Phoenix Spree Deutschland Limited Acquisition of Brandenburg Apartment Complex (2301X)
18 Diciembre 2019 - 01:00AM
UK Regulatory
TIDMPSDL
RNS Number : 2301X
Phoenix Spree Deutschland Limited
18 December 2019
18 December 2019
Phoenix Spree Deutschland Limited
Acquisition of Brandenburg Apartment Complex.
Phoenix Spree Deutschland Limited (LSE: PSDL.LN), the UK listed
investment company specialising in German residential real estate,
is pleased to announce that it has notarised on an apartment
complex in Brandenburg (the "Property" or "Acquisition").
The Property is a former barracks, comprising 259 residential
units, one commercial unit and 210 parking spaces. It was
redeveloped in 2018/2019 and benefits from efficient floor plans
and new build technical standards.
Highlights:
-- Property located in the Greater Berlin region, 30 minutes
from the centre of Berlin in an area unaffected by the proposed
Mietendeckel rent controls;
-- Share deal with total asset value of EUR43.5 million (GBP36.3
million) and net consideration of EUR24.2 million (GBP20.2 million)
excluding acquisition costs;
-- Transaction intended to be refinanced during 2020, using existing acquisition facility;
-- Refurbishment programme underway, 154 units (60%) completed
in 2018/19 with 40 units planned for completion in Q1/2020 and 65
units in Q4/2021;
-- Additional new build potential of a further 60 units;
-- Price per square metre of EUR2,674 which represents an
estimated prospective gross yield of 4.1%;
-- Average residential rent per sqm is EUR9.02; new lettings in
2019 (22 new leases) of up to EUR14.01 per sqm;
-- Acquisition expected to complete in December 2019.
Attractive location with favourable demographics
The Property is attractively located in Blankenfelde--Mahlow, a
municipality 7 km south of Berlin. It is not located in a
conservation zone, is unlisted and unaffected by the proposed
Mietendeckel provisions. There are excellent transport connections
to central Berlin and the new Berlin Brandenburg Airport is located
10 km northeast. The micro-location is largely characterised by
residential buildings with good infrastructure, including retail
shopping, supermarkets, banks, kindergarten and schools.
The population in Blankenfelde has increased by 32% within the
last 10 years and it is anticipated this will increase further as
the deficit of housing supply in central Berlin will lead to a
higher demand in the surrounding metropolitan area. The stock of
above standard rental housing has lagged demand and asking rents in
the surrounding area are estimated to have increased by 13% within
the last 12 months.
Significant asset management potential
The Property has benefitted from its redevelopment in 2018/19
and a refurbishment programme which has seen 155 units receive new
facades and insulation, new windows, balconies, electricity, pipes
and outside facilities. A further refurbishment of 40 units is
ongoing and expected to be completed to the same standard by the
end of Q1/2020. The last part of the housing complex will be
vacated before the end of 2020, after which the redevelopment of
another 65 units is expected to be completed within a twelve-month
period. The entire complex is heated by a thermal power
station.
Further new build and densification potential
In January 2021 a further commercial unit will become vacant
with outline planning permission for a new three-storey building
with approximately 15 units. Outline planning permission has been
sought for the construction of a further residential building and
the complex offers further densification potential. In total, the
whole complex offers new build potential for approximately 60
additional units which is not reflected in the current underlying
IRR targets.
The Acquisition will initially be financed by existing cash
resources and assumes outstanding bank debt of EUR16.4 million. It
is intended that this will be refinanced in the new year.
Robert Hingley, Chairman of Phoenix Spree Deutschland Limited,
commented:
"We are delighted to announce this acquisition which
demonstrates continued opportunity, despite the uncertain current
regulatory environment. The property meets our strict investment
criteria, is well-located with strong population and demographics,
and there is significant potential to add value through our active
asset management strategies.
"In addition to enabling us to take advantage of acquisition
opportunities, our recent refinancing has also enabled us to
deliver further value to shareholders through share buy-backs at a
significant discount to EPRA NAV. Our condominium strategy also
continues to progress well."
The Company expects to announce the year-end 2019 valuation for
its Portfolio of investment properties in late January 2020.
This announcement contains inside information.
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 +44 (0)20 7353 4200
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END
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