Financial results for the year ended 31 Dec 2024

30 April 2025

Phoenix Spree Deutschland Limited

(the "Company" or "PSD")

Financial results for the year ended 31 December 2024

Phoenix Spree Deutschland Limited (LSE: PSDL.LN), the UK listed investment company specialising in Berlin residential real estate, announces its full year audited results for the financial year ended 31 December 2024. The Board also provides a further update on the Company's strategy to significantly accelerate condominium sales and reduce debt.

HIGHLIGHTS OF THE YEAR

Financial and operational Summary

1 - EPRA metrics defined and calculated in note 27.

2 - Calculated at FX rate GBP/EUR 1.2097 as 31 December 2024 (2023: GBP/EUR 1:1.153)

3 - Net LTV uses nominal loan balances (note 22) rather than the loan balances on the Consolidated Statement of Financial Position which include Capitalised Finance Arrangement Fees.

4 - Like-for-like excludes the impact of disposals in the period.

Strategic repositioning

· Completion of €75.9m sale of a 385-unit portfolio comprising 16 properties to funds managed by Partners Group in December 2024.

· Debt terms amended, increasing permitted condominium sales assets from 6 to 40 properties.

· Reduction in net debt during the financial year by €89.9 million, lowering net LTV from 46.3% to 40.3%, with a further reduction expected, driven by condominium sales.

· Resolutions to continue the Company and amend its Investment Objective and Policy passed at EGM on 12 March 2025.

· Accelerated condominium sales programme underway, with stock available for sale expected to rise from 108 units in December 2024 to 942 units by Q3 2025.

Portfolio valuation increase

· Condominium values have remained resilient, and Private Rented Sector ("PRS") valuations have stabilised, though at significantly lower levels than the 2022 peak.

· On a like-for-like basis (adjusted for disposals), the Portfolio value rose 0.8% in 2024 and 3.2% in H2 2024.

· Condominium Portfolio value grew 9.0%, driven by PRS properties redesignated under the accelerated condominium sales strategy.

· PRS Portfolio value fell 6.3% on a like-for-like basis, but the 2.8% decline in the second half of the year was the smallest since the real estate downturn began in 2022.

Condominium sales accelerating

· 2024 condominium notarisations increased by 31% versus 2023, reaching €9.4 million, with vacant units sold at an average of €5,027, a 39.3% premium to the 2023 Portfolio per sqm valuation.

· 2025 performance to date:

o  34 units notarised for €9.3 million, a 169% increase versus the same period in 2024, at an average price per sqm of €3,999.

o  Further reservations pending notarisation for 10 units worth €3.4 million.

o  Vacant units sold at €4,738 per sqm, a 30.5% premium to the Portfolio's 31 December 2024 valuation; occupied units sold at €3,608 per sqm, a 0.6% discount.

Rental market remains resilient

· Reversionary reletting premium remains high, reflecting ongoing shortage of Berlin rental supply.

· New residential leases during the year signed at an average premium of 31% to passing rents, or

€13.9 per sqm, a record high.

· Like for like rent per sqm growth slowed to 1.6%, reflecting a lower level of reletting.

· EPRA vacancy of 1.5% (2023: 2.0%), a record low. Residential unit churn increased to 8.7% (2023: 6.6%).

Outlook

· Following the continuation vote, the Company is advancing with a managed portfolio realisation programme, primarily aimed at accelerating condominium sales.

· The Company remains optimistic in achieving its target annualised condominium sales rate of €50 million by the end of 2025.

· Sales prices for condominiums in Berlin per sqm are expected to remain significantly higher than the equivalent values of PRS properties.

· Discussions in relation to the refinancing of debt maturing in Q3 2026 are currently underway, and aim to increase the number of condominium sales projects that can be made available for sale at any time and enhance flexibility for capital returns to shareholders.

· Conditions in the investment market for PRS properties have shown recent signs of improvement. However, the current US administration's imposition of higher trade tariffs has the potential to impact investor sentiment and real estate asset demand.

Robert Hingley, Chairman of Phoenix Spree Deutschland, commented:

"I am pleased to announce that our Portfolio has reached a turning point, achieving its first like-for-like valuation increase since the broader German residential market downturn began in 2022.

The significant divergence in price per square meter between condominiums and PRS properties that has been observed in the Berlin residential market in recent years is expected to continue, and it is against this backdrop that the Company plans to materially accelerate condominium sales in 2025 and beyond. The company remains on track to deliver on its 2025 condominium sales targets.

The Company's strategic outlook has been further improved by recent enhancements to its balance sheet. Asset disposals completed in December 2024 have already contributed to a considerable debt reduction, with ongoing condominium sales expected to drive further deleveraging. Additionally, refinancing discussions are underway with the aims of improving operational and financial flexibility, further enhancing the Company's capacity for future condominium sales and expediting capital returns to shareholders.

Annual Report and Accounts

The full Annual Report and Accounts will shortly be available to download from the Company's webpage www.phoenixspree.com. All page references in this announcement refer to page numbers in the Annual Report and Accounts. The Company will submit its Annual Report and Accounts to the National Storage Mechanism in the required format in due course, and it will be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

For further information, please contact:

CHAIRMAN'S STATEMENT

The past year has marked a significant change in the strategic direction of the Company. During this time, the Board conducted a comprehensive review of options to address the Company's substantial share price discount to EPRA NTA per Ordinary Share and to maximise value for shareholders. After extensive engagement with our stakeholders, we determined that a managed Portfolio realisation, focused on the accelerated sale of individual apartment units ("condominiums"), was the most effective strategy to achieve this goal.

Throughout 2024, the German residential investment market consistently demonstrated that sales prices for individual condominium units were more resilient than those for PRS properties. For Phoenix Spree, this was illustrated in 2024 where, on a per sqm basis, condominium sales values were over 90% higher than from single PRS property sales. This clear divergence underpins our focus on accelerating condominium sales as the primary mechanism for delivering shareholder value. A full update on our progress to date can be found in the report of the Property Advisor.

To support this strategy, in December 2024, the Company secured amended financing terms to the existing facility with its principal lender, enabling a significant acceleration of the condominium sales programme in 2025 and beyond. At the same time, the Company completed the strategic disposal of 16 properties, encompassing 385 units, to facilitate these financing adjustments.

Continuation vote

The Company's Articles of Association require a vote on the continuation of the Company as a closed- ended investment vehicle at regular intervals. This year, the Board proposed the continuation vote be held earlier than originally scheduled, providing clarity and certainty regarding the Company's future direction and to approve the necessary amendments to the Company's Articles of Association and investment policy to align with its new strategy.

Shareholders overwhelmingly voted in favour of the Company's continuation. This decision ensures that the Company can now proceed with its carefully managed strategy to realise the value of its assets, further reduce debt levels, and, ultimately, return capital to shareholders.

Financial results

I am pleased to report that the second half of the financial year marked a turning point, with the Portfolio registering its first like-for-like valuation increase since the broader German residential market downturn began in 2022. As at 31 December 2024, the total Portfolio value stood at €552.8 million. On a like-for-like basis (adjusted for disposals), the Portfolio value increased by 0.8% during the year and by 3.2% in the second half of 2024.

Reflecting the loss made on the strategic disposal mentioned above, which was necessary to secure the amended refinancing terms to allow the Company to sell condominiums at scale, the Euro EPRA NTA total return per share was (10.4)% over the year. The sterling EPRA return was (14.6)% percent.

A more comprehensive review of the financial and operating performance of the Company for the financial year to 31 December 2024 can be found in the report of the Property Advisor.

Responsible business

We remain committed to upholding ethical and transparent business practices. Our Corporate Responsibility Plan, "Better Futures," continues to guide our operations, focusing on five key pillars: Tenant Satisfaction, Environmental Stewardship, Social Responsibility, Community Investment, and Robust Governance.

These pillars drive our efforts to reduce our environmental footprint, respect all individuals affected by our operations, provide a high standard of tenant services, contribute meaningfully to local communities, and ensure strong accountability and oversight.

Our tenants

While our future strategy has changed, we remain fully committed to the wellbeing of our rental tenants. Over the past year, we have continued to invest in our properties to ensure they provide high- quality living spaces. We are proud that our tenant satisfaction surveys demonstrate consistently high levels of satisfaction with both the quality of our apartments and the efficiency of our rental process.

We recognise the broader challenges posed by rising living costs and continue to work constructively with those in greatest need of support.

I am pleased to report strong tenant engagement in our condominium sales activities. All tenants in rental properties designated for sale have been contacted, and the process has been thoroughly explained. They have also been offered the opportunity to purchase their rental apartments outright.

Environmental stewardship

Environmental stewardship remains a cornerstone of our business strategy. As a member of the European Public Real Estate Association (EPRA), we continue to adhere to EPRA's Best Practice Recommendations to ensure transparency in our sustainability reporting. I am pleased to announce that, for the third consecutive year, our efforts were recognised with a Gold Award at the 2024 EPRA Sustainability Awards. This reflects our dedication to industry-leading standards in environmental and social responsibility reporting.

The Company has entered into a framework agreement with a leading provider of green solutions for heating, sustainability and ESG for residential properties, to test and supply heating optimisation systems. Subject to successful testing, the Company intends a broader roll-out across a substantial part of the PRS Portfolio.

Charitable initiatives

Our commitment to being a responsible corporate citizen extends to our charitable endeavours, guided by our Community Investment Policy. We continue to focus on supporting charities that address homelessness and help families.

In Berlin, the Company's support for The Intercultural Initiative and Laughing Hearts charities continues to provide crucial assistance to women, children, and those in social care. In London, our Property Advisor's partnership with homeless charities SPEAR and SHP (Single Homeless Project) is helping to address the needs of homeless individuals through accommodation, health support, and employability programmes. Additionally, our Property Advisor's support for Home-Start is positively impacting the wellbeing of families with young children in the UK.

Board governance

The Board remains committed to maintaining a strong corporate governance culture. We continue to follow the principles of good corporate governance as outlined in the Association of Investment Companies Code of Corporate Governance ("AIC Code"). Further details on how the Company has implemented and complied with the provisions of the AIC Code can be found in the Directors' Report.

Property Advisor

2024 has been another productive year for QSix, the Company's Property Advisor. In addition to its day- to-day asset management responsibilities, QSix has played a key role in laying the groundwork necessary for the Company to implement its accelerated condominium sales strategy.

In June 2024, the Board finalised a new Property Advisory and Investor Relations Agreement with QSix, which introduced revised fee arrangements. This agreement resulted in a 14% reduction in ongoing fees year-on-year and a 40% reduction compared to the fee run rate at the end of 2022.

QSix has additionally committed to using the post-tax proceeds from any future disposal fees received under the terms of the agreement to purchase shares in Phoenix Spree. To date, QSix has acquired 299,917 shares under this agreement, with further purchases expected during 2025. The Board believes these updated arrangements further strengthen the alignment of interests between QSix and the Company.

Outlook

Following a significant three-year market downturn, PRS values are stabilising, with transaction volumes showing signs of improvement since late 2024. However, any rebound is likely to be gradual.

The significant divergence in price per square meter between condominiums and PRS properties is expected to continue, and it is against this backdrop that the Company is significantly accelerating condominium sales in 2025 and beyond.

The December 2024 portfolio disposal has achieved a material reduction in leverage, with further reductions expected through ongoing condominium sales. The Company is actively progressing the refinancing of its primary lending facility, which is required to enable shareholder distributions.

In recent weeks uncertainty created by the imposition of high trade tariffs has led to increased financial market volatility. Although it is too early to predict any potential impact on buyer confidence as it relates to the Berlin condominium and PRS markets, the Company is on track to achieve its previously announced condominium sales targets.

REPORT OF THE PROPERTY ADVISOR: ACCELERATED CONDOMINIUM SALES STRATEGY

Background

The European real estate sector continues to face challenges brought on by higher interest rates, subdued investor sentiment and a downturn in property values.

Reflecting these headwinds, the Company's share price has not fully reflected the intrinsic value of its Portfolio, with its shares continuing to trade at a substantial discount to EPRA NTA per share.

Since the onset of the downturn in European real estate values, the Company has prioritised optimising asset sale proceeds and reducing its outstanding debt.

A polarised market

The Berlin property market has demonstrated a notable disparity in achievable sales values per square meter between condominiums (individually owned apartments) and PRS properties (apartment blocks intended for private rental). While condominium prices and transaction volumes have remained broadly stable, valuations for PRS properties have experienced a sharp decline since their peak in 2022. This trend was reflected in the Company's disposal progress in 2024, where condominium sales achieved average per sqm valuations that were 92% higher than those of individual PRS property sales. This polarisation has shaped the Company's strategy, which now prioritises unlocking value through increased condominium sales.

To facilitate this strategy, the Company was required to amend the terms of its principal debt facility. While the Company has no debt maturing until September 2026, its previous financing arrangements limited the number of condominiums that could be marketed at any given time to 6 properties.

Condominium potential within the Portfolio

As at 31 December 2024, the Portfolio comprised 74 properties, of which 60 are legally divided for condominium sales. Following the debt amendment, 40 properties are now permitted for inclusion as condominium sales projects at any one time. Accordingly, plans are in hand to make available for sale properties comprising 942 units, representing 44% of the total Portfolio.

An additional 20 legally subdivided properties containing 739 units (34% of the Portfolio) remain excluded from current sales activities. The Company is currently working on securing new financing, with the aim of aligning the new debt arrangements more closely with the full condominium potential of the Portfolio.

The remaining 14 PRS properties are not divided as condominiums and have limited prospects of obtaining consent for such division.

Condominium sales process

For the 40 properties currently approved for inclusion in condominium sales projects, the sales process is being carried out in phases and, by the end of 2025, the total number of units available for sale is projected to reach 942.

Execution of the accelerated condominium sales plan has required an appreciable increase in resources to prepare, market and sell units. To facilitate this, the Company has partnered with two leading specialist condominium sales platforms, Engel & Völkers and Lübke Kelber. These platforms will significantly broaden the reach, particularly internationally, of condominium marketing activities. In conjunction with the Property Advisor, these brokers have provided an assessment of each property's potential market price for vacant and let units. Throught the duration of the condominium sales programme, it is currently expected that an average value per sqm of approximately €5,000 can be achieved for vacant units and €3,500 for tenanted units.

Condominium preparation and marketing

1 Projected sales value based on 2024 estimates agreed with Engel & Völkers and Lübke Kelber, based each building's potential market price for vacant and let units. Assumes each sales project achieves sales split of 50% vacant and 50% occupied and no change in condominium pricing for the duration of each condominium sales project.

Preparations for marketing 10 properties in tranche 2, comprising 258 units, began in late 2024 and these are now being actively marketed by Engel & Völkers and Lübke Kelber. These properties were prioritised due to minimal capital expenditure requirements to facilitate sales. The number of units currently being marketed for sale has increased from 108 in December 2024 to 366 as at 28 April 2025.

A further 24 properties will be added to the condominium sales pool in two further tranches. Preparatory work on the next 12 properties (282 units) is underway, with capital expenditure projects to facilitate sales expected to conclude by the end of the first half of the financial year, enabling their marketing to begin. The final 12 properties (294 units), requiring more preparation, are expected to be market-ready by Q3 2025.

REPORT OF THE PROPERTY ADVISOR: FINANCIAL AND OPERATIONAL HIGHLIGHTS

Financial highlights for the twelve months to 31 December 2024

1 - Nominal loan balances used in calculation as per note 22 rather than balances on the Consolidated Statement of Financial Position which consider Capitalised Finance Arrangement Fees in the balance as per IAS 23.

2 - Calculated at FX rate GBP/EUR 1.2097 (2023: GBP/EUR 1:1.153)

3 - Further EPRA Net Asset Measures can be found in note 28 & 29

Financial results

Revenue for the financial year to 31 December 2024 was €28.1 million (2023: €27.5 million). The Company recorded a loss before tax of €39.5 million (2023: loss before tax €111.8 million). The primary diver of the reduced loss before tax in 2024 reflects a smaller revaluation loss of €5.4 million (2023: revaluation loss €97.3 million).

Property expenses declined by 5.9% over the year, due primarily to reduced property advisor fees. Administration expenses decreased by 12.1% as a result of decreased spend on legal and professional fees. Reported loss per share for the period was (€0.42) (2023: (€1.07)).

Reported EPRA Net Tangible Assets (NTA) per share declined by (10.4)% in the period to €3.55 (£2.93) (2023: €3.96 (£3.43)), primarily due to the dilutive impact of the portfolio disposal announced on 17 December 2024 which, alone, diluted EPRA NTA by 7.1%. The Euro-denominated EPRA NTA total return was (10.4)% (2023: (22.4%)), while the sterling equivalent was (14.6)% (2023: (24.0%)), a disparity driven by the pound's appreciation against the euro during the financial year.

Portfolio valuation

Condominium values remained resilient during the financial year and, for the first time since the decline in real estate values began in 2022, PRS valuations have begun to stabilise.

As at 31 December 2024, the total Portfolio value was €552.8 million, with an average value of €3,633 per sqm and a gross fully occupied yield of 3.3%. On a like-for-like basis (adjusted for disposals), the Portfolio value increased by 0.8% during the year (and by 3.2% in the second half of 2024), marking the first increase since the German residential market downturn began in 2022. The 31 December 2024 valuation is after the disposal of a portfolio of 16 properties which completed in late December 2024.

Reflecting the change in the Company's strategy, additional disclosure is provided to reflect the

constituent parts (PRS and Condominiums sales pool) of the Portfolio:

Table: JLL Valuation summary

Condominium Sales Portfolio value increase of 8.7 percent

As of 31 December 2024, the condominium sales pool (40 properties, 942 units) was valued at €278.0 million (€4,070 per sqm). The value per sqm of these properties rose by 8.7% over the year, primarily due to the transfer of PRS properties into the sales pool as part of the accelerated sales strategy, resulting in a shift from PRS rental valuations to condominium valuations. In the second half of 2024, these properties experienced an average valuation increase of 11.1%.

PRS Portfolio value stabilising

As at 31 December 2024, the PRS Portfolio (34 properties, 1,219 units) was valued at €274.8 million, with an average value of €3,277 per sqm. On a like-for-like basis, its value declined by 6.3% over the year. However, the 2.8% decline in the second half was the smallest recorded since the market downturn began in 2022.

Condominium Notarisations (2024)

Condominium sales accelerated in 2024, with 26 units notarised for a combined value of €9.4 million, a 31% increase versus 2023 (€7.2 million). Of these, 13 were vacant and 13 were occupied.

The average notarised price was €4,295 per sqm, a 21% premium to December 2023 carrying value of the Portfolio. Vacant units sold for an average price of €5,027 per sqm (39.3% premium), while occupied units sold for €3,430 per sqm (3% discount). These sales accounted for 28% of the stock of condominiums available for sale at the start of the year.

Condominium notarisations and reservations (2025 to date)

Conditions in the condominium market remain strong, with no discernible change in pricing dynamics versus those experienced during 2024.

Following the addition of 10 properties to the condominium sales pool in late December 2024, condominium sales activity has accelerated. As at 24 April 2025, 44 units have been notarised or reserved for a combined value of €12.73 million.

Year to date, 34 units have been notarised for €9.3 million, a 169% increase versus the same period in 2024. The average notarised sales price achieved year-to-date was €3,999 per sqm, a 10.2 % premium to the 31 December 2024 per sqm Portfolio average. Vacant units were sold for an average price of

€4,738 per sqm (a 30.5% premium to the average per sqm valuation of the Portfolio as at 31 December 2024), while occupied units sold for an average price of €3,608 per sqm (0.6% discount).

A further 10 units with a combined sales value of €3.4 million have been reserved for sale. It is expected that condominium sales will accelerate during the year ahead as preparatory work on further condominium projects is completed and they are brought to market.

Ratio of vacant to occupied units

The sales programme offers existing tenants first refusal to purchase their units before broader sales commence, with uptake exceeding initial expectations. Over time, demand is projected to shift toward vacant apartments. Over the 4-5 year sales cycle for each project, transactions are expected to split evenly between occupied and vacant units. The vacant inventory will primarily derive from natural tenant churn, as around 8% of tenants vacate their unit each year. Between 2016 and 2024, condominium projects implemented by the Company have had an average ratio of vacant to occupied units of 58.0%.

Ratio of notarisations to reservations

The time taken from a condominium unit being "reserved" (where the property is "held" for the buyer while they finalise financing and conduct due diligence) and "notarised" (making the sale agreement legally binding) is typically three to eight weeks. For this reason, properties that are added to the sales pool will initially exhibit a low ratio of notarisations to reservations.

To illustrate this, the table below shows that the 6 properties in the Portfolio available for sale prior to December 2024 (Tranche 1 , which has been in the condominium sales pool for a longer period of time) have a significantly higher ratio of notarisations to reservations than the 10 properties which have been added to the condominium sales pool more recently (Tranche 2).

Table: notarised / reserved units by tranche

Condominium sales velocity

The duration of the sell-down period for any given condominium property is significant in that it impacts both the timing and quantum of proceeds which, in turn, can be made available to pay down debt, reduce leverage and, ultimately, be returned to investors, subject to the successful renegotiation of the Company's primary debt facility falling due in September 2026.

Historically, properties that have been designated as condominium sales projects have taken four to five years from the first units being placed on the market to completion. To provide enhanced visibility on the current pace of condominium sales, the table below shows sales velocity on a monthly basis. The Average Annualised Sales Rate1 measures how quickly condominiums are sold (notarised) over time.

Table: condominium sales velocity

1. Average annualised sales rate is calculated by dividing the number of units sold in a given month by the total number of units available for sale at the beginning of that month. This result is then annualised, based on the number of days in the month, and averaged across historical months. To reduce volatility in the calculation, newly listed units are only included one month after marketing begins. This adjustment accounts for the typical delay before sales commence.

Table: Rental income and vacancy rate

Rental Income

Annualised contracted net rental income at 31 December 2024 was €18.0m, a decline of 19.3% versus the prior year. This was due to (1) a fall in the number of units following the portfolio sale of 16 properties announced on 17 December 2024, (2) a decline in the number of units within the Portfolio available for rent following condominium sales, and (3) a lower number of new leases signed during the year.

The Company has always managed rent-to-income multiples for new tenants conservatively and, notwithstanding current cost of living pressures, rent collection levels have remained stable.

Rental Growth

As of 31 December 2024, net cold rent increased to an average of €10.7 per sqm, up from €10.4 per sqm the previous year. On a like-for-like basis, rental income per square meter grew by 1.6%, compared to 4.1% in 2023. This slower growth reflects the Company's strategic emphasis on condominium sales, which prioritises capital expenditure on condominium projects over PRS properties. Other contributing factors include the termination of a lease with a municipality in order to redevelop and subsequently sell the property.

EPRA vacancy at record low

Reported vacancy as at 31 December 2024 was 8.0% (2023: 5.0%), reflecting an increase in units that have been made available for sale as condominiums. On an EPRA basis, adjusting for units undergoing development and refurbishment, the vacancy rate was 1.5% (2023: 2.0%), a new record low.

Residential reversionary re-letting premium steady at 31%

Market rents are at record levels, with new lettings across the Portfolio during the year signed at an average premium of 25.2% to passing rents (2023: 31.4%) or €13.8 per sqm (2023: €13.7 per sqm). For residential units only, new lettings were signed at an average 31.0% premium (2023: 32.9%) or €13.9 per sqm (2023: €13.6 per sqm).

During the year to 31 December 2024, 146 new leases were signed (2023: 255 new leases), representing a letting rate of approximately 8.5% of occupied units. (2023: 10.5%). The year-on-year decline is primarily attributed to more apartments are being made available for sale.

Portfolio investment

A total of €5.2 million was invested in the Portfolio during 2024 (2023: €9.4 million), recorded as capital expenditure in the financial statements. Additionally, €2.0 million (2023: €1.8 million) was spent on asset maintenance, which is expensed through the Profit and Loss account. There were no acquisitions during the year.

The decrease in capital expenditure in 2024 compared to the prior year is primarily due to reduced renovation and modernisation activities for vacant apartment improvements, reflecting a decline in unit turnover. However, capital expenditure in 2025 is expected to increase significantly, with a primary focus on preparing properties designated for condominium sales. Following the portfolio disposal in December 2024, the Company has sufficient cash reserves to fund all necessary capital expenditure required to optimise the sales values of units designated for condominium disposal.

Table: EPRA Capital Expenditure (€m)

Strategic disposal of 16 rental properties

In response to the downturn in the German real estate market that began in 2022, the Company marketed a significant portion of its Portfolio for sale, including single-property transactions and portfolios of apartment blocks. However, challenging market conditions prevented sales at prices the Board considered to represent fair value, with few transactions reaching completion.

However, to facilitate the amendment of the Company's primary debt facility, the Company announced in December 2024 the sale of a portfolio comprising 16 rental properties, comprising 385 units, for

€75.9 million. This strategic disposal, structured as a share deal, reflected a material discount to the June 2024 carrying value of these properties. Despite the discount, the sale was a critical step in securing revised financing terms, enabling the Company to significantly expand condominium sales.

While further rental property disposals are not ruled out, the current pricing differential between condominium units and PRS properties suggests that focusing on condominium sales will generate substantially greater capital returns for shareholders compared to the alternative of selling entire PRS properties.

Debt and gearing

The Company has loan facilities with two principal lenders, Natixis Pfandbriefbank AG and Berliner Sparkasse, with an average remaining duration of the loan book of 1.8 years and none of the Company's debt reaching maturity until September 2026.

As at 31 December 2024, the Company had gross borrowings of €269.6 million (2023: €324.0 million) and cash balances of €46.5million (2023: €11.0 million), resulting in net debt of €223.1 million (2023:

€313.0 million) and a net loan-to-value ratio on the Portfolio of 40.3 per cent (2023: 46.3 per cent). The reduction in gross debt from 2023 to 2024 was primarily a consequence of the portfolio sale of the 16 properties in December 2024 and the repayment of €38.8 million of associated Berliner Sparkasse debt. Further reductions also occurred as a result of condominium sales during the period, although this represented a smaller amount.

The majority of the Company's debt effectively has a fixed interest rate through hedging. As at 31 December 2024, the blended interest rate of the Company's loan book was 2.5 per cent (2023: 2.5 per cent). The blended cost of financing has remained stable despite various influencing factors, including adjustments in the cost of the unhedged portion of debt (with a relatively small notional amount) and the repayment of the Berliner Sparkasse debt.

Outlook

Geopolitical and macroeconomic

Although recent data indicates a recovery in transaction activity within Germany's residential real estate market during the latter half of 2024, uncertainties persist regarding the potential effects of escalating macroeconomic risks - particularly those stemming from the current US administration's imposition of higher trade tariffs - on investor sentiment and real estate asset demand.

Germany has embarked on a historic fiscal expansion, channelling €500 billion into infrastructure modernisation (transport, energy, and digital networks) and an equal sum into defence. This dual-track spending surge marks a departure from decades of fiscal conservatism, driven by geopolitical tensions and aging infrastructure. Constitutional reforms to the Schuldenbremse (debt brake) underpin these initiatives. Previously capping structural deficits at 0.35% of GDP, the revised framework permits borrowing for "future-oriented projects," including green energy and defence.

The bond market experienced significant volatility in early 2025, with German 10-year bond yields climbing 0.5% to reach 2.8% by March, as investors anticipated increased German debt issuance. This upward pressure later eased following the European Central Bank's rate reduction and heightened demand for German bunds, which have been viewed as a relatively safer haven during escalating global trade tensions.

Structural imbalances

There remains a significant and growing shortage of available residential accommodation in Berlin metropolitan areas, particularly Berlin itself, driven by persistent supply-demand imbalances. Whilst the population of Germany has grown by over 1.3 million since 2020, new construction activity has fallen significantly. Project cancellations hit a record high in 2024, and annual apartment completions are projected to fall to 175,000 by 2025 - far below the Federal Government's 400,000 unit annual target.

A widening cost-price gap has exacerbated supply challenges: since 2022 construction costs have risen by 28%, far outstripping new build price growth. This disparity has pushed tenanted multi-family property values 40% below replacement costs in many regions. New developments now typically focus on high-end or government-backed social housing, leaving Berlin's middle-market segment (the Company's core market) underserved.

Without policy support for development, supply-demand imbalances will deepen. Whilst the new coalition government aims to address the affordable housing crisis by accelerating construction through eliminating bureaucracy and financial incentives for cost-effective projects, it is unlikely that this will alleviate housing shortages in the near term. The outlook for Berlin rental values therefore remains positive.

Condominium supply shortage.

In 2021, The Federal Government introduced laws enabling States to prevent the division of apartment blocks into condominiums. The Berlin State Government has implemented these measures, significantly limiting the future supply of condominiums. The new German coalition government is expected to extend the life of this ban, further exacerbating the condominium supply shortage.

Berlin's inventory of condominiums is now largely restricted to units in grandfathered pre-approved projects under specific provisions of Berlin's Conversion Ordinance, along with properties below certain size thresholds exempt from the ban.

This regulatory landscape positions the Company's approved Berlin condominium portfolio as among the largest within the city.

Actionable opportunities

The Berlin real estate market is expected to maintain a notable valuation premium for condominium sales compared to disposals of traditional PRS properties.

While the Company's NAV discount is broadly consistent with that of its listed peers, its condominium- oriented portfolio sets it apart. Unlike competitors, where portfolios typically include fewer properties subdivided into condominium units, the Company is well positioned to leverage this differentiation as it undertakes a carefully managed Portfolio realisation programme designed to maximise shareholder value.

The Company's strategic outlook is further improved by recent enhancements to its balance sheet. Asset disposals completed in December 2024 have already contributed to significant debt reduction, with ongoing condominium sales expected to drive further deleveraging. Additionally, refinancing discussions are underway with the aims of improving operational and financial flexibility, further enhancing the Company's capacity for future condominium sales and expediting capital returns to shareholders.

KEY PERFORMANCE INDICATORS

For the financial year ended 31 December 2024, the Company has made changes to the key performance indicators ("KPI's") that have historically served to benchmark the Company's financial and operating performance. The evolution of KPIs reflects Berlin's evolving residential real estate dynamics and the Company's shift in strategic focus, with an emphasis on condominium sales.

The removal of EPRA vacancy and Portfolio rent per sqm as KPIs underscores Berlin's structurally tight rental market. Instead, the Company has reclassified these factors as stable market fundamentals, allowing greater attention to metrics that directly align with the Company's capital recycling and value- unlocking objectives. Additionally, dividend per share has been removed as a KPI, reflecting the current prioritisation of deleveraging over shareholder distributions.

The 2024 KPIs emphasise transparency around the Company's accelerated condominium sales strategy. Condominium sales velocity offers greater visibility into transaction activity. The inclusion of share price discount to EPRA NTA addresses the persistent valuation gap demonstrating management accountability for closing the disconnect between underlying asset values and equity market pricing. The addition of net loan-to-value (LTV) reinforces the Company's commitment to deleveraging.

Like-for-like Portfolio valuation, EPRA NTA per share and condominium sales have been retained as KPIs

The Company believes this recalibrated KPI framework aligns to value creation levers more directly within management's control, while deprioritising metrics rendered less relevant by Berlin's supply- demand dynamics.

Table: Changes to key performance indicators

Table: 2024 key performance Indicators

1 For any given year, share price discount to EPRA NTA is calculated using the sterling share price as at 31 December, the €/£ exchange rate as at 31 December and the Euro EPRA NTA as at 31 December.

PRINCIPAL RISKS AND UNCERTAINTIES

Effective risk management is fundamental to achieving our strategic objectives and delivering long- term sustainable value to our shareholders. Operating within the Berlin residential property market, we recognise the importance of proactively identifying, mitigating, and managing risks that could impact our business.

As with any property investment company, risks and uncertainties are inherent in our activities. These risks may have financial, operational, regulatory, environmental, or reputational impacts. Through a structured and disciplined approach to risk management, we aim to mitigate potential threats while also capitalising on opportunities as they arise.

Governance and accountability

The Board of Directors is ultimately responsible for overseeing risk management and ensuring that the principal risks, including emerging risks, are identified, evaluated, and effectively managed. Each year, the Board conducts a comprehensive assessment of the principal risks that could affect the Company's business model, financial performance, solvency, or liquidity. Regular reviews of risk exposures are integrated into Board meetings, enabling the Board to assess mitigation.

Decentralised risk identification

Our business model empowers the Property Advisor to identify, evaluate, and manage the risks relevant to their specific areas of responsibility. These assessments consider a range of factors, including operational, regulatory, and market-specific risks, as well as external influences such as geopolitical and macroeconomic developments. The Property Advisor provides regular updates to the Board, ensuring alignment with the Company's overall risk management framework.

Emerging risk management

Emerging risks are identified and evaluated at both the Company and Portfolio levels. This process includes assessing geopolitical developments, regulatory changes, market trends, and competitor activity.

Reporting and review

The Board prepares an annual summary of the Company's principal risks, mitigation strategies, and relevant policies. These risks represent the key challenges that could impact the Company's ability to deliver its strategic objectives.

Going concern

The Directors have reviewed projections for the period up to 30 June 2028, using assumptions which the Directors consider to be appropriate to the current financial position of the Group with regard to revenues, its cost base, the Group's investments, borrowing and debt repayment plans. These projections show that the Group should be able to operate within the level of its current resources and expects to manage all debt covenants for a period of at least 12 months from the date of approval of the financial statements. The Group's business activities together with the factors likely to affect its future development and the Group's objectives, policies and processes from managing its capital and its risks are set out in the Strategic Report.

The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, and, therefore, continue to adopt the going concern basis in the preparation of these financial statements.

Viability Statement

The Directors have assessed the viability of the Group over a three-year period to 30 June 2028. The Directors have chosen three years because that is the period that broadly fits within the strategic planning cycle of the business.

The Viability Statement is based on a robust assessment of those risks that would threaten the business model, future performance, solvency or liquidity of the Group, as set out in the assessment of principal risks on pages 17 to 23.

For the purposes of the Viability Statement, the Directors have considered, in particular, the impact of the following factors affecting the projections of cash flows for the three-year period ending 30 June 2028:

a) the potential operating cash flow requirement of the Company;

b) refinancing existing debt facilities prior to their maturity in September 2026;

c) seasonal fluctuations in working capital requirements;

d) property vacancy rates during the period;

e) capital and corporate expenditure during the period;

f) condominium and whole asset sales proceeds.

The model assumes stressed scenarios a) through to f) in the above list.

Financial modelling and stress testing was carried out on the Group's cash flows, taking into account the following assumption, which the Directors believe to reflect the conditions present in a reasonable 'low case' scenario over the forecast period if it proves not possible to amend the existing debt facilities such that condominium disposals are limited to those currently permitted, capex is maintained and self-funded.

After applying the assumption above, there was no scenario by which the viability of the Company over the next 12 months was brought into doubt from a cash flow perspective. Under the stresses set out above, cash flow mitigation would not be required during the three-year period. However, should mitigation be necessary, it may be obtained in the following ways:

· reducing or postponing discretionary capital expenditure, none of which is committed;

· disposing of whole property assets; and

· amending condominium pricing to increase rate of sales and expedite cash proceeds.

Under these stressed assumptions, the Group remains able to manage all existing banking covenant obligations during the period using the available liquidity to reduce debt levels, as appropriate.

The projection of cash flows includes the impact of already contracted property acquisitions. On the basis of this assessment, and assuming the principal risks are managed or mitigated as expected, the Directors have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the three-year period of their assessment.