Berlin resi specialist Phoenix Spree refinances debt on improved terms

The UK-listed Phoenix Spree Deutschland (PSD), a pure-play investor in Berlin residential housing, said it had recently completed a new €60m loan facility and refinancing of its existing debt on better terms.

The new loan was agreed with Natixis Pfandbriefbank AG, and is made up of two components - a €45m Acquisition Facility and a €15m Capex Facility.

The loan matures in September 2026, and is charging an interest rate of 1.15% over 3-month Euribor. PSD said it is non-amortising when drawn, and can be used to finance up to 100% of the total costs of both acquisitions and capex, while special terms were agreed to protect against adverse interest rate movements.

PSD has been undertaking an extensive upgrading programme on its Berlin apartments, particularly since the abolition of the Mietendeckel last year. The PSD portfolio was valued by JLL last year at €778m.

PSD also refinanced its debt provided by Berliner Sparkasse, leveraging the increase in valuation of a number of its assets to release a further €14.9m of equity. The refinancing, at interest rates lower than the current portfolio average, with Berliner Sparkasse amounted to €49.7m, with the maturities remaining unchanged, at between five and six years. The equity released is earmarked for re-investment into the portfolio, including future potential share buy-backs, said the company.

According to Robert Hingley, company chairman, "Against positive long-term demographic trends and a stabilising political backdrop, the completion of these transactions underpins our confidence in the future of the Berlin residential property market and will allow us to continue to deliver value to our shareholders."

The company's share price has been in solid recovery mode since its initial plunge at the start of the pandemic, compounded by the uncertainty in Berlin about the legal validity of the Mietendeckel, since swept away by Germany's constitutional court. The recently-announced half-year earnings per share were €0.17 versus €0.12 the previous year.