  (13,570)                 -         -  (13,570)                -  (13,570) 
 
Balance at 31 December 
 2021 (audited)                    196,578  (33,275)               343   276,394   440,040            3,587   443,627 
 
Comprehensive income: 
Profit for the period                    -         -                 -    13,891    13,891               80    13,971 
Other comprehensive                      -         -                 -         -         -                -         - 
income 
Total comprehensive income 
 for the period                          -         -                 -    13,891    13,891               80    13,971 
 
Transactions with 
owners 
- 
recognised directly in 
 equity: 
Dividends paid                           -         -                 -   (4,856)   (4,856)                -   (4,856) 
Performance fee                          -         -             (343)         -     (343)                -     (343) 
Acquisition of treasury 
 shares                                  -   (3,836)                 -         -   (3,836)                -   (3,836) 
 
Balance at 30 June 2022 
 (unaudited)                       196,578  (37,111)                 -   285,429   444,896            3,667   448,563 
                                  --------  --------  ----------------  --------  --------  ---------------  -------- 
 
The share based payment reserve had been established in relation 
 to the issue of shares for the payment of the performance fee of 
 the property advisor. 
Treasury shares comprise the accumulated cost of shares acquired 
 on-market. 
 
 
 
 
 
 
Condensed Consolidated 
 Statement of Cash Flows 
For the period from 1 
 January 2022 to 30 June 
 2022 
 
 
                                                     Notes                  Six   Six months          Year 
                                                                         months      ended           ended 
                                                                          ended 
                                                                        30 June       30 June           31 
                                                                           2022          2021     December 
                                                                                                      2021 
                                                                    (unaudited)   (unaudited)    (audited) 
                                                                        EUR'000       EUR'000      EUR'000 
 
Profit before taxation                                                   16,952        20,434       45,250 
 
Adjustments for: 
Net finance charge                                                      (2,197)            78          169 
Gain on disposal of 
 investment 
 property                                                                  (88)         (577)      (1,518) 
Investment property 
 revaluation 
 gain                                                                  (11,395)      (15,987)     (37,983) 
Depreciation                                                                  8             8            8 
Performance fee due to 
 property advisor                                                         (343)             -          343 
                                                                                 ------------ 
Operating cash flows before 
 movements in working capital                                             2,937         3,956        6,269 
 
Increase in receivables                                                 (4,424)       (4,332)      (1,320) 
(Decrease) / increase in payables                                         (931)         1,530        2,875 
                                                                                 ------------ 
Cash (used in) / generated 
 from operating activities                                              (2,418)         1,154        7,824 
Income tax (paid)                                                          (19)          (34)          163 
                                                                                 ------------ 
Net cash (used in) / generated 
 from operating activities                                              (2,437)         1,120        7,987 
 
Cash flow from investing activities 
Proceeds on disposal of investment 
 property (net of disposal costs)                                        11,244        10,198       13,758 
Interest received                                                             2            18            1 
Capital expenditure on investment 
 property                                                               (6,234)       (2,729)      (9,477) 
Property additions                                                      (7,724)             -            - 
(Acquisition) / disposals of 
 property, plant and equipment                                              (6)             3           14 
Net cash (used in) / generated 
 from investing activities                                              (2,718)         7,490        4,296 
 
Cash flow from financing activities 
Interest paid on bank loans                                             (3,687)       (3,663)      (7,743) 
Repayment of bank loans                                                 (3,281)       (1,308)      (4,059) 
Drawdown on bank loan facilities                                         20,012             -          900 
Dividends paid                                                          (4,856)       (5,207)      (7,435) 
Acquisition of treasury 
 shares                                                                 (4,001)       (7,035)     (20,501) 
Net cash generated from / (used 
 in) financing activities                                                 4,187      (17,213)     (38,838) 
 
Net (decrease) in cash and 
 cash equivalents                                                         (968)       (8,603)     (26,555) 
 
Cash and cash equivalents at 
 beginning of period/year                                                10,441        36,996       36,996 
Exchange gains on cash and cash                                               -             -            - 
 equivalents 
 
Cash and cash equivalents at 
 end of period/year                                                       9,550        28,393       10,441 
                                                                   ------------  ------------   ---------- 
 
 
Reconciliation of Net Cash Flow to Movement 
 in Debt 
For the period from 1 
 January 2022 to 30 June 
 2022 
                                                                            Six           Six         Year 
                                                                         months        months        ended 
                                                                          ended         ended 
                                                                        30 June       30 June           31 
                                                                           2022          2021     December 
                                                                                                      2021 
                                                                        EUR'000       EUR'000      EUR'000 
 
Cashflow from increase 
 / (decrease) in debt 
 financing                                                               16,731       (1,308)      (3,159) 
Non-cash changes from 
 increase in debt 
 financing                                                                  219           369        (235) 
Movement in debt in the 
 period/year                                                             16,950         (939)      (3,394) 
                                                                   ------------  ------------   ---------- 
Debt at the start of the 
 period/year                                                            284,155       287,549      287,549 
Debt at the end of the 
 period/year                                          17                301,105       286,610      284,155 
                                                                   ------------  ------------   ---------- 
 
Dividends paid during the six months to 30 June 2022 represent the 
 final dividend relating to the year end 2021. 
 
 
 
 
 
 
 
 
Notes to the Condensed Consolidated 
 Financial Statements 
For the period from 1 
 January 2022 to 30 June 
 2022 
 
 
1. General information 
The Group consists of a Parent Company, Phoenix Spree Deutschland 
 Limited ('the Company'), incorporated in Jersey, Channel Islands 
 and all its subsidiaries ('the Group') which are incorporated and 
 domiciled in and operate out of Jersey and Germany. Phoenix Spree 
 Deutschland Limited is listed on the premium segment of the Main 
 Market of the London Stock Exchange. 
 
The Group invests in residential and commercial property in Germany. 
 
The registered office is at 12 Castle Street, St Helier, Jersey, 
 JE2 3RT, Channel Islands. 
 
2. Basis of preparation 
The interim set of condensed consolidated financial statements has 
 been prepared in accordance with the Disclosure and Transparency 
 Rules of the Financial Conduct Authority and with IAS 34 Interim 
 Financial Reporting as adopted by the European Union and the United 
 Kingdom. 
 
The interim condensed consolidated financial statements do not include 
 all the information and disclosures required in the annual financial 
 statements, and should be read in conjunction with the Group's annual 
 financial statements for the year ended 31 December 2021. 
 
As required by the Disclosure and Transparency Rules of the Financial 
 Conduct Authority, the financial statements have been prepared applying 
 the accounting policies and presentation that were applied in the 
 preparation of the Company's published consolidated financial statements 
 for the year ended 31 December 2021. 
 
The comparative figures for the financial year ended 31 December 
 2021 are extracted from but do not comprise, the Group's annual consolidated 
 financial statements for that financial year. 
 
The interim condensed consolidated financial statements were authorised 
 and approved for issue on 28 September 2022. 
 
The interim condensed consolidated financial statements are neither 
 reviewed nor audited, and do not constitute statutory accounts within 
 the meaning of Section 105 of the Companies (Jersey) Law 1991. 
 
2.1 Going concern 
The interim condensed consolidated financial statements have been 
 prepared on a going concern basis which assumes the Group will be 
 able to meet its liabilities as they fall due for the foreseeable 
 future. The Directors carried out a thorough review of the viability 
 of the Company in the light of the continuing global inflationary 
 pressures, rising interest rates and the ongoing conflict in Ukraine, 
 the conclusion of which was that there were no concerns regarding 
 the viability of the Company. These condensed consolidated financial 
 statements have therefore been prepared on a going concern basis. 
 
2.2 New standards and 
 interpretations 
There are currently no new standards, amendments or interpretations 
 effective for annual periods beginning on or after 1 January 2022 
 that are required to be adopted by the Group. 
 
3. Critical accounting estimates and judgements 
The preparation of condensed consolidated financial statements in 
 conformity with IFRS requires the Group to make certain critical 
 accounting estimates and judgements. In the process of applying the 
 Group's accounting policies, management has decided the following 
 estimates and assumptions have a significant risk of causing a material 
 adjustment to the carrying amounts of assets and liabilities within 
 the financial period; 
 
i) Estimate of fair value of investment properties 
The valuation of the Group's property portfolio is inherently subjective 
 due to, among other factors, the individual nature of each property, 
 its location and condition, and expected future rentals. The valuation 
 as at 30 June 2022, which has been used to prepare these financial 
 statements is based on the rules, regulations and market as at that 
 date. The fair value estimates of investments properties are detailed 
 in note 12. 
 
The best evidence of fair value is current prices in an active market 
 of investment properties with similar leases and other contracts. 
 In the absence of such information, the Group determines the amount 
 within a range of reasonable fair value estimates. In making its 
 estimate, the Group considers information from a variety of sources, 
 including: 
 
a) Discounted cash flow projections based on reliable estimates of 
 future cash flows, derived from the terms of any existing lease and 
 other contracts, and (where possible) from external evidence such 
 as current market rents for similar properties in the same location 
 and condition, and using discount rates that reflect current market 
 assessments of the uncertainty in the amount and timing of the cash 
 flows. 
 
b) Current prices in an active market for properties of different 
 nature, condition or location (or subject to different lease or other 
 contracts), adjusted to reflect those differences. 
 
c) Recent prices of similar properties in less active markets, with 
 adjustments to reflect any changes in economic conditions since the 
 date of the transactions that occurred at those prices. 
 
The Directors remain ultimately responsible for ensuring that the 
 valuers are adequately qualified, competent and base their results 
 on reasonable and realistic assumptions. The Directors have appointed 
 JLL as the real estate valuation experts who determine the fair value 
 of investment properties using recognised valuation techniques and 
 the principles of IFRS 13. Further information on the valuation process 
 can be found in note 12. 
 
For further information with regard to the movement in the fair value 
 of the Group's investment properties, refer to the management report 
 on pages 6 to 7. 
 
ii) Judgment in relation to the recognition of assets held for sale 
In accordance with the requirement of IFRS 5, Management has made 
 an assumption in respect of the likelihood of investment properties 
 - held for sale, being sold within the following 12 months. Management 
 considers that based on historical and current experience of market 
 since 30 June 2022, the properties can be reasonably expected to 
 sell within this timeframe. 
 
4. Segmental information 
Information reported to the Board of Directors, the chief operating 
 decision maker, relates to the Group as a whole. Therefore, the Group 
 has not included any further segmental analysis within these condensed 
 consolidated unaudited interim financial statements. 
 
 
 
 
 
 
Notes to the Condensed Consolidated 
 Financial Statements 
For the period from 1 
 January 2022 to 30 June 
 2022 
 
 
5. Property expenses 
                                                                        30 June       30 June          31 
                                                                           2022          2021    December 
                                                                                                     2021 
                                                                    (unaudited)   (unaudited)   (audited) 
                                                                        EUR'000       EUR'000     EUR'000 
 
Property management expenses                                                613           606       1,195 
Repairs and maintenance                                                     899           598       1,731 
Cost incurred in splitting assets                                             -            33           - 
 into condominiums at the land 
 registry 
Impairment charge - trade receivables                                      (66)            49         420 
Service charges paid on behalf 
 of tenants                                                               3,862         2,761       6,014 
Property Advisors' fees 
 and expenses                                                             3,429         3,344       6,722 
                                                                          8,737         7,391      16,082 
                                                                   ------------  ------------  ---------- 
 
6. Administrative 
expenses 
                                                                        30 June       30 June          31 
                                                                           2022          2021    December 
                                                                                                     2021 
                                                                    (unaudited)   (unaudited)   (audited) 
                                                                        EUR'000       EUR'000     EUR'000 
 
Secretarial & administration 
 fees                                                                       318           386         609 
Legal & professional fees                                                   895           971       2,405 
Directors' fees                                                             152           158         287 
Bank charges                                                                 41            53          62 
(Profit) / loss on foreign 
 exchange                                                                 (105)            14          82 
Depreciation                                                                  8             8           8 
Other income                                                                (3)           (4)         (6) 
                                                                          1,306         1,586       3,447 
                                                                   ------------  ------------  ---------- 
 
7. Gain on disposal of investment property (including 
 investment property held for sale) 
                                                     Notes              30 June       30 June          31 
                                                                           2022          2021    December 
                                                                                                     2021 
                                                                    (unaudited)   (unaudited)   (audited) 
                                                                        EUR'000       EUR'000     EUR'000 
 
Disposal proceeds                                                         7,314        10,323      16,667 
Book value of disposals                               12                (6,720)       (9,346)    (14,309) 
Disposal costs                                                            (506)         (400)       (840) 
                                                                             88           577       1,518 
                                                                   ------------  ------------  ---------- 
 
 
 
Where there has been a partial disposal of a property, the net book 
 value of the asset sold is calculated on a per square metre rate, 
 based on the December valuation. 
 
8. Net finance charge 
                                                                        30 June       30 June          31 
                                                                           2022          2021    December 
                                                                                                     2021 
                                                                    (unaudited)   (unaudited)   (audited) 
                                                                        EUR'000       EUR'000     EUR'000 
 
Interest income                                                            (14)          (18)        (26) 
Fair value gain on 
 interest 
 rate swap                                                              (6,089)       (3,643)     (7,313) 
Finance expense on bank borrowings                                        3,906         3,739       7,508 
                                                                        (2,197)            78         169 
                                                                   ------------  ------------  ---------- 
 
 
9. Income tax expense 
                                                                        30 June       30 June          31 
                                                                           2022          2021    December 
                                                                                                     2021 
                                                                    (unaudited)   (unaudited)   (audited) 
The tax charge for the 
 period is as follows:                                                  EUR'000       EUR'000     EUR'000 
 
Current tax charge / (credit)                                               803           (3)       (201) 
Deferred tax charge - origination and 
 reversal of temporary differences                                        2,178         4,201       8,083 
                                                                          2,981         4,198       7,882 
                                                                   ------------  ------------  ---------- 
 
 
 
 
 
 
 
Notes to the Condensed Consolidated 
 Financial Statements 
For the period from 1 
 January 2022 to 30 June 
 2022 
 
 
9. Income tax expense 
 (continued) 
 
The tax charge for the year can be reconciled to the theoretical 
 tax charge on the profit in the condensed consolidated statement 
 of comprehensive income as follows: 
 
                                                                                    30 June       30 June   31 December 
                                                                                       2022          2021          2021 
                                                                                    EUR'000       EUR'000       EUR'000 
 
Profit before tax on continuing 
 operations                                                                          16,952        20,434        45,250 
 
Tax at German income tax rate 
 of 15.8% (2021: 15.8%)                                                               2,678         3,229         7,150 
Income not taxable                                                                     (14)          (91)         (240) 
Tax effect of losses brought 
 forward                                                                                316         1,061           972 
Total tax charge for 
 the period/year                                                                      2,981         4,198         7,882 
                                                                               ------------  ------------  ------------ 
 
Reconciliation of current tax liabilities 
                                                                                    30 June       30 June   31 December 
                                                                                       2022          2021          2021 
                                                                                    EUR'000       EUR'000       EUR'000 
 
Balance at beginning of 
 period/year                                                                            512           550           550 
Tax (paid) / received                                                                  (19)          (34)           163 
Current tax charge / (credit)                                                           803           (3)         (201) 
Balance at end of period/year                                                         1,296           513           512 
                                                                               ------------  ------------  ------------ 
 
Reconciliation of 
deferred 
tax 
                                                                                    Capital      Interest         Total 
                                                                                      gains          rate 
                                                                                         on         swaps 
                                                                                 properties 
                                                                                    EUR'000       EUR'000       EUR'000 
                                                                                  Liability         Asset           Net 
                                                                                                            liabilities 
 
Balance at 1 January 2021                                                          (68,273)         2,880      (65,393) 
 
Charged to the statement 
 of comprehensive income                                                            (3,624)         (577)       (4,201) 
Deferred tax (liability) 
 / asset at 30 June 2021                                                           (71,897)         2,303      (69,594) 
 
Charged to the statement 
 of comprehensive income                                                            (3,301)         (581)       (3,882) 
Deferred tax (liability) 
 / asset at 31 December 
 2021                                                                              (75,198)         1,722      (73,476) 
                                                                               ------------  ------------  ------------ 
 
Charged to the statement 
 of comprehensive income                                                            (1,215)         (963)       (2,178) 
Deferred tax (liability) 
 / asset at 30 June 2022                                                           (76,413)           759      (75,654) 
                                                                               ------------  ------------  ------------ 
 
10. Investment property 
 fair value gain 
                                                                                    30 June       30 June   31 December 
                                                                                       2022          2021          2021 
                                                                                (unaudited)   (unaudited)     (audited) 
                                                                                    EUR'000       EUR'000       EUR'000 
 
Investment property fair 
 value gain                                                                          11,395        15,987        37,983 
                                                                               ------------  ------------  ------------ 
 
Further information on investment properties is shown in note 12. 
 
11. Dividends 
                                                                                    30 June       30 June   31 December 
                                                                                       2022          2021          2021 
                                                                                (unaudited)   (unaudited)     (audited) 
                                                                                    EUR'000       EUR'000       EUR'000 
Amounts recognised as distributions 
 to equity holders in the period: 
Interim dividend for the year ended 31 December 
 2021 of EUR2.35 cents (2.02p) declared 24 
 September 2021, paid 29 October 2021 (2020: 
 EUR2.35 cents (2.1p)) per share.                                                         -             -         2,228 
Final dividend for the year ended 31 December 
 2021 of 5.15 cents (EUR) (4.65 pence) paid 
 7 June 2022 (2020: 5.15 cents (EUR) (4.65 
 pence)) per share.                                                                   4,856         5,207         5,207 
                                                                               ------------  ------------  ------------ 
 
The Board is pleased to declare an unchanged interim dividend of 
 2.35 cents per share (2.09 pence per share, GBP:EUR FX rate locked 
 in at 1:1.124 as at 28 September 2022.) for the first half of the 
 year (six months to 30 June 2021: 2.35 cents, 2.02 pence). The dividend 
 is expected to be paid on or around 28 October 2022 to shareholders 
 on the register at close of business on 7 October 2022, with an ex-dividend 
 date of 6 October 2022. 
 
The proposed dividend has not been included as a liability in these 
 condensed consolidated financial statements. The payment of this 
 dividend will not have any tax consequences for the Group. 
 
 
 
 
 
 
 
Notes to the Condensed Consolidated 
 Financial Statements 
For the period from 1 January 
 2022 to 30 June 2022 
-----------------------------------------   ------  ---  ------  ---  ------   ------------  ------------  ------------ 
 
12. Investment 
properties 
                                                                                    30 June       30 June   31 December 
                                                                                       2022          2021          2021 
                                                                                (unaudited)   (unaudited)     (audited) 
Fair value                                                                          EUR'000       EUR'000       EUR'000 
 
Balance at beginning 
 of period/year                                                                     801,461       768,310       768,310 
Capital expenditure                                                                   6,234         2,729         9,477 
Disposals                                                                           (6,720)       (9,346)      (14,309) 
Fair value gain                                                                      11,395        15,987        37,983 
                                                                               ------------  ------------  ------------ 
Investment properties at fair value - as 
 set out in the report by JLL                                                       812,370       777,680       801,461 
Assets considered as 
 "Held 
 for sale" (Note 13)                                                               (40,804)      (13,720)      (41,631) 
Assets considered as 
"Under 
construction" (Note 14)                                                               7,724             -             - 
Balance at end of period/year                                                       779,290       763,960       759,830 
                                                                               ------------  ------------  ------------ 
 
The property portfolio was valued at 30 June 2022 by the Group's 
 independent valuers, Jones Lang LaSalle GmbH ('JLL'), in accordance 
 with the methodology described below. The valuations were performed 
 in accordance with the current Appraisal and Valuation Standards, 
 8th edition (the 'Red Book') published by the Royal Institution of 
 Chartered Surveyors (RICS). 
 
The valuation is performed on a building-by-building basis and the 
 source information on the properties including current rent levels, 
 void rates and non-recoverable costs was provided to JLL by the Property 
 Advisors QSix Residential Limited. Assumptions with respect to rental 
 growth, adjustments to non-recoverable costs and the future valuation 
 of these are those of JLL. Such estimates are inherently subjective 
 and actual values can only be determined in a sales transaction. 
 JLL also uses data from comparable market transactions where these 
 are available alongside their own assumptions. 
 
Having reviewed the JLL report, the Directors are of the opinion 
 that this represents a fair and reasonable valuation of the properties 
 and have consequently adopted this valuation in the preparation of 
 the condensed consolidated financial statements. 
 
The valuations have been prepared by JLL on a consistent basis at 
 each reporting date and the methodology is consistent and in accordance 
 with IFRS which requires that the 'highest and best use' value is 
 taken into account where that use is physically possible, legally 
 permissible and financially feasible for the property concerned, 
 and irrespective of the current or intended use. 
 
All properties are valued as Level 3 measurements under the fair 
 value hierarchy (see note 24) as the inputs to the discounted cash 
 flow methodology which have a significant effect on the recorded 
 fair value are not observable. Additionally, JLL perform reference 
 checks back to comparable market transactions to confirm the valuation 
 model. 
 
The unrealised fair value gain in respect of investment property 
 is disclosed in the condensed consolidated statement of comprehensive 
 income as 'Investment property fair value gain'. 
 
Valuations are undertaken using the discounted cash flow valuation 
 technique as described below and with the inputs set out as follows: 
 
Discounted cash flow methodology 
 (DCF) 
The fair value of investment properties is determined using discounted 
 cash flows. 
 
Under the DCF method, a property's fair value is estimated using 
 explicit assumptions regarding the benefits and liabilities of ownership 
 over the asset's life including an exit or terminal value. As an 
 accepted method within the income approach to valuation the DCF method 
 involves the projection of a series of cash flows on a real property 
 interest. To this projected cash flow series, an appropriate, market-derived 
 discount rate is applied to establish the present value of the income 
 stream associated with the real property. 
 
The duration of the cash flow and the specific timing of inflows 
 and outflows are determined by events such as rent reviews, lease 
 renewal and related lease up periods, re-letting, redevelopment, 
 or refurbishment. The appropriate duration is typically driven by 
 market behaviour that is a characteristic of the class of real property. 
 
Periodic cash flow is typically estimated as gross income less vacancy, 
 non-recoverable expenses, collection losses, lease incentives, maintenance 
 cost, agent and commission costs and other operating and management 
 expenses. The series of periodic net operating incomes, along with 
 an estimate of the terminal value anticipated at the end of the projection 
 period, is then discounted. 
 
The Group categorises all investment 
 properties in the following three 
 ways; 
 
Rental Scenario 
Where properties have been valued under the "Discounted Cashflow 
 Methodology" and are intended to be held by the Group for the foreseeable 
 future, they are considered valued under the "Rental Scenario" This 
 will equal the "Investment Properties" line in the Non-Current Assets 
 section of the condensed consolidated statement of financial position. 
 
Condominium scenario 
Where properties have the potential or the benefit of all relevant 
 permissions required to sell apartments individually (condominiums) 
 then we value these as a 'condominium scenario'. Expected sales in 
 the coming year from these assets are considered held for sale under 
 IFRS 5 and can be seen in note 13. The additional value is reflected 
 by using a lower discount rate under the DCF Methodology. Properties 
 which do not have the benefit of all relevant permissions are described 
 as valued using a standard 'rental scenario'. Included in properties 
 valued under the condominium scenario are properties not yet released 
 to held for sale as only a portion of the properties are forecast 
 to be sold in the coming 12 months. 
 
Disposal Scenario 
Where properties have been notarised for sale prior to the reporting 
 date, but have not completed; they are held at their notarised disposal 
 value. These assets are considered held for sale under IFRS 5 as 
 set out in note 13. 
 
 
 
 
 
 
Notes to the Condensed Consolidated 
 Financial Statements 
For the period from 1 
 January 2022 to 30 June 
 2022 
------------------------  ------  -------   ------   ------   ------   ------------------------------  ---------------------------------  -------------------------------------- 
 
12. Investment properties (continued) 
 
The table below sets out the 
 assets valued using these 3 
 scenarios: 
                                                                                              30 June                            30 June                             31 December 
                                                                                                 2022                               2021                                    2021 
                                                                                              EUR'000                            EUR'000                                 EUR'000 
Rental scenario                                                                               779,540                            734,240                                 762,690 
Condominium scenario                                                                           32,318                             42,294                                  33,050 
Disposal scenario                                                                                 512                              1,146                                   5,721 
Total                                                                                         812,370                            777,680                                 801,461 
                                                                       ------------------------------  ---------------------------------  -------------------------------------- 
 
13. Investment 
properties 
- Held for sale 
                                                                                              30 June                            30 June                             31 December 
                                                                                                 2022                               2021                                    2021 
                                                                                          (unaudited)                        (unaudited)                               (audited) 
                                                                                              EUR'000                            EUR'000                                 EUR'000 
Fair value - held for sale investment 
 properties 
 
At beginning of period/year                                                                    41,631                             19,302                                  19,302 
Transferred from investment 
 properties                                                                                     5,359                              3,248                                  35,886 
Capital expenditure                                                                               534                                458                                     586 
Properties sold                                                                               (6,720)                            (9,346)                                (14,309) 
Valuation gain on 
 apartments 
 held for sale                                                                                      -                                 58                                     166 
At end of period/year                                                                          40,804                             13,720                                  41,631 
                                                                       ------------------------------  ---------------------------------  -------------------------------------- 
 
Investment properties are re-classified as current assets and described 
 as 'held for sale' in three different situations: properties notarised 
 for sale at the reporting date, properties where at the reporting 
 date the Group has obtained and implemented all relevant permissions 
 required to sell individual apartment units, and efforts are being 
 made to dispose of the assets ('condominium'); and properties which 
 are being marketed for sale but have currently not been notarised. 
 
Properties notarised for sale by the reporting date are valued at 
 their disposal price (disposal scenario), and other properties are 
 valued using the condominium or rental scenarios (see note 12) as 
 appropriate. 
 
Investment properties held for sale are all expected to be sold within 
 12 months of the reporting date based on Management knowledge of 
 current and historic market conditions. 
 
14. Investment 
properties 
- Under construction 
                                                                                              30 June                            30 June                             31 December 
                                                                                                 2022                               2021                                    2021 
                                                                                          (unaudited)                        (unaudited)                               (audited) 
                                                                                              EUR'000                            EUR'000                                 EUR'000 
Fair value - under construction investment 
 properties 
 
At beginning of                                                                                                                                                                - 
period/year                                                                                         -                                  - 
Properties purchased                                                                            5,550                                  -                                       - 
Capital expenditure                                                                             2,174                                  -                                       - 
At end of period/year                                                                           7,724                                  -                                       - 
                                                                       ------------------------------  ---------------------------------  -------------------------------------- 
 
Investment properties are considered as under construction from the 
 point of completion of the acquisition of the property up until the 
 completion of the development, at which point the property will be 
 transferred to investment properties. 
 
The directors consider the fair value of the current investment property 
 under construction to be the acquisition price plus any capital expenditure 
 incurred. Due to the acquisition occurring in May 2022 and the close 
 proximity to the reporting date, the directors consider this method 
 represents a fair and reasonable reflection of fair value. 
 
15. Other financial 
assets 
at amortised cost 
                                                                                              30 June                            30 June                             31 December 
                                                                                                 2022                               2021                                    2021 
                                                                                          (unaudited)                        (unaudited)                               (audited) 
                                                                                              EUR'000                            EUR'000                                 EUR'000 
Non-current 
Balance at beginning 
 of period/year                                                                                   926                                901                                     901 
Accrued interest                                                                                   12                                 18                                      25 
Balance at end of period/year                                                                     938                                919                                     926 
                                                                       ------------------------------  ---------------------------------  -------------------------------------- 
 
The Group entered into a loan agreement with the minority interest 
 of Accentro Real Estate AG in relation to the acquisition of the 
 assets as share deals. This loan bears interest at 3% per annum. 
 
These financial assets are considered to have low credit risk and 
 any loss allowance would be immaterial. 
 
None of these financial assets were either past due or impaired. 
 
 
 
 
 
Notes to the Condensed Consolidated 
 Financial Statements 
For the period from 1 
 January 2022 to 30 June 
 2022 
------------------------  ------  -------   ------   ------   ------   ------------------------------  ---------------------------------  -------------------------------------- 
 
16. Trade and other 
receivables 
                                                                                              30 June                            30 June                             31 December 
                                                                                                 2022                               2021                                    2021 
                                                                                          (unaudited)                        (unaudited)                               (audited) 
                                                                                              EUR'000                            EUR'000                                 EUR'000 
Current 
Trade receivables                                                                               1,061                                920                                     827 
Less: impairment provision                                                                      (249)                              (138)                                   (315) 
                                                                       ------------------------------  ---------------------------------  -------------------------------------- 
Net receivables                                                                                   812                                782                                     512 
Prepayments and accrued income                                                                  2,321                                795                                     514 
Investment property disposal 
 proceeds receivable                                                                                -                              3,944                                   4,513 
Service charges receivable                                                                      8,066                              7,033                                   5,562 
Other receivables                                                                                 576                                192                                     598 
                                                                                               11,775                             12,746                                  11,699 
                                                                       ------------------------------  ---------------------------------  -------------------------------------- 
 
17. Borrowings 
                                                                                              30 June                            30 June                             31 December 
                                                                                                 2022                               2021                                    2021 
                                                                                          (unaudited)                        (unaudited)                               (audited) 
                                                                                              EUR'000                            EUR'000                                 EUR'000 
Current liabilities 
Bank loans - NATIXIS 
 Pfandbriefbank 
 AG*                                                                                               34                                284                                     121 
Bank loans - Berliner Sparkasse                                                                   801                                801                                     801 
                                                                                                       ---------------------------------  -------------------------------------- 
                                                                                                  835                              1,085                                     922 
Non-current liabilities 
Bank loans - NATIXIS 
 Pfandbriefbank 
 AG**                                                                                         239,454                            236,201                                 234,328 
Bank loans - Berliner Sparkasse                                                                60,816                             49,324                                  48,905 
                                                                                              300,270                            285,525                                 283,233 
 
                                                                                              301,105                            286,610                                 284,155 
                                                                       ------------------------------  ---------------------------------  -------------------------------------- 
 
* Nominal value of the borrowings as at 30 June 2022 was EUR986,000 
 (31 December 2021: EUR901,000, 30 June 2021: EUR977,000). 
 
** Nominal value of the borrowings as at 30 June 2022 was EUR242,497,000 
 (31 December 2021: EUR240,000,000, 30 June 2021: EUR239,110,000). 
 
For further information on borrowings, refer to the management report 
 on page 10. 
 
18. Trade and other 
payables 
                                                                                              30 June                            30 June                             31 December 
                                                                                                 2022                               2021                                    2021 
                                                                                          (unaudited)                        (unaudited)                               (audited) 
                                                                                              EUR'000                            EUR'000                                 EUR'000 
 
Trade payables                                                                                    609                              1,155                                   2,758 
Accrued liabilities                                                                             2,806                              1,643                                   1,472 
Service charges payable                                                                         5,769                              7,750                                   5,203 
Advanced payment received 
 on account                                                                                     1,778                                  -                                   2,437 
Deferred income                                                                                     -                                  -                                      23 
                                                                                               10,962                             10,548                                  11,893 
                                                                       ------------------------------  ---------------------------------  -------------------------------------- 
 
19. Derivative 
financial 
instruments 
                                                                                              30 June                            30 June                             31 December 
                                                                                                 2022                               2021                                    2021 
                                                                                          (unaudited)                        (unaudited)                               (audited) 
                                                                                              EUR'000                            EUR'000                                 EUR'000 
Interest rate swaps - carried at fair value through 
 profit or loss 
At beginning of period/year                                                                    10,884                             18,197                                  18,197 
Gain in movement in fair value through profit 
 or loss                                                                                      (6,089)                            (3,643)                                 (7,313) 
At end of period/year                                                                           4,795                             14,554                                  10,884 
                                                                       ------------------------------  ---------------------------------  -------------------------------------- 
 
The notional principal amounts of the outstanding interest rate swap 
 contracts at 30 June 2022 were EUR204,269,000 (December 2021: EUR204,269,000, 
 June 2021: EUR204,269,000). At 30 June 2022 the fixed interest rates 
 vary from 0.24% to 1.01% (December 2021: 0.24% to 1.07%, June 2021: 
 0.24% to 1.01%) above the main factoring Euribor rate. 
 
Maturity analysis of interest rate swaps 
                                                                                              30 June                            30 June                             31 December 
                                                                                                 2022                               2021                                    2021 
                                                                                              EUR'000                            EUR'000                                 EUR'000 
Between 2 and 5 years                                                                           4,795                                  -                                  10,405 
More than 5 years                                                                                   -                             14,554                                     479 
                                                                                                4,795                             14,554                                  10,884 
                                                                       ------------------------------  ---------------------------------  -------------------------------------- 
 
 
 
 
 
Notes to the Condensed Consolidated 
 Financial Statements 
For the period from 1 
 January 2022 to 30 June 
 2022 
------------------------  ------  -------   ------   ------   ------   ------------------------------  ---------------------------------  -------------------------------------- 
 
20. Share based payment 
 reserve 
                                                                                                                                                                     Performance 
                                                                                                                                                                             fee 
                                                                                                                                                                         EUR'000 
 
Balance at 1 January 2021                                                                                                                                                  6,369 
Settlement of 
 performance 
 fee in shares                                                                                                                                                           (6,369) 
                                                                                                                                          -------------------------------------- 
Balance at 30 June 2021                                                                                                                                                        - 
Fee charge for the period                                                                                                                                                    343 
                                                                                                                                          -------------------------------------- 
Balance at 31 December 
 2021                                                                                                                                                                        343 
Fee charge for the period                                                                                                                                                  (343) 
Balance at 30 June 2022                                                                                                                                                        - 
                                                                                                                                          -------------------------------------- 
 
No performance fee has been recognised in the period because the 
 performance criteria were not met. 
 
Performance Fee 
The Property Advisor is entitled to an asset and estate management 
 performance fee, measured over consecutive three year periods, equal 
 to 15% of the excess (or in the case of the initial period or any 
 performance period ending prior to 31 December 2020, 16%) by which 
 the annual EPRA NAV total return of the Group exceeds 8% per annum, 
 compounding (the 'Performance Fee'). As the EPRA NAV measurement 
 has been superseded by EPRA NTA (See note 23), future performance 
 fees will be calculated with respect to movements in EPRA NTA. The 
 Performance Fee is subject to a high watermark, being the higher 
 of: 
 
(i) EPRA NTA per share at 1 January 2021; and 
(ii) the EPRA NTA per share at the end of a Performance Period in 
 relation to which a performance fee was earned in accordance of the 
 provisions continued with the Property Advisor and Investor Relations 
 Agreement. 
 
 
Other Property Advisor Fees 
Under the Property Advisory Agreement for providing property advisory 
 services, the Property Advisor will be entitled to a Portfolio and 
 Asset Management Fee as follows: 
 
(i) 1.2% of the EPRA NTA of the Group where EPRA NTA of the 
 Group is equal to or less than EUR500 million; and 
(ii) 1% of the EPRA NTA of the Group greater than EUR500 million. 
 
The Property Advisor is entitled to receive a finance fee equal 
 to: 
 
(i) 0.1% of the value of any borrowing arrangement which the 
 Property Advisor has negotiated and/or supervised; and 
(ii) a fixed fee of GBP1,000 in respect of any borrowing arrangement 
 which the Property Advisor has renegotiated or varied. 
 
The Property Advisor is entitled to a capex monitoring fee equal 
 to 7% of any capital expenditure incurred by any Subsidiary which 
 the Property Advisor is responsible for managing. 
 
The Property Advisor is entitled to receive a transaction fee fixed 
 at GBP1,000 in respect of any acquisition or disposal of property 
 by any Subsidiary. 
 
The Property Advisor is entitled to a letting fee equal to between 
 one and three month's net cold rent (being gross rents receivable 
 less service costs and taxes) for each new tenancy signed by the 
 Company where the Property Advisor has sourced the relevant tenant. 
 
The Property Advisor shall be entitled to a fee for Investor 
 Relations Services at the annual rate of GBP75,000 payable 
 quarterly in arrears. 
 
The management fee will be reduced by the aggregate amount of any 
 transaction fees and finance fees payable to the Property Advisor 
 in respect of that calendar year. 
 
Details of the fees paid to the Property Advisor are set out in note 
 26. 
 
21. Stated capital 
                                                                                              30 June                            30 June                             31 December 
                                                                                                 2022                               2021                                    2021 
                                                                                          (unaudited)                        (unaudited)                               (audited) 
                                                                                              EUR'000                            EUR'000                                 EUR'000 
Issued and fully paid: 
At 1 January                                                                                  196,578                            196,578                                 196,578 
                                                                                              196,578                            196,578                                 196,578 
                                                                       ------------------------------  ---------------------------------  -------------------------------------- 
 
The number of shares in issue at 30 June 2022 was 100,751,410 (including 
 8,879,802 as Treasury Shares) (31 December 2021: 100,751,410 (including 
 7,949,293 as Treasury Shares), 30 June 2021: 100,751,410 (including 
 5,057,849 as Treasury Shares)). 
 
 
 
 
 
 
 
 
Notes to the Condensed Consolidated 
 Financial Statements 
For the period from 1 
 January 2022 to 30 June 
 2022 
------------------------  ------  -------   ------   ------    ------   ------------------------------  ---------------------------------  -------------------------------- 
 
22. Earnings per share 
                                                                                               30 June                            30 June                       31 December 
                                                                                                  2022                               2021                              2021 
                                                                                           (unaudited)                        (unaudited)                         (audited) 
 
Earnings for the purposes of basic earnings 
 per share being net profit attributable 
 to owners of the parent (EUR'000)                                                              13,891                             16,208                            37,311 
Weighted average number of ordinary shares 
 for the purposes of basic earnings per share 
 (Number)                                                                                   92,456,025                         96,259,529                        94,973,655 
Effect of dilutive potential ordinary shares 
 (Number)                                                                                            -                                  -                            72,433 
Weighted average number of ordinary shares 
 for the purposes of diluted earnings per 
 share (Number)                                                                             92,456,025                         96,259,529                        95,046,088 
                                                                        ------------------------------  ---------------------------------  -------------------------------- 
 
Earnings per share (EUR)                                                                          0.15                               0.17                              0.39 
Diluted earnings per share 
 (EUR)                                                                                            0.15                               0.17                              0.39 
                                                                        ------------------------------  ---------------------------------  -------------------------------- 
 
23. Net asset value per share 
 and EPRA Net Tangible Assets 
 (NTA) 
                                                                                               30 June                            30 June                       31 December 
                                                                                                  2022                               2021                              2021 
                                                                                           (unaudited)                        (unaudited)                         (audited) 
 
Net assets (EUR'000)                                                                           444,896                            434,392                           440,040 
Number of participating 
 ordinary shares                                                                            91,871,607                         95,693,560                        92,802,117 
 
Net asset value per share 
 (EUR)                                                                                            4.84                               4.54                              4.74 
                                                                        ------------------------------  ---------------------------------  -------------------------------- 
 
EPRA NTA 
                                                                                               30 June                            30 June                       31 December 
                                                                                                  2022                               2021                              2021 
                                                                                           (unaudited)                        (unaudited)                         (audited) 
 
Net assets (EUR'000)                                                                           444,896                            434,392                           440,040 
Add back deferred tax assets and liabilities, 
 derivative financial instruments and share 
 based payment reserves (EUR'000)                                                               80,449                             84,148                            84,017 
 
EPRA NTA (EUR'000)                                                                             525,345                            518,540                           524,057 
EPRA NTA per share (EUR)                                                                          5.72                               5.42                              5.65 
 
24. Financial 
instruments 
The Group is exposed to the risks that arise from its use of financial 
 instruments. This note describes the objectives, policies and processes 
 of the Group for managing those risks and the methods used to measure 
 them. Further quantitative information in respect of these risks 
 is presented throughout the condensed consolidated financial statements. 
 
Principal financial instruments 
 
The principal financial instruments used by the Group, from which 
 financial instrument risk arises, are as follows: 
-- financial assets 
-- cash and cash equivalents 
-- trade and other receivables 
-- trade and other payables 
-- borrowings 
-- derivative financial instruments 
 
The Group held the following financial assets at each reporting date: 
                                                                                               30 June                            30 June                       31 December 
                                                                                                  2022                               2021                              2021 
                                                                                           (unaudited)                        (unaudited)                         (audited) 
                                                                                               EUR'000                            EUR'000                           EUR'000 
 
Loans and receivables 
Trade and other receivables - current                                                            9,454                             11,951                            11,185 
Cash and cash equivalents                                                                        9,552                             28,393                            10,441 
Loans and receivables                                                                              938                                919                               926 
                                                                                                19,944                             41,263                            22,552 
                                                                        ------------------------------  ---------------------------------  -------------------------------- 
 
 
Notes to the Condensed Consolidated 
 Financial Statements 
For the period from 1 
 January 2022 to 30 June 
 2022 
------------------------  ------  -------   ------   ------    ------   ------------------------------  ---------------------------------  -------------------------------- 
 
24. Financial instruments (continued) 
 
The Group held the following financial liabilities at each reporting 
 date: 
                                                                                               30 June                            30 June                       31 December 
                                                                                                  2022                               2021                              2021 
                                                                                           (unaudited)                        (unaudited)                         (audited) 
                                                                                               EUR'000                            EUR'000                           EUR'000 
Held at amortised cost 
Borrowings payable: current                                                                        835                              1,085                               922 
Borrowings payable: 
 non-current                                                                                   300,270                            285,525                           283,233 
Trade and other payables                                                                        10,962                             10,548                            11,893 
                                                                                               312,067                            297,158                           296,048 
                                                                        ------------------------------  ---------------------------------  -------------------------------- 
 
Fair value through 
profit 
or loss 
Derivative financial liability 
 - interest rate swaps                                                                           4,795                             14,554                            10,884 
                                                                                                 4,795                             14,554                            10,884 
                                                                        ------------------------------  ---------------------------------  -------------------------------- 
 
                                                                                               316,862                            311,712                           306,932 
                                                                        ------------------------------  ---------------------------------  -------------------------------- 
 
Fair value of financial 
 instruments 
With the exception of the variable rate borrowings, the fair values 
 of the financial assets and liabilities are not materially different 
 to their carrying values due to the short term nature of the current 
 assets and liabilities or due to the commercial variable rates applied 
 to the long term liabilities. 
 
The interest rate swap was valued externally by the respective counterparty 
 banks by comparison with the market price for the relevant date. 
 
The interest rate swaps are expected to mature between July 2026 
 and February 2027. 
 
The Group uses the following hierarchy for determining and disclosing 
 the fair value of financial instruments by valuation technique: 
 
Level 1: quoted (unadjusted) prices in active markets for identical 
 assets or liabilities; 
 
Level 2: other techniques for which all inputs which have a significant 
 effect on the recorded fair value are observable, either directly 
 or indirectly; and 
 
Level 3: techniques which use inputs which have a significant effect 
 on the recorded fair value that are not based on observable market 
 data. 
 
During each of the reporting periods, there were no transfers between 
 valuation levels. 
 
Group fair values 
                                                                                               30 June                            30 June                       31 December 
                                                                                                  2022                               2021                              2021 
                                                                                           (unaudited)                        (unaudited)                         (audited) 
                                                                                               EUR'000                            EUR'000                           EUR'000 
Financial liabilities 
Interest rate swaps - Level 
 2 - current                                                                                         -                                  -                          (10,405) 
Interest rate swaps - Level 
 2 - non-current                                                                               (4,795)                           (14,554)                             (479) 
                                                                                               (4,795)                           (14,554)                          (10,884) 
                                                                        ------------------------------  ---------------------------------  -------------------------------- 
 
The valuation basis for the investment properties 
 is disclosed in note 12. 
 
25. Capital commitments 
                                                                                               30 June                            30 June                       31 December 
                                                                                                  2022                               2021                              2021 
                                                                                           (unaudited)                        (unaudited)                         (audited) 
                                                                                               EUR'000                            EUR'000                           EUR'000 
 
Contracted capital commitments                                                                  12,950                                  -                                 - 
 at the end of the year 
                                                                        ------------------------------  ---------------------------------  -------------------------------- 
 
Capital commitments include contracted obligations in respect of 
 the construction, enhancement and repair of the Group's properties. 
 The full amount disclosed above, EUR12.95m relates to an asset under 
 construction (see note 14) and is matched 100% with secured debt 
 finance. 
 
26. Related party transactions 
 
Related party transactions not disclosed elsewhere are as follows: 
 
QSix Residential Limited is the Group's appointed Property Advisor. 
 No Directors of QSix Residential Limited currently sit on the Board 
 of PSD, although its Principals retain a shareholding in the Company. 
 For the six month period ended 30 June 2022, an amount of EUR3,429,000 
 (EUR3,384,000 Management Fees and EUR45,000 Other expenses and fees) 
 (December 2021: EUR6,722,029 (EUR6,653,493 Management fees and EUR90,437 
 Other expenses and fees), June 2021: EUR3,344,000 (EUR3,298,000 Management 
 fees and EUR46,000 Other expenses and fees)) was payable to QSix 
 Residential Limited. At 30 June 2022 EUR839,000 (December 2021: EUR977,260, 
 June 2021: EUR839,000) was outstanding. 
 
The Property Advisor is also entitled to an asset and estate management 
 performance fee. The charge for the period in respect of the performance 
 fee was credit EUR343,000 (December 2021: EUR343,000, June 2021: 
 credit EURnil). Please refer to note 20 for more details. 
 
Apex Financial Services (Alternative Funds) Limited, the Company's 
 administrator provided administration and company secretarial services 
 to PSDL and its subsidiaries in 2022. For the six month period ended 
 30 June 2022, an amount of EUR289,000 (December 2021: EUR609,000, 
 June 2021: EUR320,600) was payable to Apex Financial Services (Alternative 
 Funds) Limited. At 30 June 2022 EUR117,500 (December 2021: EUR154,000, 
 June 2021: EURnil) was outstanding. 
 
Dividends paid to Directors in their capacity as a shareholder amounted 
 to EUR643 (December 2021: EUR2,976, June 2021: EUR2,422). 
 
 
 
 
Notes to the Condensed Consolidated 
 Financial Statements 
For the period from 1 
 January 2022 to 30 June 
 2022 
------------------------  ------  -------         --------------------  ------------------------------  ---------------------------------  -------------------------------- 
 
27. Events after the 
 reporting date 
 
The Company exchanged contracts for the sale of two residential units 
 in Berlin for total proceeds of EUR0.5 million prior to the reporting 
 date all of which was received in Q3 2022. 
 
In Q3 2022 the Company exchanged contracts for the sale of two condominiums 
 in Berlin for the aggregated consideration of EUR1.0 million. All 
 the transactions are expected to be completed in Q4 2022. 
 
 
In Q3 2022 the Company exchanged contracts for the disposal of two 
 non-core Berlin property an aggregate consideration of EUR8.6million. 
 
In Q3 2022 the Company exchanged contracts for the acquisition of 
 one property in Berlin with a purchase price of EUR4.9million. The 
 purchase is expected to complete in the first half of 2023. 
 
 
 
 
 
 
 
 
 
 
Professional Advisors 
 
Property Advisor              QSix Residential 
                               Limited 
                              54-56 Jermyn Street 
                              London SW1Y 6LX 
 
Administrator                 Apex Financial Services 
                               (Alternative Funds) Limited 
Company Secretary             12 Castle 
                               Street 
and Registered Office         St Helier 
                              Jersey JE2 3RT 
 
Registrar                     Link Asset Services (Jersey) 
                               Limited 
                              12 Castle Street 
                              St. 
                               Helier 
                              Jersey JE2 3RT 
 
Principal Banker              Barclays Private Clients 
                               International Limited 
                              13 Library Place 
                              St. 
                               Helier 
                              Jersey JE4 8NE 
 
UK Legal Advisor              Stephenson Harwood LLP 
                              1 Finsbury Circus 
                              London EC2M 7SH 
 
Jersey Legal Advisor          Mourant Ozannes 
                              22 Grenville Street 
                              St. 
                               Helier 
                              Jersey JE4 8PX 
 
German Legal Advisor          Mittelstein 
                               Rechtsanwälte 
as to property law            Alsterarkaden 
                               20 
                              20354 Hamburg 
                              Germany 
 
German Legal Advisor          Mittelstein 
                               Rechtsanwälte 
as to general matters         Alsterarkaden 
                               20 
                              20354 
                               Hamburg 
                              Germany 
 
                              Taylor Wessing Partnerschaftsgesellschaft 
German Legal Advisor as        mbB 
to German partnership         Thurn-und-Taxis-Platz 
 law                           6 
                              60313 Frankfurt 
                               a.M. 
                              Germany 
 
                              Numis Securities 
Sponsor and Broker             Limited 
                              45 Gresham 
                               Street 
                              10 Paternoster 
                               Square 
                              London 
                              EC2V 
                               7BF 
 
Independent Property          Jones Lang 
Valuer                         LaSalle GmbH 
                              Rahel-Hirsch-Strasse 
                               10 
                              10557 
                               Berlin 
                              Germany 
 
Auditor                       RSM UK Audit 
                               LLP 
                              25 Farringdon 
                               Street 
                              London EC4A 
                               4AB 
 
 
 

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September 29, 2022 02:00 ET (06:00 GMT)

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