18th Oct 2019 09:57
(Alliance News) - Berlin-focused real estate investment firm Phoenix Spree Deutschland Ltd on Friday said it has started a share buyback scheme, as it reported an uptick in condominium sales so far in the second half of 2019.
The firm, which said shares are trading at a 24% discount to the end of June net asset value, will buy back 10% of its issued share capital. Phoenix Spree said it was taking advantage of a weaker share price and healthier finances after it secured a new loan agreement in September.
Phoenix Spree said: "The completion of a new EUR240 million term loan on improved terms provides additional liquidity to take advantage of opportunities arising from market disruption caused by changes to the rent laws, as well as weaknesses in the share price."
Phoenix Spree shares were 3.9% higher at 324.00 pence each on Friday morning in London, 24% lower than its June 30 EPRA net asset value of 424.00p.
The company said liquidity was also boosted by a rise in condominium sales, ahead of its book value at the end of the interim period.
Phoenix Spree said the average price per square metre was EUR4,685, 22% higher than the June 30 book value. A total of 10 units have been sold for an aggregate price of EUR3.8 million, which was also 52% higher than the EUR2.5 million it secured from four condominium sales in the first half.
The company recently entered into an agreement with German real estate firm Accentro AG, who will market Phoenix Spree's remaining 16 units in the Boxhagener Strasse district of Berlin.
Phoenix Spree said: "There has been an encouraging start to the marketing of the remaining occupied Boxhagener Strasse units by Accentro, with a number of notarisations expected by the year-end."
Chair Robert Hingley added: "I am delighted we have seen an acceleration in condominium sales since the half-year end and that our partnership with Accentro has made a promising start. We look forward to further progress as Accentro begins to market other properties on our behalf.
"Our ability to convert units to be sold at a premium to book value underpins the strategic optionality and value within the portfolio. We are also pleased that our refinancing has allowed us to take advantage quickly of the share price weakness and start buying back shares at a significant discount to net asset value."
The company took aim at measures outlined by Berlin local government to introduce a rent cap, labelling the proposals as unlawful.
The firm explained: "In Germany, residential tenant law is governed by the German Civil Code and is therefore a matter for the federal and not state government. There is considerable and mounting legal opinion supporting this view."
By Eric Cunha; [email protected]
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