Although rent controls (the ‘Mietendeckel’), ruled unlawful and repealed in April 2021, disrupted the Berlin residential property market, this has not prevented free market rents and condominium prices from increasing further amid a continuing housing shortage. Against this background, H121 results from Phoenix Spree Deutschland (PSD) showed good progress as it resumes its core rent reversion strategy.
Companies: Phoenix Spree Deutschland Fund
The repeal of the Berlin rent cap (the ‘Mietendeckel’), ruled unconstitutional, is a significant positive for Phoenix Spree Deutschland (PSD). It allows a resumption of its core reversionary rent strategy, providing greater flexibility in the extraction of the value embedded in the portfolio. With a continuing discount to net assets, the board has stepped up the share repurchase programme, aiming to ensure that the share price better reflects its view of intrinsic value and the improved outlook.
The Berlin rent cap has disrupted the market, but with a continuing housing shortage and new investment curtailed, free-market rents and condominium prices continued to increase in FY20, driving continuing strong returns for Phoenix Spree Deutschland (PSD). As discussed in detail in our December initiation note, pending a resolution of the rent cap legal challenge, PSD has sought to mitigate the effects while maintaining strategic flexibility; a resolution, which PSD expects by mid-year, will de
The Berlin residential property market remained resilient in H220 despite COVID-19 and introduction of the rent cap. Phoenix Spree Deutschland (PSD) saw a 6.3% like-for-like increase in FY20 valuations, supporting strong growth in EPRA NAV per share, above our forecast. As discussed in detail in our December initiation note, pending a resolution of the rent cap legal challenge, PSD has sought to mitigate the effects while maintaining strategic flexibility; a resolution, which PSD expects by mid-
H220 condominium sales increased strongly at a healthy c 20% average premium to book value and disposal proceeds have supported continuing share repurchases at a c 30% discount to net asset value (NAV), enhancing value creation. As discussed in detail in our December initiation note, pending a resolution of the rent cap legal challenge, so far Phoenix Spree Deutschland (PSD) has sought to mitigate the effects while maintaining strategic flexibility; a resolution, which PSD expects mid-year, will
Phoenix Spree Deutschland (PSD) is a pure play on Berlin residential property, where excess demand drives free market rent growth. H120 financial performance was robust despite the COVID-19 pandemic and the first effects of Berlin rent controls. Recent full implementation of the legislation will significantly reduce FY21 rental income and peg rents for five years, but it remains PSD’s firm view that the legislation will ultimately be ruled unconstitutional and overturned. Our central scenario (s
There was an eclectic mix of property companies to feature in the top price movers for September. Top of the tree was private rented sector and residential development specialist Sigma Capital Group, with a 34.2% rise. The group launched a £1bn joint venture with EQT Real Estate, the real estate platform of global investment firm EQT, to deliver 3,000 private rental homes in Greater London. Micro-cap investor Panther Securities also hit double-digit gains, while Macau Property Opportunities saw
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Palace Capital has released a good trading update of for the 6 months to 30 September. The Group has achieved good progress both across the portfolio and in sales achieved at Hudson Quarter. With cash reserves rising, the Group continues to look for value creative opportunities to recycle capital which should realise value for shareholders. Buy
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We see the UK Government’s Net Zero Strategy as being overall helpful but not especially definitive. Amongst our coverage group, Drax Group (DRX LN) and Velocys (VLS LN) benefit from the Humberside CCS cluster prioritisation and Velocys from SAF support. The amount of renewables is likely to boost the need for flexibility solutions where Drax, Gore Street (GSF LN) and SIMEC Atlantis (SAE LN) can benefit. Hydrogen companies ITM (ITM LN) and Powerhouse Energy (PHE LN) are likely to find support. T
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The third quarter continued to enjoy record CIB revenues and loan provision recoveries. Consensus expectations have now largely aligned with our projections, thus leaving limited upside potential in our view.
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What’s new: Tatton’s interims trading update confirm it has “delivered strong growth in all its key metrics during the period including revenue, profits and assets under management” (AUM). It is “trading in line with expectations”.
Companies: Tatton Asset Management Plc
Non-Standard Finance (‘NSF’), one of the leading providers of unsecured credit to UK adults, published interim results for the half year to 30 June 2021 on 28 September. Overall, these showed a significantly lower loss before tax due to improved operational performance and lower below the line charges. The group also reported that current trading was ahead of plan primarily due to strong collections performance. Discussions with the FCA regarding the redress programme for guarantor loans custome
Companies: Non-Standard Finance Plc
Updating at the end of H1, Urban Logistics REIT (“ULR”) continued to deploy capital, with 2 further transactions in the last weeks of H1 bringing the total to £103m since the last raise (£109m in Jul-21). There is a further £50m in advanced stages and a £400m pipeline beyond that. Yields are in line with expectations and assets are pregnant with active management opportunities, which ULR thrives on. The board is seeking to move to Premium List to facilitate future growth. We leave forecasts unch
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AuM pushed on in Q2, hitting £10.8bn – including the acquisition of the Verbatim funds (+13% in H1 organic only). Crucially, net inflows have remained strong through the whole of H1 at £109m avg pcm. This flow momentum underpins an encouraging outlook, both near and medium-term. We leave our forecasts unchanged although note risk to the upside heading into H2. We will review our model again at the Interims. Given the pace of growth and scale of opportunity from already established relationships,
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Devolver Digital to join AIM, an award-winning digital video games publisher and developer in the indie games space. Recently awarded indie 'Publisher of the Year 2021' by GamesIndustry.biz. Offer TBA. Due early Nov.
Life Science REIT to join AIM raising up to £100m. This will be the first London listed real estate investment trust (REIT) focused on UK life science properties providing investors with exposure
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Gore Street’s trading update confirms expectations of a strong trading environment for batteries in both the GB and Irish markets. Driven principally by high gas prices creating electricity market volatility and with tight capacity margins likely to remain, we see the company continuing to generate excess cash returns in this financial year at least.
Companies: Gore Street Energy Storage Fund PLC
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ATOM headquartered in Leeds, focussed on the large-scale production of green hydrogen and ammonia intends to join AIM towards the end of the year. ATOME intends to be spun-out from AIM-listed President Energy Plc, an oil and gas company which has incubated and financially supported ATOME to date, by way of a dividend in specie and flotation.
Devolver Digital to join AIM, an award-winning digital video games pu
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Arrow Exploration Corp. (AIM: AXL ; TSXV: AXL) , the oil and gas exploration and production company, has conditionally raised approximately £8.8m and is due to complete its dual listing on AIM on 25 Oct. Market cap c£13.1m.
Devolver Digital to join AIM, an award-winning digital video games publisher and developer in the indie games space. Recently awarded indie 'Publisher of the Year 2021' by GamesIndustry.biz.
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Currently, Gore Street Energy Storage Fund (GSF) primarily relies on revenue from frequency response services, including Dynamic Containment (DC), to estimate near-term returns. The dislocation in the UK power market has led to a sharp rise in returns available from energy arbitrage leaving GSF’s assets well placed to benefit from this increased volatility. In September, those of GSF’s GB storage assets that participated in the actively-traded GB power markets generated revenues that were signif
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