27th Sep 2018 11:23
LONDON (Alliance News) - Germany-focused real estate investment company Phoenix Spree Deutschland Ltd said on Thursday its profit dropped sharply after a fall in the fair value gain on investment properties.
Pretax profit for the six months to the end of June dropped by 69% to EUR19.4 million from EUR63.1 million the year before, due to a fall in gains in the fair value of investment property to EUR21.7 million from EUR70.1 million.
Gross rental income dipped to EUR9.1 million from EUR9.5 million the prior year, reflecting the sale of the Northern German portfolio in April, and the Nuremberg & Furth portfolio in June 2017.
EPRA net asset value per share rose to EUR4.23, up from EUR3.34, however as at June 30 Phoenix Spree's portfolio was valued at EUR583.7 million, down from EUR416.0 million on the same date the year before.
Phoenix Spree declared an interim dividend of EUR2.35 per share, up 3.1% from EUR2.28 the peior year.
The company said the demographic trends in Berlin remains favourable with continued population growth and job creation, and significant potential remains in the portfolio to create value through reversionary letting and condominium sales.
"Berlin property values have grown at a significant rate in recent years and, although the demographics remain compelling, this suggests that scope for further market yield compression is now more limited. However, the board continues to see significant embedded value within the portfolio, as demonstrated in the first half of the year by improving rents and further condominium sales at a premium to the portfolio's rental property valuations. The board looks forward to the second half of this year with confidence," said Chairman Robert Hingley.
Shares in Phoenix Spree Deutschland were up 0.6% at 395.00 pence on Thursday.
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