New London listing for Phoenix Spree Deutschland
UK-based investment company Phoenix Spree Deutschland Ltd plans to take advantage of ongoing investor enthusiasm for the Berlin residential market by floating on the main market of the London Stock Exchange, with its initial listing scheduled for June 9th.
Phoenix Spree Deutschland is part of PMM Partners, founded in 2006 by a group of ex-UBS bankers who raised about €90m at the time to invest in – mainly- Berlin. The price of the float, which is being sole sponsored by Liberum Capital, will be based on the company’s net asset value, which was €144m at 31st December 2014.
The Jersey-incorporated closed-ended fund currently holds 114 assets in Berlin, along with Hannover, Bremen and Nüremberg with a gross value of €245.3m and yielding 4.1%. the bulk of the portfolio (82%) is residential, with the rest being garages, parking lots and commercial properties. Borrowings are currently 39%.
According to Phoenix Spree founding partner Mike Hilton, no new money is being raised in the IPO as none is required. The float will enable several early investors to exit, said Hilton, adding “There is quite a lot of corporate activity around the German residential property market, and from our perspective, the timing is very good to look to institutional investors to fund further growth.”
Hilton says he remains bullish on Berlin because of constrained supply. “Although new-build property is coming on, there isn't anything like enough of it. Last year, 4,000 properties were built in Berlin. The demand is for 20,000.”
“I can look at the buildings that the Phoenix Spree fund owns and can say they cost less than the bricks and mortar," says Hilton. "That is key. London is about momentum; it's touch and feel. Berlin is value.” The fund aims to deliver annual shareholder return of 8-10%, including a 2.5% dividend yield.