Final Results for the year ended 31 December 2021

RNS Number : 4815G

Phoenix Spree Deutschland Limited

30 March 2022

 

Phoenix Spree Deutschland Limited 
(the "Company" or "PSD")

Financial results for the year ended 31 December 2021

Strong performance with continued NAV growth and positive long-term trends

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 2021. 

Financial Highlights

	Year to 31 December 2021	Year to 31 December 2020	2021 v 2020 % change
Income Statement
Gross rental income (€m)	25.8	23.9	7.9
Profit before tax (€m)	45.3	37.9	19.4
Dividend (€cents (£ pence))	7.50 (6.27)	7.50 (6.59)	-
Balance Sheet
Portfolio valuation (€m)	801.5	768.3	4.3
Like-for-like valuation growth (%)	6.3	6.3	-
IFRS NAV per share (€)	4.74	4.48	5.8
IFRS NAV per share (£)1	3.98	4.04	(1.5)
EPRA NTA per share (€cents)2	5.65	5.28	7.0
EPRA NTA per share (£ pence)1,2	4.74	4.76	(0.4)
EPRA NTA2 per share total return (ˆ%)	8.4	8.8	-
Net LTV3 (%)	34.7	33.1	-
Operational Statistics
Portfolio valuation per sqm (€)	4,225	3,977	6.2
Annual like-for-like rent per sqm growth (%)	3.9	(15.8)	-
EPRA vacancy (%)	3.1	2.1	-
Condominium sales notarised (€m)	15.2	14.6	4.1

^{1 - Calculated at FX rate GBP/EUR 1:1.191 (2020: GBP/EUR 1:1.11 )
2 - New EPRA Best Practice guidelines from October 2019 introduced three new measures of net asset value: EPRA net tangible assets (NTA), EPRA net reinvestment value (NRV) and EPRA net disposal value (NDV). EPRA NTA is calculated on the same basis as EPRA NAV, and is the most relevant measure for PSD and therefore now acts as the primary measure of net asset value. Further information can be found on in this report.
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.}

EPRA NTA growth underpinned by significant condominium potential

· Record condominium notarisations of €15.2 million (37 condominium units) during the year to 31 December 2021.

· Average achieved value per sqm of €5,031 for residential units, a 21.7 per cent premium to 31 December 2020 book value of each property.

· Over 75 per cent of Berlin portfolio legally split into condominiums as at 31 December 2021, with a further 10 per cent in application.

New loan facility and refinancing, resumption of acquisitions

· New €60 million loan facility agreed with Natixis and announced on 25 January 2022, offering flexibility to pursue potential further acquisitions as well as continued investment into existing portfolio.

· Successful refinancing of €49.7 million of Berliner Sparkasse debt, releasing a further €14.9 million of cash.

· Net LTV remains conservative at 34.7 per cent (31 December 2020: 33.1 per cent).

· First acquisition since removal of Mietendeckel announced on 21 March 2022 - 17 semi-detached, residential properties in Berlin beltway as a new build, at a purchase price €18.5 million and projected fully occupied rental income of €652,670 per annum.

Continued value delivered through share buy-backs and dividend

· During the financial year ended 31 December 2021, the Company bought back a further 4,514,788 ordinary shares, representing 4.5 per cent of the ordinary share capital, for a total consideration of £17.7 million.

· Average price paid represents a 17.8 per cent discount to the EPRA net tangible assets per share as at 31 December 2020.

· Unchanged annual final dividend of €5.15 cents. Dividend increased or maintained since listing in June 2015.

Continued strong demand for Berlin residential property

· New leases in Berlin signed at an average 33.8 per cent premium to passing rents.

· 240 new leases signed during the year, with the average rent of all new lettings increasing to €12.2 per sqm, a 4.4 per cent increase on the prior year.

·   €9.5 million invested across the Portfolio (31 December 2020: €4.2m), allowing the Company to continue improving the quality of accommodation for its tenants.

· Collection of backdated Mietendeckel rents progressing well; as at 31 December 2021, in excess of 95 per cent had already been collected.

· A number of furnished apartments made available for refugees impacted by the Ukraine crisis for a rent-free period.

Outlook: Long-term Berlin demographic trends expected to remain positive

· Decreased availability of rental stock, exacerbated by the recently removed Mietendeckel, continues to support market rents and offers significant potential in surrounding 'Beltway' area.

· Net inward migration expected to strengthen when restrictions associated with COVID-19 are permanently removed.

· Potential for further valuation creation through condominium projects and sales. Condominium pricing expected to remain strong, particularly for centrally located Berlin apartments.

· Significant reversionary potential underpins future rental growth - increased capital expenditure expected to drive acceleration in reversionary rental income growth.

· New debt facility provides scope for further acquisitions, subject to strict acquisition criteria and benchmarked against alternative of share buybacks.

Robert Hingley, Chairman of Phoenix Spree Deutschland, commented:

"I am pleased that the Company has been able to deliver another strong performance with continued growth in property values and overall net asset value. The reversionary potential that existed within the Portfolio before the introduction of the Mietendeckel is again evident following its withdrawal, and the value within our Portfolio has been further underpinned by our ongoing ability to sell condominiums at a premium to book value.

Our new debt facility and refinancing has strengthened our balance sheet strength and liquidity, and it is pleasing that we have successfully completed our first acquisition since the removal of the Mietendeckel.

We are confident in the ongoing strength of the Berlin residential market and remain focused on continuing to deliver value to shareholders through further investment in our portfolio growth and quality.

Our thoughts are with those impacted directly and indirectly by the events that are unfolding in Ukraine and I am pleased to announce that PSD has made available a number of furnished apartments on a rent-free basis for refugees affected by the crisis. Although PSD has no direct exposure, we are prepared for the possible secondary effects in the form of higher energy prices and impact of inflation and continue to prioritise the wellbeing of our tenants."

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 has submitted its Annual Report and Accounts to the National Storage Mechanism, and it will shortly be available for inspection at  https://data.fca.org.uk/#/nsm/nationalstoragemechanism .

For further information, please contact:  

Phoenix Spree Deutschland Limited Stuart Young	[phone]
Numis Securities Limited (Corporate Broker) David Benda	[phone]
Tulchan Communications (Financial PR) Elizabeth Snow Oliver Norgate	[phone]

CHAIRMAN'S STATEMENT

I am pleased to report that PSD has delivered another strong performance. As at 31 December 2021, the Portfolio was valued at €801.5 million by Jones Lang LaSalle GmbH, a like-for-like annual increase of 6.3 per cent. The Euro EPRA NTA total return per share was 8.4 per cent over the year and the sterling return was 1.0 per cent, reflecting a rise in the value of sterling. The Company has additionally delivered record condominium sales and made further progress in condominium splitting. 

This result has been achieved despite the full implementation of the Berlin rent controls (the "Mietendeckel"), subsequent reversal in April 2021 and the ongoing impact that COVID-19 has had on the German economy.

Although the Mietendeckel did not cause transaction values in the Berlin residential property market to fall during the period in which it was in place, equity markets attached a significant risk premium to the valuation of listed Berlin residential property businesses. The removal of the Mietendeckel and the uncertainty it created, combined with our share buyback programme (at an average discount to 2020 yearend NAV of 17.8 per cent) and the notarisation of condominiums at a premium to prevailing book value, has underpinned a positive share price performance for the Company. During the financial year, PSD's share price significantly outperformed both the UK FTSE All-Share index and its listed German residential peers.

Further details relating to the Company's financial performance can be found in the Report of the Property Advisor.

Working with our stakeholders

The Board recognises the importance of operating with integrity, transparency and clear accountability towards its shareholders, tenants and other key stakeholders. We understand that being a responsible Company, balancing the different interests of our stakeholders and addressing our environmental and social impacts, is intrinsically linked to the success and sustainability of our business.

To this end, our 'Better Futures' Corporate Responsibility ('CR') Plan provides a framework to monitor existing activities better. It has five key pillars that have been integrated throughout our business operations: Protecting our Environment; Respecting People; Valuing our Tenants; Investing in our Communities and Governance.

During what has been a period of significant disruption caused by the dual impacts of the Mietendeckel and COVID-19, the Company's overriding priority has been the health and wellbeing of its tenants, work colleagues and wider stakeholders. Where necessary, the Company continues to support its tenants, both residential and commercial, through agreeing, on a case-by-case basis, the payment of monthly rents or deferring rental payments. The Company will continue to carefully monitor any future impacts that COVID-19 might have on our stakeholders and is committed to acting responsibly at all times.

In recent weeks, we have witnessed scenes of unimaginable suffering in Ukraine. Western European nations, including Germany, are already preparing for what is likely to be the largest movement of refugees since the end of the Second World War. In recognition of this, I am pleased to announce that our Board has taken the decision to make available to Ukrainian refugees a number of fully furnished apartments from the PSD portfolio for a rent-free period.

Improving our tenanted accommodation

The Company takes its responsibilities to its tenants extremely seriously and, where viable, invests heavily in improvements to its properties. Following the removal of the Mietendeckel, which specified rent levels well below free market levels, the Company has been able to resume its historically high level of investment into the Portfolio. During 2021, the Company invested over 36 per cent of its gross revenue on improvement programmes, and it is anticipated that this high level of investment will continue during the year ahead.

Governance and compliance

The Board recognises the importance of a strong corporate governance culture and maintains the principles of good corporate governance, as set out in the Association of Investment Companies Code of Corporate Governance ("AIC Code"). Further details of how the Company has applied the provisions of, and complied with, the AIC Code can be found in the Directors' Report.

During the year, the Company announced that Monique O'Keefe has notified the Board of her intention to step down as Senior Independent Director in order to take up a senior executive position at another company. Monique has made an exceptional contribution in her five years as a Director and the PSD Board would like to wish her every success in her new role.

As previously announced, Isabel Robins joined the Board of PSD as a non-executive Director with effect from 14 March 2022.  Mrs Robins has over 23 years' experience of complex offshore real estate structures, encompassing a broad range of property funds, investments, and developments. Her real estate experience and insight will add a valuable perspective to complement and enhance the skill set of the Board.

Our charitable initiatives

PSD takes a strategic approach to its charitable giving which is guided by our Community Investment Policy and focuses on supporting charities where there is a connection with either 'homelessness' or 'families.' Since February 2019, we have provided support to a women's refuge (The Intercultural Initiative) that helps women affected by domestic violence, providing emergency shelter, advice and counselling to the women and their children. I am pleased to report that, during the first half of 2021, PSD committed to supporting an additional Berlin charity, Laughing Hearts. This charity supports children living in children's homes and social care.

Protecting our environment

The Board believes that taking a sustainable and socially responsible approach to our business delivers long-term success and benefits for all of our stakeholders. We recognise that the nature of our business has environmental and social impacts and that we have a responsibility to consider and minimise these impacts, where possible. As a member of EPRA, we want to contribute to greater transparency in reporting and so, in 2020, we strengthened our commitment to delivering against our environmental and social impacts by introducing EPRA's Sustainability Best Practices Recommendations and capturing our ESG measurements within their framework.

I am therefore delighted to report that this commitment has been recognised in the EPRA Sustainability Awards 2021, with PSD receiving both a Silver and Most Improved award in recognition of the Company's commitment to best practice in its reporting. This recognition further encourages us to continue to approach the future in a consistent, ethical, safe and environmentally friendly way.

Outlook

We are deeply concerned at the tragic humanitarian situation in Ukraine and our thoughts remain with all those affected at this time. Although PSD has no direct exposure, we are prepared for the possible secondary effects in the form of higher energy prices, inflationary pressures and the impact this may have on the outlook for economic growth. At all times, we will continue to prioritise the wellbeing of our tenants and broader stakeholders.  

The Company is well placed to resume its reversionary rental strategy and the removal of the Mietendeckel has allowed the Company to restore the level of investment into the Portfolio to pre-Mietendeckel levels. The fact that new lettings in Berlin during 2021 were signed at an average premium of 33.8 per cent to passing rents should underpin rental growth in the medium term, irrespective of market rental growth.

Uniquely among its listed peers, over 75 per cent of the Company's Berlin portfolio has already been legally split into condominiums. PSD will continue with its strategy of crystallising condominium reversionary value within the Portfolio through the selective sale of individual units as condominiums at a premium to book value.

Our recently completed loan facility and refinancing provide scope for further potential acquisitions in the event that suitable opportunities can be sourced. Our acquisition criteria remain strict and all potential opportunities will continue to be benchmarked against the alternative of share buy-backs.

Berlin market dynamics remain positive and affordability comparisons with other German cities are still favourable. Moreover, it is expected that Berlin demographic trends, particularly net inward migration, will further strengthen when restrictions associated with COVID-19 are permanently removed. This will provide further support for PSD's reversionary strategy.

REPORT OF THE PROPERTY ADVISOR

The Property Advisor's priority throughout 2021 has been to protect and support the Company's tenants, colleagues and communities throughout the period of disruption caused by the COVID-19 pandemic. Since the removal of the Berlin rent controls ("the Mietendeckel"), but subject to property and tenancy regulations which still apply, the Property Advisor has also been proactively realigning the Company's portfolio and strategy to reflect the fact that rents can once again be set at free market levels.

Federal Court rules against the legality of the Berlin Mietendeckel in April 2021

Regulations introduced by the Berlin Red-Red-Green coalition during 2020 to cap or reduce rents for private non-subsidised rental properties aimed to prevent rents being set at free market levels. This was despite the fact that Germany already had in place, at the Federal level, tenant protections which ranked amongst the strongest in the Western world. 

The Company and its legal advisors had always been firmly of the opinion that the Mietendeckel was unconstitutional, and that State law could not supersede Federal law, and, on 15 April 2021, the German Federal Constitutional Court ruled that the Mietendeckel was unlawful and thus void .

The Mietendeckel presented challenges to the Company's rental business model, which had traditionally relied on re-letting at market rates to justify the considerable investment that significantly improves the standard of accommodation available to our tenants. During the period in which the Mietendeckel was in place, the Company reduced its programme of apartment renovations and modernisations on the basis that this investment could not be recouped in the form of rent uplift on re-letting. 

The Portfolio continues to display significant reversionary potential, as evidenced by the fact that, during the current financial year, new lettings in Berlin were signed at an average premium of 33.8 per cent to passing rents. Reflecting this, and the fact that the Mietendeckel is no longer in place, the Company has been able to resume its extensive capital expenditure programme.

Prior to the Federal Court ruling, all rental agreements had been structured to allow for the back-payment of higher rents now legally due for the period during which the Mietendeckel was in place. Tenants had been advised by the Berlin government and tenant organizations to set aside appropriate reserves for this eventuality.

The Company estimated that the amount of back-dated rent which could be claimed from tenants is approximately €2.1 million. As at 31 December 2021, in excess of 95 per cent of this amount had already been collected. The Company will continue to work constructively with any tenants suffering hardship as it collects the remainder of back-dated rents due.

Financial highlights for the twelve-month period to 31 December 2021

	€ million (unless otherwise stated)	Year to	Year to
		31-Dec-21	31-Dec-20
Gross rental income		25.8	23.9
Investment property fair value gain		38.0	41.5
Profit before tax (PBT)		45.3	37.9
Reported EPS (€)		0.39	0.31
Investment property value		801.5	768.3
Net debt (Nominal balances)1		278.0	254.4
Net LTV (%)		34.7	33.1
IFRS NAV per share (€)		4.74	4.48
IFRS NAV per share (£)2		3.98	4.04
EPRA NTA per share (€)3		5.65	5.28
EPRA NTA per share (£)2		4.74	4.76
Dividend per share (€cents)		7.5	7.5
Dividend per share (£ pence)		6.27	6.59
€ EPRA NTA per share total return for period (%)		8.4	8.8
£ EPRA NTA per share total return for period (%)2		1.0	16.0

^{1 - Nominal loan balances as per note 22 rather than the loan 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 1:1.191 (2020: GBP/EUR 1:1.11 )}

^{3 - Further EPRA Net Asset Measures can be found in note 30.}

Financial results 

Revenue for the financial year to 31 December 2021 was €25.8 million (31 December 2020: €23.9 million). Profit before taxation was €45.3 million (31 December 2020: €37.9 million) which was positively affected by a revaluation gain of €38.0 million (31 December 2020: €41.5 million).

The year-on-year rise in profit before tax is driven by a gain on the interest swaps during the year, offset by a smaller gain on disposal of condominiums and a charge to the performance fee due to the Property Advisor, whereas the prior year fee was a credit.

Property expenses fell over the year, reflecting increased service charge recoveries on the acquisition in Brandenburg which were not present in the prior year. Administration costs and legal and professional fees remained flat over the year. Reported earnings per share for the period were 0.39 cents (31 December 2020: 0.31 cents). 

Reported EPRA NTA per share rose by 7.0 per cent in the period to €5.65 (£4.74) (31 December 2020: €5.28 (£4.76)). After accounting for dividends paid during 2021 of 7.5 cents (6.43 pence), which were paid in May and October 2021, the Euro EPRA NTA total return for the period was 8.4 per cent (2020: 8.8 per cent). The sterling EPRA NAV per share total return was 1.0 per cent (31 December 2020: 16.0 per cent), reflecting the strengthening of sterling versus the Euro during the financial year.

Dividend

The Board is pleased to declare an unchanged final dividend of EUR 5.15 cents per share (GBP 4.29 pence per share) (31 December 2020: EUR 5.15 cents, GBP 4.45 pence). The dividend is expected to be paid on or around 9 June 2022 to shareholders on the register at close of business on 13 May 2022, with an ex-dividend date of 12 May 2022. Taking into account the interim dividend paid in October 2021, the total dividend for the financial year to 31 December 2021 is EUR 7.5 cents per share (GBP 6.27 pence per share) (31 December 2020: EUR 7.5 cents, GBP 6.59 pence).

Since listing on the London Stock Exchange in June 2015 to 31 December 2021, including the announced dividend for 2021 and bought-back shares held in treasury, €85.4 million has been returned to shareholders. The dividend is paid from operating cash flows, including the disposal proceeds from condominium projects, and the Company will seek to continue to provide its shareholders with a secure dividend over the medium term, subject to the distribution requirements for Non-Mainstream Pooled Investments, and after full consideration of any ongoing impact associated with COVID-19 and the geopolitical and economic impact of the war in Ukraine.

Share buybacks at a discount to EPRA NTA

During the financial year ended 31 December 2021, the Company bought back a further 4,514,788 ordinary shares, representing 4.5 per cent of the ordinary share capital, for a total consideration of £17.7 million. The average price paid represents a 17.8 per cent discount to EPRA NTA per share as at 31 December 2020.

The capital made available for the buyback programme has been funded through a combination of existing cash balances, refinancing and condominium sale proceeds. This allocation has been achieved without compromising the organic growth prospects of the company, which are based on reversionary re-letting, the preparation and sale of new condominiums and the construction of new attic living space.

Table: Portfolio valuation and breakdown

	31 December 2021	31 December 2020
Total sqm ('000)	189.7	193.2
Valuation (€m)	801.5	768.3
Like-for-like valuation growth (%)	6.3	6.3
Value per sqm (€)	4,225	3,977
Fully occupied gross yield (%)	2.8	2.4
Number of buildings	97	98
Residential units	2,569	2,618
Commercial units	138	139
Total units	2,707	2,757

Like-for-like increase in Portfolio Valuation of 6.3 per cent

The Berlin residential property market has remained resilient during the financial year, with transaction volumes and investment demand observed by Jones Lang LaSalle GmbH ("JLL"), the Company's external valuers, recovering significantly following a stabilising political backdrop, namely the removal of the Mietendeckel and the completion of the German Federal Elections.

JLL has conducted a full RICS Red Book property-by-property analysis, tied back to comparable transactions in the Berlin market, and have provided a portfolio valuation on this basis.

As at 31 December 2021, the total Portfolio was valued at €801.5 million by JLL, an increase of 4.3% over the twelve-month period (31 December 2020: €768.3 million).

On a like-for-like basis, after adjusting for the impact of acquisitions net of disposals, the Portfolio valuation increased by 6.3 per cent in the year to 31 December 2021, and by 3.7 per cent in the second half of the financial year. This increase reflects the combined impact of increased market rents, improvement in the micro locations of certain assets, and the further progress of splitting certain assets at the land registry.

The valuation as at 31 December 2021 represents an average value per square metre of €4,225 (31 December 2020: €3,977) and a gross fully occupied yield of 2.8 per cent (31 December 2020: 2.4 per cent). Included within the Portfolio are eight properties valued as condominiums with an aggregate value of €38.8 million (31 December 2020: nine properties; €52.4 million).

Table:  Rental income and vacancy rate

	31 Dec 2021	31 Dec 2020
Total sqm ('000)	189.7	193.2
Annualised Rental Income (€m)	20.3	20.3
Gross in place rent per sqm (€)	9.6	9.3
Like-for-like rent per sqm growth (%)	3.9	4.1
Vacancy %	8.4	6.8
EPRA Vacancy %	3.1	2.1

Like-for-like rental income per square metre growth of 3.9 per cent

After considering the impact of acquisitions and disposals, like-for-like rental income per square metre grew 3.9 per cent compared with 31 December 2020. Like-for-like rental income grew 1.3 per cent over the same period.

Gross in-place rent was €9.6 per sqm as at 31 December 2021, an increase of 3.7 per cent compared with 31 December 2020.

Limited impact from COVID-19 on rent collection

The impact of COVID-19 on rent collection continues to be limited, with over 97 per cent of all residential and commercial rents collected in 2021, in line with rent collections in 2020 . Rent collection during the months of January and February 2022 has also remained stable.

The Company continues to monitor carefully further developments concerning the COVID-19 pandemic and will continue to work with tenants in arrears because of COVID-19 by agreeing workable repayment schedules.

EPRA vacancy remains low

Reported vacancy at 31 December 2021 was 8.4 per cent (31 December 2020: 6.8 per cent). On an EPRA basis, which adjusts for units undergoing development, the vacancy rate was 3.1 per cent (31 December 2020: 2.1 per cent).

The rise in EPRA vacancy versus the half year stage (30 June 2021: 1.3 per cent) reflects a significant increase in capital expenditure during the second half of the year following the removal of the Mietendeckel which, in turn, has resulted in a higher number of newly modernised apartments returning to market for re-let.

Table: EPRA Net Initial Yield (NIY) and "Topped up" Net Initial Yield (NIY)

^{All figures in €million unless otherwise stated}

	2021	2020
Investment property	801.5	768.3
Reduction for NCI share and property under development	(12.8)	(11.3)
Completed property portfolio	788.7	757.0
Estimated purchasers' costs	65.1	62.7
Gross up completed property portfolio valuation	853.8	819.7
Annualised cash passing collected rental income	20.3	16.4
Property outgoings	(3.4)	(2.8)
Annualised collected net rents	16.8	13.6
Expected increase from Mietendeckel rent cap expiry 1	-	3.2
"Topped up" Annualised net rents	16.8	16.8
EPRA NIY (%)	2.0	1.7
EPRA "Topped Up" NIY (%)	2.0	2.1

^{1 - Under EPRA guidelines, legally allowed lease incentives and contracted step rents are included in the "Topped up" yield calculation, since the Mietendeckel was declared unconstitutional in April 2021, the difference between annualised contracted rents and annualised collected rents for 2020 has been included in this line.}

Berlin reversionary re-letting premium of 33.8 per cent

During the year to 31 December 2021, 240 new leases were signed, representing a letting rate of approximately 10.2 per cent of occupied units. The average rent achieved on all new lettings was €12.2 per sqm, a 4.4 per cent increase on the prior year, and an average premium of 26.8 per cent to passing rents.  This compares to a 25.2 per cent premium in the period to 31 December 2020.

The reversionary premium is negatively impacted by the inclusion of re-lettings from the acquisition in Brandenburg in 2021, where rents are lower than those achieved in central Berlin. Looking solely at the Berlin portfolio, which represents 91.4 per cent of total lettable space, the reversionary premium achieved was 33.8 per cent, in line with the prior year (year to 31 December 2020: 33.9 per cent).  

Portfolio investment

During the year to 31 December 2021, a total of €9.5 million was invested across the Portfolio (31 December 2020: €4.2 million). These items are recorded as capital expenditure in the financial statements. A further €1.7 million (31 December 2020: €1.6 million) was spent on maintaining the assets and is expensed through profit or loss. The year-on-year increase in investment reflects the intensification in renovation activity resulting from the repeal of the Mietendeckel in April 2021, alongside increased renovation expenditure on the asset in Brandenburg and further work on bringing assets in a position to be sold as condominiums .

Table: EPRA Capital Expenditure

^{All figures in €,000 unless otherwise stated}

	31 December 2021	31 December 2020
Acquisitions	0	0
Like-for-like portfolio	4,674	3,645
Development	4,406	274
Other	397	252
Total Capital Expenditure	9,477	4,171

Acquisition of portfolio of properties under construction for €18.5 million  

On 21 March 2022, the Company announced that it has exchanged contracts to acquire a portfolio of 17 new-build, semi-detached, residential properties (34 houses) for a purchase price of €18.5 million. This new-build has been forward-funded with construction expected to complete in the second half of 2024.  It marks an important milestone for the Company, representing the first acquisition completed post the withdrawal of the Mietendeckel. 

The price paid of €4,323 per sqm represents an estimated prospective gross yield of 3.5 per cent and the projected fully occupied rental income generated by the property is €652,670 per annum, representing 3.2 per cent of the Portfolio gross in-place rent as at 31 December 2021. 

The acquisition will be financed using the new loan facility recently agreed with Natixis, announced in January 2022.

The Company will continue to review future potential acquisition opportunities. These will be pursued only in instances where they meet the Company's strict investment return criteria and compare favourably against the alternative of share buy-backs.  

Record condominium notarisations at an 18.3 per cent premium to book value

PSD's condominium strategy involves the division and resale of selected apartment blocks as private units. This is subject to regulatory approval and involves the legal splitting of the freeholds in properties that have been identified as being suitable for condominium conversion.  

Condominium price growth across all major German cities has remained robust during 2021, having been largely unaffected by COVID-19. Industry data shows that average prices in Berlin increased by approximately 10 per cent versus the same period in 2020.

In total, the Company notarised for sale condominiums with an aggregate value of €15.2 million during the year to 31 December 2021, a record high and a 4.1 per cent increase compared with the prior year. A total of 37 residential and commercial condominium units were notarised (31 December 2020: 41 units) with an average achieved notarised value per sqm of €4,988, representing a 18.3 per cent premium to 31 December 2020 assessed book value of each property. Residential condominiums were notarised at a 21.7 per cent premium to 31 December 2020 book value.

Condominium sales for the second half of the financial year were particularly strong, with 24 condominium units being notarised for an aggregate value of €10.9 million. These sales represent a significant increase compared with the first half of the financial year, during which 13 residential units were notarised for sale, with an aggregate value of €4.3 million.

As at 31 December 2021, over 75 per cent of the Berlin portfolio had been legally split into condominiums, providing opportunities for the implementation of further condominium sales projects where appropriate. A further 10 per cent are in application, over half of which are in the final stages of the process.

The Company notes that new Federal Government legislation is likely to limit the ability of landlords to split their properties into condominiums in the future. Although this legislation is not retrospective and does not impact assets that have already been split into condominiums, it does have the potential to impact applications which are currently in process. These measures will inevitably increase the scarcity of condominiums available for sale in the future, further exacerbating the supply-demand imbalance which currently exists. The Company, therefore, believes the valuation impact on the Portfolio is likely to be positive given the high proportion of properties that have already legally split into condominiums. 

Condominium construction

Prior to the removal of the Mietendeckel, the Property Advisor had completed an exercise to examine the financial viability of the creation of new condominium units within the footprint of the existing Portfolio.  

After the overturning of the Mietendeckel, a condominium construction project commenced in an existing asset bought in 2007. The project involves building out the attic and renovating existing commercial units to create seven new residential units. Construction on this project started in the second half of 2021, and the first units are projected to be available for sale or rental in the second half of 2022. The total construction budget for this project is €3.9 million.

The Company also has building permits to renovate attics in 19 existing assets to create a further 45 units for sale as condominiums or as rental stock.

Debt and gearing

As at 31 December 2021, PSD had nominal borrowings of €288.4 million (31 December 2020: €291.4 million) and cash balances of €10.4 million (31 December 2020: €37.0 million), resulting in net debt of €278.0 million (31 December 2020: €254.4 million) and a net loan to value on the Portfolio of 34.7 per cent (31 December 2020: 33.1 per cent).

On 29 December 2021, the Company signed a new €60 million facility with its lending partner, Natixis Pfandbriefbank AG, which comprises of two components: a €45 million Acquisition Facility (the "Acquisition Facility") and a €15 million Capital Expenditure Facility (the "Capex Facility"). 

The new facility matures alongside the existing Natixis facility, in September 2026, and carries an interest rate of 1.15 per cent over 3-month Euribor. It can be used to finance up to 100 per cent of the total cost of both acquisitions and capital expenditure. When drawn, it is non-amortising and terms to protect against future adverse interest rate movements have been agreed. As at 31 December 2021, €0.9 million of this facility had been drawn.

The Acquisition Facility provides the Company with additional flexibility to pursue potential future acquisitions if suitable opportunities, which offer clear value for shareholders, arise. 

The Capex Facility will allow the Company to continue to undertake its extensive capital expenditure programme. The Company remains committed to improving living standards for its tenants and fulfilling its environmental obligations and, following the overturning of the Mietendeckel, has been able to resume its comprehensive programme of vacant apartment renovations and modernisations. 

In January 2022 the Company signed contracts to refinance existing debt provided by Berliner Sparkasse. The refinancing leverages the increase in valuation of certain underlying assets within the Portfolio, releasing a further €14.9 million of equity. Following completion, the total value of the loans that have been refinanced is €49.7 million and the maturities remain unchanged at between five and six years.

The interest rate payable on these loans is lower than the current portfolio average and no additional hedging instruments for adverse interest rate movements are required. The debt is being drawn down in three instalments, of which €9.9 million was drawn in February 2022, and the remainder is expected to be drawn in the first half of the year.

The equity released by the refinancing can be reinvested into the Portfolio, including future potential share buy-backs. 

The decrease in gross debt in the period partly results from the repayments of debt on sale of condominiums alongside amortisation of the debt held with Berliner Sparkasse, offset slightly by the drawdown of the debt from the newly signed facility with Natixis.

Nearly all PSD's debt effectively has a fixed interest rate through hedging. As at 31 December 2021, the blended interest rate of PSD's loan book was 2.0 per cent (31 December 2020: 2.0 per cent). The average remaining duration of the loan book at 31 December 2021 had decreased to 4.9 years (31 December 2020: 6.0 years)

^{1 Section uses nominal loan balances as per note 16 rather than the loan balances on the Consolidated Statement of Financial Position which take account of Capitalised Finance Arrangement Fees in the balance.}

EPRA Best Practice Reporting Metrics

In October 2019, the European Public Real Estate Association (EPRA) published new best practice recommendations (BPR) for financial disclosures by public real estate companies. PSD supports this reporting standardisation approach designed to improve the quality and comparability of information for investors.

The following table sets out PSD's EPRA KPIs from the released BPR, and references where more detailed calculations supporting the KPIs can be found in the report.

Table: EPRA Metrics

Metric	Balance	Note reference
EPRA Earnings (€m)	(0.8)	29
EPRA Net Tangible Assets / share (NTA) (€)	5.65	30
EPRA Net Reinvestment Value / share (NRV) (€)	6.35	30
EPRA Net Disposal Value / share (NRV) (€)	4.77	30
EPRA Capital Expenditure (€m)	9.5	N/A
EPRA Net Initial Yield (%)	2.0	N/A
EPRA "Topped up" Yield (%)	2.0	N/A
EPRA Vacancy (%)	3.1	N/A
EPRA Like-for-Like rental income (%)	3.9	N/A

Statement on Ukraine and Russia

We are deeply concerned and profoundly saddened at the tragic humanitarian toll caused by the deplorable Russian military invasion of Ukraine. Whilst PSD's business is not directly affected, it is possible that there will be second derivative consequences on the global economy following the unprecedented package of sanctions imposed by the West. These include the possible effects of higher energy prices, the risk of supply shortages in basic materials, the possible knock-on impact of inflation leading to higher interest rates, changes to consumer behaviour and demographic changes as Western European countries seek to accommodate the growing Ukrainian refugee crisis.  These circumstances have created a degree of uncertainty across global equity markets from which PSD is not immune. We will, of course, take into account all the relevant implications of this crisis into our forward planning as events unfold.

Unsurprisingly, given the extraordinary fiscal stimulus response to the pandemic, global inflationary pressures have built up, a trend which is likely to be exacerbated in the light of supply-side constraints caused by the Ukrainian crisis.  Germany has been no exception, with inflation reaching 5.3 per cent by end 2021. However, the risk of a major fiscal tightening, as happened in the aftermath of the 2008−09 financial crisis, is low and financing conditions are likely to stay relatively benign. After such a deep recession, central banks are expected to proceed with caution as they withdraw pandemic support. Notwithstanding this, equity markets have reacted cautiously to the prospect of rising rates, attaching a significant risk premium to valuations of listed residential real estate companies, all of which are currently valued at a discount to their Net Asst Value. This phenomenon is not new and is cyclical in nature.

Update on German political backdrop and continued housing shortage

There have been a number of supportive political developments including the Mietendeckel being declared void and the new Federal government consisting of the SPD, Greens and FDP which holds out the prospect of a more stable framework for the foreseeable future.

Although the general direction of new government policy initiatives will continue to be towards tightening tenant protections, particularly in areas with overstretched housing markets, there now appears to be broad political recognition that blunt policy instruments, such as the Mietendeckel, are not the best way to address housing market imbalances. Sensibly, the new government appears to be shifting its focus towards increasing the supply of housing and, with a target of 400,000 new homes per year, the new coalition is ahead of the previous government´s goals.

Whilst we consider increasing the supply of housing to be the correct policy response, it will take many years to address the chronic shortage of affordable German housing, particularly in Berlin, where there are currently 174 applicants per rental flat and with last year's building permits accounting for less than one per cent of Berlin housing stock. In the event that net inward migration, which had ceased during the pandemic, begins to feature again, the shortage of available housing stock could be exacerbated still further.  

A major reason for low supply is the persistent large discount of the cost of existing housing stock to replacement cost.  In Berlin, where prices have increased the most (from a significantly lower level than other German cities), the discount to replacement cost remains. Given significant increases in material costs, labour shortages and the additional cost of new green initiatives that the construction industry will seek to pass on to end-buyers, the relative attractiveness to investors of existing stock versus new-build is expected to endure.

Tenant location decisions within Berlin's private rental market have also shown some signs of change in the wake of COVID-19. Scarcity of supply of affordable rental property, coupled with a growing realisation that working remotely is a viable alternative to a daily city centre commute, have begun to impact tenant settlement choices.  Less densely populated areas in the greener suburban areas of Berlin, where supply is less constrained, with more affordable rents and strong commuter links, now hold increasing appeal for tenants seeking to relocate, particularly in areas where new employers are expanding or relocating.  This trend has been particularly evident in certain micro locations such as Erkner, where the Company recently announced its first acquisition since 2019.

A lack of available central Berlin rental properties, coupled with favourable mortgage versus market rent dynamics, has also provided a favourable tailwind for condominium pricing. 2021 saw double digit increases in condominium prices, a trend that was evident in PSD's own portfolio, and further price inflation is anticipated in the year ahead. Recent federal policy initiatives have further empowered state governments to restrict condominium splitting in the future and it is anticipated that the Berlin authorities will take advantage of these new powers. This will serve to compound further the supply-demand imbalance. With over three quarters of PSD's portfolio already legally split into condominiums, it is expected that the valuation impact on the Portfolio will be positive.

Focus on sustainability

An increasingly important theme during recent years has been the focus on providing more sustainable, socially and environmentally friendly accommodation. The Europe-wide drive towards climate neutrality by 2050 has ensured that ESG considerations are now a core part of investment decision making among real estate investors and landlords alike. This trend will continue to gather pace in the years ahead.

Whilst an increasing number of landlords and investors are bolstering their environmental credentials, the full scope of prescribed ESG criteria is not yet fully known. Currently, the direction of travel appears to be driving investment strategy towards new build as opposed to the refurbishment of existing properties on the basis that the reduction of emissions is focused on the operational (as opposed to building) phase. However, the refurbishment and modernisation of existing buildings, which is a central pillar of PSD's strategy, is widely regarded as more sustainable than the alternative of new build.  This is because the CO2 emissions produced during demolition, construction and the production of building materials (embedded carbon) represents over three quarters of all emissions across the entire life cycle of a new build completed to modern efficiency standards. In addition, embedded carbon is released almost entirely during the demolition and construction phases, with an immediate impact on the environment. This contrasts with long-term existing stock where the same emissions would have already been depreciated.  

A more considered approach is required, one which fully recognises the role of embedded carbon as the largest source of emissions throughout the life cycle of a building. Should the road ahead include the introduction of a comprehensive CO2 tax inclusive of embedded carbon generated during the construction phase, refurbishments of existing property would become relatively more attractive versus the alternative of new construction, which would have to absorb a proportionately higher proportion of emission costs. Currently, it is uncertain as to whether future policy initiatives will shift in this direction although it is encouraging that the new German federal coalition government has already declared its intention to look more closely at the use, impact and measurement of embedded carbon.

What is clear is that the potential consequences of ESG regulation on the investment markets will be an enduring theme for years to come. PSD recognises this and will continue to monitor and report on its ESG activities. For the financial year ended 2021, the Company intends to report on its ESG emissions and strategy in a separate report, compliant with EPRA ESG reporting standards.

Outlook

Finally, looking specifically at PSD, the Property Advisor looks to the year ahead with optimism. Following the removal of the Mietendeckel, the Company is well placed to resume its reversionary rental strategy. This will support future rental growth across the Portfolio irrespective of market rental growth.

The Company believes it can continue to provide capital growth and income to its investors through a disciplined approach to reinvestment into the existing portfolio, condominium sales at a premium to NAV, share buybacks at a discount to NAV and acquisitions if, and only if, they screen favourably versus alternative uses of capital.

PRINCIPAL RISKS AND UNCERTAINTIES

The Board recognises that effective risk evaluation and management needs to be foremost in the strategic planning and the decision-making process. In conjunction with the Property Advisor, key risks and risk mitigation measures are reviewed by the Board on a regular basis and discussed formally during Board meetings.  

RISK	IMPACT	MITIGATION	MOVEMENT
Conflict in Ukraine	The current Russian invasion of Ukraine does not yet appear to have any direct impact on PSD; however, the secondary effects of the conflict may have significant adverse effects. The conflict may raise the risk to the Company in the following areas. Cyber risk - The Russian state has been linked to cyber-attacks on Government and international infrastructure and the risk of an increase in these attacks is highly likely now that the Russian state is subject to sanctions from countries in Western Europe and the USA. Financial risk - The likely deterioration in the macro-economic environment may lead to a more "wait-and-see" attitude from investors and financial institutions which may lead to an inability for the Company to refinance its debt. The rise in inflation may also lead to an increase in interest rates, causing the cost of refinancing its debt to rise. Market Risk - The conflict is likely to affect investor sentiment across Europe, convincing financial institutions and other companies to operate a "wait-and-see" approach to their cash reserves rather than investing them, potentially affecting economic growth prospects. Furthermore, as with supply chain risk below, the sanctions imposed on the Russian Government are likely to push up prices of energy raw materials as they become more difficult to obtain. The increase in prices of raw materials is likely to lead to increased inflation across Europe. Supply chain risk - The German Government and German Companies have procured significant amounts of fuel and raw materials from Russia over the previous years. With the advent of significant sanctions on the Russian Government, the availability of these is likely to be significantly reduced, potentially harming the Company's ability to source raw materials to aid its refurbishment and construction programmes. Vulnerable tenants - The economic dislocation caused by the Ukraine conflict is likely to cause an increase in the number of vulnerable tenants in Company units as rising inflation and unemployment could lead to tenants being unable to meet their rent payments as they fall due. An increase in the number of vulnerable tenants may increase the scrutiny on the Company should these tenants not be treated in a fair manner.	Cyber Risk - The mitigation of this risk is addressed in the Cyber risk section below. Financial risk - The mitigation of this risk is addressed in the financial risk section below. Market risk - The mitigation of this risk is addressed in the market risk section below. Supply chain risk - The Company has operated in the German market since 2007 and has developed a diversified supply chain across Germany in both Berlin and the cities in which it used to operate; the Company would be able to source raw materials from these suppliers should they be required. Vulnerable tenants - The Company has a policy of engaging directly with vulnerable tenants through its Vulnerable Tenant Policy which sets out procedures to follow to assist tenants who may require additional protection.	New - Increasing
Tenant / Letting and Political risk	Property laws remain under constant review by both the "Red-Red-Green" coalition government in Berlin and the recently elected "Traffic Light Coalition" Federal Government.    The new Federal Government has issued its coalition intentions paper " Koalitionsvereinbar-ung" and, while no policies have been brought into law yet, the intentions paper indicates that the new government is looking at nationwide rent moratoriums, caps on permitted rent increases and tightening of rental brakes.	The Property Advisor regularly monitors the impact that existing and proposed laws or regulations could have on future rental values and property planning applications. The Property Advisor considers that the Company has a flexible business model, which should enable it to adapt to any new rent regulations proposed by the Federal Government. Furthermore, to a significant extent, the proposals of the new Federal Government are similar to rules already in place in the State of Berlin and, therefore, there is not expected to be a significant impact on the Company's operations from these proposed regulations.	Unchanged
Market risk	Economic, political, fiscal and legal issues can have a negative effect on property valuations. A decline in Group property valuations could negatively impact the ability of the Group to sell properties within the Portfolio at valuations which satisfy the Group's investment objective. The rapidly developing situation in Ukraine has the possibility to impact negatively gas, energy and raw material supplies to Germany and the rest of Europe. This could lead to rises in overall costs both for the Company and its tenants. COVID-19 remains prevalent in Germany and potential restrictions to work and assembly have the possibility of negatively impacting the Company's operations and tenants' ability to pay rents as they fall due. The Federal Government is currently considering introducing new laws which would allow States to block the partitioning of apartment blocks into condominiums. The Berlin Government has recently adopted similar proposals.	Although the Board and Property Advisor cannot control external macro-economic risks, economic indicators are constantly monitored by both the Board and Property Advisor and Company strategy is tailored accordingly. The Board and the Property Advisor are continuing to monitor the deteriorating situation in Ukraine. While it is not clear as yet what effect the announced sanctions from the German and other European governments on the Russian Government are likely to have on the Company's finances and operations, the Company has been able to operate in unfavourable economic environments before, including the COVID-19 pandemic and the Mietendeckel. The effects of COVID-19 on the Company's operations and finances have been limited, with strong rent collection during 2021. Its outsourced service providers have also managed to continue operating with limited disruption. The blocking of the ability for landlords to split assets at the land registry would likely be a net positive for the Company since the supply of condominiums would be materially reduced, increasing the value of the stock of over 1,700 units already split owned by the Company.	Increasing
Financial risk	A fall in revenues could result in the Group breaching financial covenants of a lender, and also lead to the inability to repay any debt and related borrowing costs. A fall in revenue or asset values could also lead to the Company being unable to maintain dividend payments to investors. The current situation in Ukraine may lead to financial institutions operating a "wait-and-see approach" to lending and investing, which may lead to an inability for the Company to refinance its Portfolio in the future. The potential for interest rate rises in response to rising inflation could also lead to increasing interest costs for the Company.	The Group took on new covenants when signing its facility with Natixis: Interest coverage ratio (ICR), debt yield and loan-to-value covenants. Only the debt yield and ICR covenants are "hard" covenants, resulting in an event of default in case of breach. The loan-to-value covenant is a "cash trap" covenant alone (the requirement to hold all related rental income in Natixis accounts until sufficient debt is repaid to return to with the covenant level), with no event of default. The Company carried out extensive sensitivity analysis prior to signing the facility and, even in the most stressed rent scenarios, no covenants were breached. The Property Advisor continues to model expected revenues and covenant levels, and these are reported to the Board as part of its Viability Assessment which can be seen in the annual report. If rent levels or property values were to fall to a point where the covenants were in danger of being affected, the Company expects to use its surplus cashflow and cash reserves to pay down debt balances to rectify the situation. At the most recent covenant test date, in January 2022, all covenants were cleared. The Company also continues to monitor its balance sheet and to review potential refinancing opportunities as part of its day-to-day operations. However, opportunities in these areas may become limited due to current uncertain macro-economic environment stemming from the economic dislocation caused by Russian military action in Ukraine. The Property Advisor will look to accelerate or delay, as appropriate, potential refinancing opportunities in response to the changing macro-economic environment.	Increasing
IT and Cyber Security risk	The Company is dependent on network and information systems of various service providers - mainly the Property Advisor, Property Manager and Administrator, and is therefore exposed to the risk of cyber-crimes and loss of data. As cyber-crime remains prevalent across Europe, this is considered a significant risk by the Group. A breach could lead to the illegal access of commercially sensitive information and the potential to impact investor, supplier and tenant confidentiality and to disrupt the business of the Company. The Russian state has been linked to cyber-attacks on Government and international infrastructure and the risk of an increase in these attacks is highly likely now that the Russian state is subject to sanctions from countries in Western Europe and the USA.	There is a constant review of IT systems and infrastructure in place for the Company to ensure these are as robust as possible. Service providers are required to report to the Board on request, and at least annually, on their financial controls and procedures. A detailed review has been undertaken during the year of the cyber security of the Company and its outsourced processes. From this review, the Company has required all its key service providers to report to the Company their procedures and protocols around cyber security on an annual basis. Additionally, the Company has requested that all service providers carry out cyber penetration testing and report back to the Board with any significant observations. Service providers are also required to hold detailed risk and controls registers regarding their IT systems. The Property Advisor and the Board reviews service organisations' IT reports as part of Board meetings each year. The Board believes that, while the risk of cyber-attacks has increased due to the sanctions imposed on the Russian Government, the risk to its service providers directly remains relatively low. The secondary risk from cyber-attacks on digital infrastructure, such as payment systems, remains high and the Board, and the Property Advisor, will continue to monitor the situation.	Increasing
Lack of Investment opportunity	Availability of potential investments which meet the Company's investment objective can be negatively affected by supply and demand dynamics within the market for German residential property and the state of the German economy and financial markets more generally.	The Property Advisor has been active in the German residential property market since 2006. It has specialised acquisition personnel and an extensive network of industry contacts, including property agents, industry consultants and the principals of other investment funds. It is expected that future acquisitions will be sourced from these channels. Since the overturning of the Mietendeckel in April 2021, regulation has focussed more on slowing down the market by extension of Milieuschutz areas and the prohibition of splitting assets at the land registry. The Property Advisor believes that this attempt to slow down the market will create other opportunities, including densification projects within the current Portfolio and acquiring in the suburbs of Berlin, outside the scope of these regulations, where the growth potential is more promising. An example of this being the recently signed forward funding acquisition in Erkner, which is detailed in this report.	Decreasing
Outsourcing risk	The Group's future performance depends on the success of its outsourced third-party suppliers, particularly the Property Advisor, QSix, but also its outsourced property management, IFRS (International Financial Reporting Standards) and German GAAP accountants and its administrative functions. The departure of one or more key third-party providers may have an adverse effect on the performance of the Group.	Since the Company listed on the London Stock Exchange, the Property Advisor has expanded headcount through the recruitment of several additional experienced London and Berlin-based personnel. Additionally, senior Property Advisor personnel and their families retain a stake in the Group, aligning their interests with other key stakeholders. The key third parties responsible for property management, accounting and administration are continually monitored by the Property Advisor and must provide responses annually to a Board assessment questionnaire regarding their internal controls and performance. These questionnaires are reviewed annually by the Board.	Unchanged

Going concern

The Directors have reviewed projections for the period up to 31 March 2023, 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. After making enquiries and having regard to the FRC's Guidance for Companies on COVID-19 issued on 4 December 2020, 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. 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 in this document. 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 28 February 2025:

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

b) seasonal fluctuations in working capital requirements;

c) property vacancy rates;

d) rent arrears and bad debts;

e) capital and administration expenditure (excluding potential acquisitions as set out below) during the period;

f) condominium sales proceeds;

g) expected debt releases;

h) the potential impact of COVID-19;

i) the potential impact of the war in Ukraine;

j) asset construction development costs.

Under normal scenarios, this base case model assumes stresses to each of a) through to g) in the above list. However, this year the Group has additionally considered points h, i and j.

The effect of COVID-19 and its associated restrictions, as they relate to the Company, were assessed by the Board as part of this viability statement. The Board considers that it is not necessary to model any adverse assumptions with respect to the impact of further COVID-19 restrictions as the Company believes it has demonstrated throughout the pandemic that its financial and operational results have remained robust and that it is able to operate effectively in the most difficult of environments. Furthermore, it is increasingly evident that there is little appetite in Germany, and throughout Europe for a return to restrictions to try and stem the spread of COVID-19, and the focus appears to be towards "living with" the virus as it becomes endemic. Therefore, on this basis it is appropriate not to separately model any adverse effects on Viability due to COVID-19.

The rapidly developing situation in Ukraine has the possibility to affect negatively gas and energy supplies to Germany and the rest of Europe. This could, in turn, lead to rises in overall property and corporate costs both for the Company and its tenants. The effect on the Company's business and viability is extremely difficult to determine at this early stage, but the Directors believe that the stress testing set out below would accurately reflect a reasonable "worst case" scenario that may arise as a result of the current position.

Financial modelling and stress testing was carried out on the Group's cashflows taking into account the following assumptions, which the directors believe to reflect the conditions present in a 'worst case' scenario.

· Increased regulation of rent levels of tenancies in the Berlin & Brandenburg markets leads to a fall in rental income of 20 per cent over the forecast period;

· a fall in asset values due to an external market shock leading to an inability to refinance properties over the forecast period;

· projected condominium sales are reduced by 20 per cent as a response to the Berlin and/or Federal authorities attempting to slow down the condominium sales;

· changes in ESG regulations lead to a mandated 20 per cent increase in capital expenditure to reach the required regulatory level. This includes a 20 per cent increase in the costs of the forward funding acquisition in Erkner; and

· a cyber-attack on the Company which leads to a GDPR data breach fine of 4 per cent of annual revenue in 2023.

After applying the assumptions above, individually and collectively, there was no scenario by which the viability of the Company over the next 12 months was brought into doubt from a cashflow perspective. Under the stresses set out above, cashflow mitigation may be required in 2023 and headroom could be obtained in the following ways:

· reducing the dividend to preserve cash;

· cancellation of larger capital expenditure projects; and

· selling individual assets, or condominiums to release cash.

Under these stressed assumptions used to assess viability, the Group is able to manage all 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 further potential property acquisitions in order to draw the full acquisition facility signed with Natixis in December 2021. However, as the facility is a 100 per cent loan to cost then the impact on the cashflows is limited to a rise in the interest paid on the loan balance over the forecast period. Furthermore, the Directors complete a formal review of the working capital headroom of the Group for material acquisitions.

On the basis of the above, 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.

Consolidated Statement of Comprehensive Income
For the year ended 31 December 2021
										Year ended			Year ended
							Notes			31 December 2021		31 December 2020
											€'000		€'000
Continuing operations
Revenue							6				25,790		23,899
Property expenses							7				(16,082)		(16,437)
Gross profit											9,708		7,462
Administrative expenses							8				(3,447)		(3,263)
Gain on disposal of investment property (including investment property held for sale)							10				1,518		2,178
Investment property fair value gain							11				37,983		41,458
Performance fee due to property advisor							26				(343)		439
Operating profit											45,419		48,274
Net finance charge (before gain / (loss) on interest rate swaps)							12				(7,482)		(8,199)
Gain / (loss) on interest rate swaps							12				7,313		(2,218)
Profit before taxation											45,250		37,857
Income tax expense							13				(7,882)		(7,550)
Profit after taxation											37,368		30,307
Other comprehensive income											-		-
Total comprehensive income for the year											37,368		30,307
Total comprehensive income attributable to:
Owners of the parent											37,311		29,788
Non-controlling interests											57		519
											37,368		30,307
Earnings per share attributable to the owners of the parent:
From continuing operations
Basic (€)							29				0.39		0.31
Diluted (€)							29				0.39		0.30
Consolidated Statement of Financial Position
At 31 December 2021
										As at			As at
							Notes			31 December 2021		31 December 2020
											'000		'000
ASSETS
Non-current assets
Investment properties							16				759,830		749,008
Property, plant and equipment							18				20		42
Other financial assets at amortised cost							19				926		901
Deferred tax asset							13				1,722		2,880
											762,498		752,831
Current assets
Investment properties - held for sale							17				41,631		19,302
Trade and other receivables							20				11,699		8,414
Cash and cash equivalents							21				10,441		36,996
											63,771		64,712
Total assets											826,269		817,543
EQUITY AND LIABILITIES
Current liabilities
Borrowings							22				922		1,018
Trade and other payables							23				11,893		9,018
Current tax							13				512		550
											13,327		10,586
Non-current liabilities
Borrowings							22				283,233		286,531
Derivative financial instruments							24				10,884		18,197
Deferred tax liability							13				75,198		68,273
											369,315		373,001
Total liabilities											382,642		383,587
Equity
Stated capital							27				196,578		196,578
Treasury shares							27				(33,275)		(17,206)
Share based payment reserve							26				343		6,369
Retained earnings											276,394		244,685
Equity attributable to owners of the parent											440,040		430,426
Non-controlling interest							28				3,587		3,530
Total equity											443,627		433,956
Total equity and liabilities											826,269		817,543
Date:						Date:
Consolidated Statement of Changes in Equity
For the year ended 31 December 2021
	Attributable to the owners of the parent
	Stated capital		Treasury shares		Share based payment reserve		Retained earnings		Total		Non-controlling interest		Total equity
	€'000		€'000		€'000		€'000		€'000		€'000		€'000
Balance at 1 January 2020	196,578		(11,354)		6,808		221,859		413,891		3,011		416,902
Comprehensive income:
Profit for the year	-		-		-		29,788		29,788		519		30,307
Other comprehensive income	-		-		-		-		-		-		-
Total comprehensive income for the year	-		-		-		29,788		29,788		519		30,307
Transactions with owners -
recognised directly in equity:
Dividends paid	-		-		-		(6,962)		(6,962)		-		(6,962)
Performance fee	-		-		(439)		-		(439)		-		(439)
Acquisition of treasury shares	-		(5,852)		-		-		(5,852)		-		(5,852)
Balance at 31 December 2020	196,578		(17,206)		6,369		244,685		430,426		3,530		433,956
Comprehensive income:
Profit for the year	-		-		-		37,311		37,311		57		37,368
Other comprehensive income	-		-		-		-		-		-		-
Total comprehensive income for the year	-		-		-		37,311		37,311		57		37,368
Transactions with owners -
recognised directly in equity:
Dividends paid	-		-		-		(7,435)		(7,435)		-		(7,435)
Performance fee	-		-		343		-		343		-		343
Settlement of performance fee using treasury shares	-		4,536		(6,369)		1,833		-		-		-
Acquisition of treasury shares	-		(20,605)		-		-		(20,605)		-		(20,605)
Balance at 31 December 2021	196,578		(33,275)		343		276,394		440,040		3,587		443,627
Consolidated Statement of Cash Flows
For the year ended 31 December 2021
										Year ended		Year ended
										31 December 2021		31 December 2020
											€'000		€'000
Profit before taxation											45,250		37,857
Adjustments for:
Net finance charge											169		10,417
Gain on disposal of investment property											(1,518)		(2,178)
Investment property revaluation gain											(37,983)		(41,458)
Depreciation											8		8
Performance fee due to property advisor (share based payment)											343		(439)
Operating cash flows before movements in working capital											6,269		4,207
(Increase) / decrease in receivables											(1,320)		2,071
Increase in payables											2,875		1,782
Cash generated from operating activities											7,824		8,060
Income tax received / (paid)											163		(1,316)
Net cash generated from operating activities											7,987		6,744
Cash flow from investing activities
Proceeds on disposal of investment property (net of disposal costs)											13,758		7,213
Interest received											1		19
Capital expenditure on investment property											(9,477)		(4,171)
Put option settlement											-		(7,542)
Repayment of shareholder loans											-		1,622
Disposals to property, plant and equipment											14		4
Net cash generated from (used in) investing activities											4,296		(2,855)
Cash flow from financing activities
Interest paid on bank loans											(7,743)		(7,541)
Repayment of bank loans											(4,059)		(38,845)
Drawdown on bank loan facilities											900		50,000
Dividends paid											(7,435)		(6,962)
Acquisition of treasury shares											(20,501)		(5,956)
Net cash (used in) financing activities											(38,838)		(9,304)
Net (decrease) in cash and cash equivalents											(26,555)		(5,415)
Cash and cash equivalents at beginning of year											36,996		42,414
Exchange gains on cash and cash equivalents											-		(3)
Cash and cash equivalents at end of year											10,441		36,996
Reconciliation of Net Cash Flow to Movement in Debt
For the year ended 31 December 2021
										Year ended		Year ended
							Notes			31 December 2021		31 December 2020
											€'000		€'000
Cashflow from (decrease) / increase in debt financing											(3,159)		11,155
Non-cash changes from (decrease) / increase in debt financing											(235)		140
Change in net debt resulting from cash flows											(3,394)		11,295
Movement in debt in the year											(3,394)		11,295
Debt at the start of the year											287,549		276,254
Debt at the end of the year							22				284,155		287,549
Notes to the Financial Statements
For the year ended 31 December 2021
1 - General information
The Group consists of a Parent Company, Phoenix Spree Deutschland Limited ('the Company'), incorporated in Jersey, Channel Islands and all its subsidiaries ('the Group') which are incorporated and domiciled in and operate out of Jersey and Germany. Phoenix Spree Deutschland Limited is listed on the premium segment of the Main Market of the London Stock Exchange.
The Group invests in residential and commercial property in Berlin, Germany.
The registered office is at 12 Castle Street, St Helier, Jersey, JE2 3RT, Channel Islands.
2 - Summary of significant accounting policies
The principal accounting policies adopted are set out below.
2.1 Basis of preparation
The consolidated financial statements have been prepared in accordance with applicable law and international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union and UK adopted international accounting standards.
The consolidated financial statements are presented to the nearest €1,000.
In accordance with Section 105 of The Companies (Jersey) Law 1991, the Group confirms that the financial information for the year ended 31 December 2021 is derived from the Group's audited financial statements and that these are not statutory accounts and, as such, do not contain all information required to be disclosed in the financial statements prepared in accordance with International Financial Reporting Standards ("IFRS").
The statutory accounts for the year ended 31 December 2021 have been audited and approved but have not yet been filed.
The Group's audited financial statements for the period ended 31 December 2021 received an unqualified audit opinion and the auditor's report contained no statement under section 113B (3) and (6) of The Companies (Jersey) Law 1991.
The financial information contained within this preliminary statement was approved and authorised for issue by the Board on 29 March 2022.
2.2 Going concern
The Directors have prepared projections for three years to February 2025, which include the going concern assessment period to 31 March 2023. These projections have been prepared using assumptions which the Directors consider to be appropriate to the current financial position of the Group as regards to current expected revenues and its cost base and the Group's investments, borrowing and debt repayment plans and show that the Group should be able to operate within the level of its current resources and expects to comply with all covenants for the foreseeable future. The Group's business activities together with the factors likely to affect its future development and the Group's objectives, policies and processes for managing its capital and its risks are set out in the Strategic Report and in notes 3 and 31. After making enquiries the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Group has considered the current economic environment alongside its principal risks in its going concern assessment. Further information can be found in the viability statement in the annual report. The Group therefore continues to adopt the going concern basis in preparing its consolidated financial statements.
2.3 Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries). The Company controls an entity when the Group is exposed to, or has rights to, variable returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.
Profit or loss and each component of other comprehensive income are attributable to the owners of the Company and to the non-controlling interests. Total comprehensive income of the subsidiaries is attributable to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.
Accounting policies of subsidiaries which differ from Group accounting policies are adjusted on consolidation. All intra-group transactions, balances, income and expenses are eliminated on consolidation.
Non-controlling interests in subsidiaries are identified separately from the Group's equity therein. Those interests of non-controlling shareholders that present ownership interests entitling their holders to a proportionate share of net assets upon liquidation may initially be measured at fair value or at the non-controlling interests' proportionate share of the fair value of the acquiree's identifiable net assets. The choice of measurement is made on an acquisition-by-acquisition basis. Other non-controlling interests are initially measured at fair value. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests' share of subsequent changes in equity.
Changes in the Group's interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions. The carrying amount of the Group's interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to the owners of the Company.
2.4 Revenue recognition
Revenue includes rental income, service charges and other amounts directly recoverable from tenants. Rental income and service charges from operating leases are recognised as income on a straight-line basis over the lease term. When the Group provides incentives to its tenants, the cost of incentives are recognised over the lease term, on a straight-line basis, as a reduction of rental income.
2.5 Foreign currencies
(a) Functional and presentation currency
The currency of the primary economic environment in which the Group operates ('the functional currency') is the Euro (€). The presentational currency of the consolidated financial statements is also the Euro (€).
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. At each reporting date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing at that date. Foreign exchange gains and losses resulting from such transactions are recognised in the consolidated statement of comprehensive income.
Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
2.6 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating-decision maker.  The chief operating-decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors. The Board has identified the operations of the Group as a whole as the only operating segment.
2.7 Operating profit
Operating profit is stated before the Group's gain or loss on its financial assets and after the revaluation gains or losses for the year in respect of investment properties and after gains or losses on the disposal of investment properties.
2.8 Administrative and property expenses
All expenses are accounted for on an accruals basis and are charged to the consolidated statement of comprehensive income in the period in which they are incurred. Service charge costs, to the extent that they are not recoverable from tenants, are accounted for on an accruals basis and included in property expenses.
2.9 Separately disclosed items
Certain items are disclosed separately in the consolidated financial statements where this provides further understanding of the financial performance of the Group, due to their significance in terms of nature or amount.
2.10 Property Advisor fees
The element of Property Advisor fees for management services provided are accounted for on an accruals basis and are charged to the Consolidated Statement of Comprehensive Income. These fees are detailed in note 7 and classified under 'Property advisors' fees and expenses. The settlement of the Property Advisor performance fees is detailed in note 26. Due to the nature of the settlement of the performance fee, any movement in the amount payable at the year-end is reflected within the share-based payment reserve in the consolidated statement of financial position.
2.11 Investment property
Property that is held for long-term rental yields or for capital appreciation, or both, which is not occupied by the Group, is classified as investment property.
Investment property is measured initially at cost, including related transaction costs. After initial recognition, investment property is carried at fair value, based on market value.
The change in fair values is recognised in the consolidated statement of comprehensive income for the year.
A valuation exercise is undertaken by the Group's independent valuer, Jones Lang LaSalle GmbH ('JLL'), at each reporting date in accordance with the methodology described in note 16 on a building-by-building basis. Such estimates are inherently subjective and actual values can only be determined in a sales transaction. The valuations have been prepared by JLL on a consistent basis at each reporting date.
Subsequent expenditure is added to the asset's carrying amount only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Repairs and maintenance costs are charged to the Consolidated Statement of Comprehensive Income during the financial period in which they are incurred. Changes in fair values are recorded in the consolidated statement of comprehensive income for the year.
Purchases and sales of investment properties are recognised on legal completion.
An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising on derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset, where the carrying amount is the higher of cost or fair value) is included in the Consolidated Statement of Comprehensive Income in the period in which the property is derecognised.
2.12 Current assets held for sale - investment property
Current assets (and disposal groups) classified as held for sale are measured at the most recent valuation.
Current assets (and disposal groups) are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale which should be expected to qualify for recognition as a completed sale within one year from the date of classification.
The Group recognises an asset in this category once the Board has committed to the sale of an asset and marketing has commenced.
When the Group is committed to a sale plan involving loss of control of a subsidiary, all of the assets and liabilities of that subsidiary are classified as held for sale when the criteria described above are met, regardless of whether the Group will retain a non-controlling interest in its former subsidiary after the sale.
If an asset held for sale is unsold within one year of being classified as such, it will continue to be classified as held for sale if:
(a) at the date the Company commits itself to a plan to sell a non-current asset (or disposal group) it reasonably expects that others (not a buyer) will impose conditions on the transfer of the asset that will extend the period required to complete the sale, and actions necessary to respond to those conditions cannot be initiated until after a firm purchase commitment is obtained, and a firm purchase commitment is highly probable within one year;
(b) the Company obtains a firm purchase commitment and, as a result, a buyer or others unexpectedly impose conditions on the transfer of a non-current asset (or disposal group) previously classified as held for sale that will extend the period required to complete the sale, and timely actions necessary to respond to the conditions have been taken, and a favourable resolution of the delaying factors is expected;
(c) during the initial one-year period, circumstances arise that were previously considered unlikely and, as a result, a non-current asset previously classified as held for sale is not sold by the end of that period, and during the initial one-year period the Company took action necessary to respond to the change in circumstances, and the non-current asset is being actively marketed at a price that is reasonable, given the change in circumstances, and the criteria above are met;
(d) otherwise it will be transferred back to investment property.
2.13 Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation.
Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use. Depreciation is charged so as to write off the costs of assets to their residual values over their estimated useful lives, on the following basis:
Equipment - 4.50% to 25% per annum, straight line.
The gain or loss arising on the disposal of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the consolidated statement of comprehensive income.
2.14 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in the consolidated statement of comprehensive income in the period in which they are incurred.
2.15 Tenants deposits
Tenants' deposits are held off the consolidated statement of financial position in a separate bank account in accordance with German legal requirements, and the funds are not accessible to the Group. Accordingly, neither an asset nor a liability is recognised.
2.16 Financial instruments
Financial assets and financial liabilities are recognised in the Group's statement of financial position when the Group becomes a party to the contractual provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
Trade and other receivables
Trade receivables are amounts due from tenants for rents and service charges and are initially recognised at the amount of the consideration that is unconditional and subsequently carried at amortised cost as the Group's business model is to collect the contractual cash flows due from tenants. Provision is made based on the expected credit loss model which reflects the Company's historical credit loss experience over the past three years but also reflects the lifetime expected credit loss.
Cash and cash equivalents
Cash and cash equivalents are defined as cash and short term deposits, including any bank overdrafts, with an original maturity of three months or less, measured at amortised cost.
Trade and other payables
Trade payables are recognised and carried at their invoiced value inclusive of any VAT that may be applicable, and subsequently at amortised cost using the effective interest method.
Borrowings
All loans and borrowings are initially measured at fair value less directly attributable transaction costs. After initial recognition, all interest-bearing loans and borrowings are subsequently measured at amortised cost, using the effective interest method.
The interest due within the next twelve months is accrued at the end of the year and presented as a current liability within trade and other payables.
Treasury shares
When shares recognised as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs, is recognised as a deduction from equity at the weighted average cost of treasury shares up to the date of repurchase. Repurchased shares are classified as treasury shares and are presented in the treasury share reserve. When treasury shares are sold or reissued subsequently, the amount received is recognised as an increase in equity and the resulting surplus or deficit on the transaction is presented within retained earnings.
Interest-rate swaps
The Group uses interest-rate swaps to manage its market risk.  The Group does not hold or issue derivatives for trading purposes.
The interest-rate swaps are recognised in the Consolidated Statement of Financial Position at fair value, based on counterparty quotes.  The gain or loss on the swaps is recognised in the Consolidated Statement of Comprehensive Income and detailed in note 12.
2.17 Current and deferred income tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in the Consolidated Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In that case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
(a) Current tax
The current tax charge is based on taxable profit for the year. Taxable profit differs from net profit reported in the Consolidated Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the accounting date.
2.17 Current and deferred income tax (continued)
(b) Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.
Deferred tax is charged or credited in the consolidated statement of comprehensive income except when it relates to items credited or charged directly in equity, in which case the deferred tax is also dealt with in equity.
Deferred tax is calculated at the tax rates and laws that are expected to apply to the period when the asset is realised or the liability is settled based upon tax rates that have been enacted or substantively enacted by the accounting date.
The carrying amount of deferred tax assets is reviewed at each accounting date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
2.18 New standards and interpretations
The following relevant new standards, amendments to standards and interpretations have been issued, and are effective for the financial year beginning on 1 January 2021, as adopted by the European Union and United Kingdom:
Title						As issued by the IASB, mandatory for accounting periods starting on or after
Interest Rate Benchmark Reform Phase 2 (Amendments to IFRS 9, IAS 39 and IFRS 7)						Accounting periods beginning on or after 1 January 2021
Amendments to IFRS 4 Insurance contracts - deferral of IFRS 9						Accounting periods beginning on or after 1 January 2021
Amendments to IFRS 16 Leasing - Covid-19 Related Rent Concessions						Accounting periods beginning on or after 1 April 2021
Interest Rate Benchmark Reform Phase 2 (Amendments to IFRS 9, IAS 39 and IFRS 7)
In September 2020, the IASB published Interest Rate Benchmark Reform Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16), finalising its response to the ongoing reform of interest rate benchmarks around the world. The amendments aim to assist reporting entities to provide investors with useful information about the effects of the reform on their financial statements.
This second set of amendments focus on issues arising post replacement, i.e., when the existing interest rate benchmark is actually replaced with alternative benchmark rates.
The amendments do not impact on the current financial statements as they are related to amendments to hedge accounting requirement which are not relevant to the Group.
Amendments to IFRS 4 Insurance contracts - deferral of IFRS 9
IFRS 9 addresses the accounting for financial instruments and is effective for annual reporting periods beginning on or after 1 January 2018. However, for insurers meeting the eligibility criteria, IFRS 4 provides a temporary exemption which permits them to continue to apply IAS 39 Financial Instruments: Recognition and Measurement rather than implement IFRS 9.
This temporary exemption was applicable to annual periods beginning before 1 January 2021.  In June 2020 the IASB published an amendment to IFRS 4 to extend the temporary exemption from applying IFRS 9 until annual periods beginning before 1 January 2023. This amendment maintains the alignment of the effective dates of IFRS 9 and IFRS 17.
The amendments do not impact on the current financial statements as they are related to insurance contracts which are not relevant to the Group.
2.18 New standards and interpretations (continued)
Amendments to IFRS 16 Leasing - Covid-19 Related Rent Concessions
In May 2020, the IASB issued Covid-19-Related Rent Concessions (Amendment to IFRS 16). The pronouncement amended IFRS 16 Leases to provide lessees with an exemption from assessing whether a COVID-19-related rent concession is a lease modification. On issuance, the practical expedient was limited to rent concessions for which any reduction in lease payments affects only payments originally due on or before 30 June 2021.
An extension was issued on 31 March 2021 which permits a lessee to apply the practical expedient regarding COVID-19-related rent concessions to rent concessions for which any reduction in lease payments affects only payments originally due on or before 30 June 2022 (rather than only payments originally due on or before 30 June 2021).
The amendments do not impact on the current financial statements as no Covid-19 related rent concessions have been recognised.
New and revised IFRS Standards in issue but not yet effective
The following standards have been issued by the IASB and adopted by the EU:
Title						As issued by the IASB, mandatory for accounting periods starting on or after
Amendments to IFRS 3 Business Combinations Reference to the Conceptual Framework						Accounting periods beginning on or after 1 January 2022
Amendments to IAS 16 Property, Plant and Equipment - Proceeds before Intended Use						Accounting periods beginning on or after 1 January 2022
Amendments to IAS 37 Provisions, Contingent Liabilities, Contingent Assets Onerous Contracts - Cost of Fulfilling a Contract						Accounting periods beginning on or after 1 January 2022
Annual Improvements 2018 - 2020						Accounting periods beginning on or after 1 January 2022
There are no anticipated material impacts to the Group from the above new and revised IFRS Standards.
3. Financial risk management
3.1 Financial risk factors
The Group's activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance.
Risk management is carried out by the Risk Committee under policies approved by the Board of Directors. The Board provides principles for overall risk management, as well as policies covering specific areas, such as interest rate risk, credit risk and investment of excess liquidity.
3.2 Market risk
Market risk is the risk of loss that may arise from changes in market factors such as foreign exchange rates, interest rates and general property market risk.
(a) Foreign exchange risk
The Group operates in Germany and is exposed to foreign exchange risk arising from currency exposures, primarily with respect to Sterling against the Euro arising from the costs which are incurred in Sterling. Foreign exchange risk arises from future commercial transactions, and recognised monetary assets and liabilities denominated in currencies other than the Euro.
The Group's policy is not to enter into any currency hedging transactions, as the majority of transactions are in Euros, which is the primary currency of the environment in which the Group operates.  Therefore any currency fluctuations are minimal.
(b) Interest rate risk
The Group has exposure to interest rate risk. It has external borrowings at a number of different variable interest rates. The Group is also exposed to interest rate risk on some of its financial assets, being its cash at bank balances. Details of actual interest rates paid or accrued during each period can be found in note 22 to the consolidated financial statements.
The Group's policy is to manage its interest rate risk by entering into a suitable hedging arrangement, either caps or swaps, in order to limit exposure to borrowings at variable rates.
(c) General property market risk
Through its investment in property, the Group is subject to other risks which can affect the value of property. The Group seeks to minimise the impact of these risks by review of economic trends and property markets in order to anticipate major changes affecting property values.
(d) Market risk - Rent legislation
Through its policy of investing in Berlin, the Group is subject to the risk of changing rental legislation which could affect both the rental income, and the value of property. The Group seeks to mitigate any effect of the changing legislations using strategies set out in the principal risks and uncertainties in this report.
(e) Market risk - Ukraine
Although the Company has no direct exposure to either Russia or Ukraine, it is expected that the continuing conflict will cause an impact on the global economy. These include the possible effects of higher energy prices, the possible knock-on impact of inflation, recession and increasing cyber-attacks.  Additionally, These circumstances have created a degree of uncertainty across global equity markets. The conflict in Ukraine, and the introduction of sanctions against Russia and Belarus, as well as possible second derivative impacts are being closely monitored by the Board and the Property Advisor. Further information regarding the risk to the Company from the crisis in Ukraine can be found in the principal risks and uncertainties in this report.
3.3 Credit risk
The risk of financial loss due to counterparty's failure to honour their obligations arises principally in connection with property leases and the investment of surplus cash.
The Group has policies in place to ensure that rental contracts are made with customers with an appropriate credit history. Tenant rent payments are monitored regularly and appropriate action taken to recover monies owed, or if necessary, to terminate the lease.
Cash transactions are limited to financial institutions with a high credit rating.
3.4 Liquidity risk
The Group's objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans secured on the Group's properties. The terms of the borrowings entitle the lender to require early repayment should the Group be in default with significant payments for more than one month.
3.5 Capital management
The prime objective of the Group's capital management is to ensure that it maintains the financial flexibility needed to allow for value-creating investments as well as healthy balance sheet ratios.
The capital structure of the Group consists of net debt (borrowings disclosed in note 22 after deducting cash and cash equivalents) and equity of the Group (comprising stated capital (excluding treasury shares), reserves and retained earnings).
In order to manage the capital structure, the Group can adjust the amount of dividend paid to shareholders, issue or repurchase shares or sell assets to reduce debt.
When reviewing the capital structure the Group considers the cost of capital and the risks associated with each class of capital. The Group reviews the gearing ratio which is determined as the proportion of net debt to equity. In comparison with comparable companies operating within the property sector the Board considers the gearing ratios to be reasonable.
3.5 Capital management (continued)
The gearing ratios for the reporting periods are as follows:
											As at		As at
										31 December 2021		31 December 2020
											€'000		€'000
Borrowings											(284,155)		(287,549)
Cash and cash equivalents											10,441		36,996
Net debt											(273,714)		(250,553)
Equity											443,627		433,956
Net debt to equity ratio											62%		58%
4. Critical accounting estimates and judgements
The preparation of consolidated financial statements in conformity with IFRS requires the Group to make certain critical accounting estimates and judgements. In the process of applying the Group's accounting policies, management has decided the following estimates and assumptions have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the financial year:
i) Estimate of fair value of investment properties
The valuation of the Group's property portfolio is inherently subjective due to, among other factors, the individual nature of each property, its location and condition, and expected future rentals. The valuation as at 31 December 2021 is based on the rules, regulations and market as at that date.  The fair value estimates of investments properties are detailed in note 16.
The best evidence of fair value is current prices in an active market of investment properties with similar leases and other contracts. In the absence of such information, the Group determines the amount within a range of reasonable fair value estimates. In making its estimate, the Group considers information from a variety of sources, including:
a) Discounted cash flow projections based on reliable estimates of future cash flows, derived from the terms of any existing lease and other contracts, and (where possible) from external evidence such as current market rents for similar properties in the same location and condition, and using discount rates that reflect current market assessments of the uncertainty in the amount and timing of the cash flows.
b) Current prices in an active market  for properties of different nature, condition or location (or subject to different lease or other contracts), adjusted to reflect those differences.
c) Recent prices of similar properties in less active markets, with adjustments to reflect any changes in economic conditions since the date of the transactions that occurred at those prices.
The Directors remain ultimately responsible for ensuring that the valuers are adequately qualified, competent and base their results on reasonable and realistic assumptions. The Directors have appointed JLL as the real estate valuation experts who determine the fair value of investment properties using recognised valuation techniques and the principles of IFRS 13. Further information on the valuation process can be found in note 16.
ii) Judgment in relation to the recognition of assets held for sale
Management has made an assumption in respect of the likelihood of investment properties - held for sale, being sold within 12 months, in accordance with the requirement of IFRS 5. Management considers that based on historical and current experience that the properties can be reasonably expected to sell within 12 months.
5.  Segmental information
The Group's principal reportable segments under IFRS 8 were as follows:
- Residential; and
- Commercial
The Group is required to report financial and descriptive information about its reportable segments. Reportable segments are operating segments or aggregations of operating segments that meet the following specified criteria:
- its reported revenue, from both external customers and intersegment sales or transfers, is 10 per cent or more of the combined revenue, internal and external, of all operating segments, or
- the absolute measure of its reported profit or loss is 10 per cent or more of the greater, in absolute amount, of (i) the combined reported profit of all operating segments that did not report a loss and (ii) the combined reported loss of all operating segments that reported a loss, or
- its assets are 10 per cent or more of the combined assets of all operating segments.
Management have applied the above criteria to the commercial segment and the commercial segment is not more than 10% of any of the above criteria. The Group does not own any wholly commercial buildings nor does management report directly on the commercial results. The Board considers that the non-residential element of the portfolio is incidental to the Group's activities. Therefore, the Group has not included any further segmental analysis within these consolidated audited financial statements.
6.  Revenue
										31 December 2021		31 December 2020
											€'000		€'000
Rental income											20,624		19,055
Service charge income											5,166		4,844
											25,790		23,899
The total future annual minimum rentals receivable under non-cancellable operating leases are as follows:
										31 December 2021		31 December 2020
											€'000		€'000
Within 1 year											1,224		1,267
1 - 2 years											1,177		1,217
2 - 3 years											979		925
3 - 4 years											875		703
4 - 5 years											663		627
Later than 5 years											562		437
											5,480		5,176
Revenue comprises rental income earned from residential and commercial property in Germany. There are no individual tenants that account for greater than 10% of revenue during any of the reporting periods.
The leasing arrangements for residential property are with individual tenants, with one month notice from tenants to cancel the lease in most cases.
The commercial leases are non-cancellable, with an average lease period of 3 years.
7.  Property expenses
										31 December 2021		31 December 2020
											€'000		€'000
Property management expenses											1,195		1,143
Repairs and maintenance											1,731		1,553
Impairment charge - trade receivables											420		160
Service charges paid on behalf of tenants											6,014		7,137
Property advisors' fees and expenses											6,722		6,444
											16,082		16,437
8.  Administrative expenses
										31 December 2021		31 December 2020
											€'000		€'000
Secretarial and administration fees											609		589
Legal and professional fees											2,405		2,364
Directors' fees											287		248
Bank charges											62		32
Loss on foreign exchange											82		69
Depreciation											8		8
Other income											(6)		(47)
											3,447		3,263
Further details of the Directors' fees are set out in the Directors' Remuneration Report in the annual report..
9.  Auditor's remuneration
An analysis of the fees charged by the auditor and its associates is as follows:
										31 December 2021		31 December 2020
											€'000		€'000
Fees payable to the Group's auditor and its associates for the audit of the consolidated financial statements:											237		197
Fees payable to the Group's auditor and its associates for other services:
- Agreed upon procedures - half year report											31		28
- Agreed upon procedures - performance fee											-		11
											268		236
10.  Gain on disposal of investment property (including investment property held for sale)
										31 December 2021		31 December 2020
											€'000		€'000
Disposal proceeds											16,667		9,998
Book value of disposals											(14,309)		(7,479)
Disposal costs											(840)		(341)
											1,518		2,178
12 residential units and eight parking spaces with a value of €5.2 million were notarised in 2020 and completed in 2021, the book value of these units in December 2020 reflected their notarised value. 34 units notarised and completed in 2021, achieving a gross premium to book value of 25.4%, and a premium to book value of 18.8% net of disposal costs.
11.  Investment property fair value gain
										31 December 2021		31 December 2020
											€'000		€'000
Investment property fair value gain											37,983		41,458
Further information on investment properties is shown in note 16.
12.  Net finance charge
										31 December 2021		31 December 2020
											€'000		€'000
Interest income											(26)		6
Interest from related party loans											-		(57)
Change in put option liability arising on settlement											-		591
Finance expense on bank borrowings											7,508		7,659
Net finance charge before (gain) / loss on interest rate swap											7,482		8,199
(Gain) / loss on interest rate swap											(7,313)		2,218
											169		10,417
Finance expense on bank borrowings for the prior period includes a total of €383,000 in respect of loan breakage fees incurred due to the loan refinancing carried out during the year (2021: Nil).
13.  Income tax expense
										31 December 2021		31 December 2020
The tax charge for the period is as follows:											€'000		€'000
Current tax (credit) / charge											(201)		453
Deferred tax charge - origination and reversal of temporary differences											8,083		7,097
											7,882		7,550
The tax charge for the year can be reconciled to the theoretical tax charge on the profit in the Consolidated Statement of Comprehensive Income as follows:
										31 December 2021		31 December 2020
											€'000		€'000
Profit before tax											45,250		37,857
Tax at German income tax rate of 15.8% (2020: 15.8%)											7,150		5,981
Income not taxable											(240)		(344)
Losses carried forward not recognised											972		1,913
Total tax charge for the year											7,882		7,550
Reconciliation of current tax liabilities
										31 December 2021		31 December 2020
											€'000		€'000
Balance at beginning of year											550		1,413
Tax received / (paid) during the year											163		(1,316)
Current tax (credit) / charge											(201)		453
Balance at end of year											512		550
13.  Income tax expense (continued)
Reconciliation of deferred tax
									Capital gains on properties		Interest rate swaps		Total
									€'000		€'000		€'000
									(Liabilities)		Asset	(Net liabilities)
Balance at 1 January 2020									(60,825)		2,529		(58,296)
Charged to the statement of comprehensive income									(7,448)		351		(7,097)
Deferred tax (liability) / asset at 31 December 2020									(68,273)		2,880		(65,393)
Charged to the statement of comprehensive income									(6,925)		(1,158)		(8,083)
Deferred tax (liability) / asset at 31 December 2021									(75,198)		1,722		(73,476)
Jersey income tax
The Group is liable to Jersey income tax at 0%.
German tax
As a result of the Group's operations in Germany, the Group is subject to German Corporate Income Tax ('CIT') - the effective rate for Phoenix Spree Deutschland Limited for 2021 was 15.8% (2020: 15.8%).
Factors affecting future tax charges
The Group has accumulated tax losses of approximately €35 million (2020: €30.0 million) in Germany, which will be available to set against suitable future profits should they arise, subject to the criteria for relief. These losses are offset against the deferred taxable gain to give the deferred tax liability set out above.
14.  Dividends
										31 December 2021		31 December 2020
											€'000		€'000
Amounts recognised as distributions to equity holders in the period:
Interim dividend for the year ended 31 December 2021 of €2.35 cents (2.02p) declared 24 September 2021, paid 29 October 2021 (2020: €2.35 cents (2.1p)) per share.											2,228		2,229
Dividend for the year ended 31 December 2020 of €5.15 cents (4.65p) declared 29 March 2021, paid 7 June 2021 (2020: €5.15 cents (4.4p)) per share.											5,207		4,733
15.  Subsidiaries
The Group consists of a Parent Company, Phoenix Spree Deutschland Limited, incorporated in Jersey, Channel Islands and a number of subsidiaries held directly by Phoenix Spree Deutschland Limited, which are incorporated in and operated out of Jersey and Germany.
Further details are given below:
					Country of incorporation				% holding		Nature of business
Phoenix Spree Deutschland I Limited							Jersey		100		Investment property
Phoenix Spree Deutschland II Limited (Liquidated on 30 December 2021)							Jersey		100				Liquidated
Phoenix Spree Deutschland III Limited							Jersey		100		Investment property
Phoenix Spree Deutschland IV Limited (Liquidated on 30 December 2021)							Jersey		100				Liquidated
Phoenix Spree Deutschland V Limited (Liquidated on 30 December 2021)							Jersey		100				Liquidated
Phoenix Spree Deutschland VII Limited							Jersey		100		Investment property
Phoenix Spree Deutschland IX Limited (Liquidated on 30 December 2021)							Jersey		100				Liquidated
Phoenix Spree Deutschland X Limited							Jersey		100		Finance vehicle
Phoenix Spree Deutschland XI Limited							Jersey		100		Investment property
Phoenix Spree Deutschland XII Limited							Jersey		100		Investment property
Phoenix Property Holding GmbH & Co.KG							Germany		100		Holding Company
Phoenix Spree Mueller GmbH							Germany		94.9		Investment property
Phoenix Spree Gottlieb GmbH							Germany		94.9		Investment property
PSPF Holdings GmbH							Germany		100		Holding Company
Jühnsdorfer Weg Immobilien GmbH							Germany		94.9		Investment property
Phoenix Spree Property Fund Ltd & Co. KG (PSPF)							Germany		100		Investment property
PSPF General Partner (Jersey) Limited							Jersey		100		Management of PSPF
16.  Investment properties
											2021		2020
Fair value											€'000		€'000
At 1 January											768,310		730,160
Capital expenditure											9,477		4,171
Property additions											-		-
Disposals											(14,309)		(7,479)
Fair value gain											37,983		41,458
Investment properties at fair value - as set out in the report by JLL											801,461		768,310
Assets classified as "Held for Sale" (Note 17)											(41,631)		(19,302)
At 31 December											759,830		749,008
The property Portfolio was valued at 31 December 2021 by Jones Lang LaSalle GmbH ("JLL"), in accordance with the methodology described below. The valuations were performed in accordance with the current Appraisal and Valuation Standards, 8th edition (the 'Red Book') published by the Royal Institution of Chartered Surveyors (RICS).
The valuation is performed on a building-by-building basis from source information on the properties including current rent levels, void rates, capital expenditure, maintenance costs and non-recoverable costs provided to JLL by the Property Advisors QSix LLP.  JLL use their own assumptions with respect to rental growth, and adjustments to non-recoverable costs. JLL also uses data from comparable market transactions where these are available alongside their own assumptions.
The valuation by JLL uses the discounted cash flow methodology.  Such valuation estimates using this methodology, however, are inherently subjective and values that would have been achieved in an actual sales transaction involving the individual property at the reporting date are likely to differ from the estimated valuation.
All properties are valued as Level 3 measurements under the fair value hierarchy (see note 31) as the inputs to the discounted cash flow methodology which have a significant effect on the recorded fair value are not observable. Additionally, JLL perform reference checks back to comparable market transactions to confirm the valuation model.
The unrealised fair value gain in respect of investment property is disclosed in the Consolidated Statement of Comprehensive Income as 'Investment property fair value gain'.
Valuations are undertaken using the discounted cash flow valuation technique as described below and with the inputs set out below.
Discounted cash flow methodology ("DCF")
The fair value of investment properties is determined using the DCF methodology.
Under the DCF method, a property's fair value is estimated using explicit assumptions regarding the benefits and liabilities of ownership over the asset's life including an exit or terminal value. The DCF valuation by JLL used ten-year projections of a series of cash flows of each property interest. The cash flows used in the valuation reflect the known conditions existing at the reporting date.
To this projected cash flow series, an appropriate, market derived discount rate is applied to establish the present value of the cash flows associated with each property. The discount rate of the individual properties is adjusted to provide an individual property value that is consistent with comparable market transactions. For properties without a comparable market transaction JLL use the data from market transactions to adjust the discount rate to reflect differences in the location of the property, its condition, its tenants and rent.
The duration of the cash flow and the specific timing of inflows and outflows are determined by events such as rent reviews, lease renewal and related lease up periods, re-letting, redevelopment, or refurbishment.
Periodic cash flow includes cash flows relating to gross income less vacancy, non-recoverable expenses, collection losses, lease incentives, maintenance costs, agent and commission costs and other operating and management expenses. The series of periodic net operating cash flows, along with an estimate of the terminal value anticipated at the end of the ten-year projection period, is then discounted.
Where an individual property has the legal and practical ability to be converted into individual apartments (condominiums) for sale as a condominium, dependent upon the stage of the legal permissions, the additional value created by the conversion is reflected via a lower discount rate applied.
The principal inputs to the valuation are as follows:											Year ended		Year ended
										31 December 2021		31 December 2020
											Range		Range
Residential Properties
Market Rent
Rental Value (€per sq. p.m.)											9.25 - 14.75		10 - 15
Stabilised residency vacancy (% per year)											1 - 3		1 - 4
Tenancy vacancy fluctuation (% per year)											4 - 9.5		5 - 8
Commercial Properties
Market Rent
Rental Value (€per sq. p.m.)											4.6 - 34		2 - 33
Stabilised commercial vacancy (% per year)											0 - 67		1 - 3
Estimated Rental Value (ERV)
ERV per year per property (€'000)											23 - 2,366		64 - 2,278
ERV (€per sq.)											9.25 - 14.75		9 - 15
Notes to the Financial Statements
For the year ended 31 December 2021
Financial Rates - blended average
Discount rate (%)											3.1		3.1
Portfolio yield (%)											2.4		2.2
Having reviewed the JLL report, the Directors are of the opinion that this represents a fair and reasonable valuation of the properties and have consequently adopted this valuation in the preparation of the consolidated financial statements.
The valuations have been prepared by JLL on a consistent basis at each reporting date and the methodology is consistent and in accordance with IFRS which requires that the 'highest and best use' value is taken into account where that use is physically possible, legally permissible and financially feasible for the property concerned, and irrespective of the current or intended use.
Sensitivity
Changes in the key assumptions and inputs to the valuation models used would impact the valuations as follows:
Vacancy: A change in vacancy by 1% would not materially affect the investment property fair value assessment.
Discount rate: An increase of 0.25% in the discount rate would reduce the investment property fair value by €76.1 million, and a decrease in the discount rate of 0.25% would increase the investment property fair value by €94.7 million.
There are, however, inter-relationships between unobservable inputs as they are determined by market conditions. The existence of an increase of more than one unobservable input could amplify the impact on the valuation. Conversely, changes on unobservable inputs moving in opposite directions could cancel each other out or lessen the overall effect.
The Group values all investment properties in one of three ways;
Rental Scenario
Where properties have been valued under the DCF methodology and are intended to be held by the Group for the foreseeable future, they are valued under the "Rental Scenario".
Condominium Scenario
Where properties have the potential or the benefit of all relevant permissions required to sell apartments individually (condominiums) then we refer to this as a 'condominium scenario'. Properties expected to be sold in the coming year from these assets are considered held for sale under IFRS 5 and can be seen in note 17. The additional value is reflected by using a lower discount rate under the DCF methodology. Properties which do not have the benefit of all relevant permissions are described as valued using a standard 'rental scenario'. Included in properties valued under the condominium scenario are properties not yet released to held for sale as only a portion of the properties are forecast to be sold in the coming 12 months.
Disposal Scenario
Where properties have been notarised for sale prior to the reporting date but have not completed; they are held at their notarised disposal value. These assets are considered held for sale under IFRS 5 and can be seen in note 17.
The table below sets out the assets valued using these 3 scenarios:
										31 December 2021		31 December 2020
											€'000		€'000
Rental scenario											762,690		715,870
Condominium scenario											33,050		45,264
Disposal scenario											5,721		7,176
Total											801,461		768,310
The movement in the fair value of investment properties is included in the Consolidated Statement of Comprehensive Income as 'investment property fair value gain' and comprises:
										31 December 2021		31 December 2020
											€'000		€'000
Investment properties											37,817		40,633
Investment properties held for sale (see note 17)											166		825
											37,983		41,458
17.  Investment properties - held for sale
										2021		2020
											€'000		€'000
Fair value - held for sale investment properties
At 1 January											19,302		10,639
Transferred from investment properties											35,886		15,004
Capital expenditure											586		313
Properties sold											(14,309)		(7,479)
Valuation gain on apartments held for sale											166		825
At 31 December											41,631		19,302
17.  Investment properties - held for sale (continued)
Investment properties are re-classified as current assets and described as 'held for sale' in three different situations: Properties notarised for sale at the reporting date, Properties where at the reporting date the group has obtained and implemented all relevant permissions required to sell individual apartment units, and efforts are being made to dispose of the assets (condominium); and Properties which are being marketed for sale but have currently not been notarised.
Properties which no longer satisfy the criteria for recognition as held for sale are transferred back to investment properties at fair value.
Properties notarised for sale by the reporting date are valued at their disposal price (disposal scenario), and other properties are valued using the rental or condominium scenario (see note 16) as appropriate.
Investment properties held for sale are all expected to be sold within 12 months of the reporting date based on management knowledge of current and historic market conditions. While whole properties have been valued under a condominium scenario in note 16, only the expected sales have been transferred to assets held for sale.
The investment properties held for sale have debt of €13.0m (2020: €2.7m) that is repayable upon sale of those investment properties.
18.  Property, plant and equipment
													Equipment
													€'000
Cost or valuation
As at 1 January 2020													127
Disposals													(4)
As at 31 December 2020													123
Disposals													(14)
As at 31 December 2021													109
Accumulated depreciation and impairment
As at 1 January 2020													73
Charge for the year													8
As at 31 December 2020													81
Charge for the year													8
As at 31 December 2021													89
Carrying amount
As at 31 December 2020													42
As at 31 December 2021													20
19. Other financial assets at amortised cost
										31 December 2021		31 December 2020
Current											€'000		€'000
At 1 January											-		1,590
Accrued interest											-		32
Loan repayment											-		(1,622)
At 31 December											-		-
										31 December 2021		31 December 2020
Non-current											€'000		€'000
At 1 January											901		876
Accrued interest											25		25
At 31 December											926		901
The Company entered into a loan agreement with the minority interest of Accentro Real Estate AG. This loan bears interest at 3% per annum.
These assets are considered to have low credit risk and any loss allowance would be immaterial.
20.  Trade and other receivables
										31 December 2021		31 December 2020
											€'000		€'000
Current
Trade receivables											827		707
Less: impairment provision											(315)		(222)
Net receivables											512		485
Prepayments and accrued income											514		16
Investment property disposal proceeds receivable											4,513		2,444
Service charges receivable											5,562		4,895
Prepaid Treasury Shares											-		104
Other receivables											598		470
											11,699		8,414
Ageing analysis of trade receivables
										31 December 2021		31 December 2020
											€'000		€'000
Up to 12 months											511		482
Between 1 year and 2 years											-		3
Over 3 years											1		-
											512		485
Impairment of trade and service charge receivables
The Group calculates lifetime expected credit losses for trade and service charge receivables using a portfolio approach. Receivables are grouped based on the credit terms offered and the type of lease. The probability of default is determined at the year-end based on the aging of the receivables, and historical data about default rates. That data is adjusted if the Group determines that historical data is not reflective of expected future conditions due to changes in the nature of its tenants and how they are affected by external factors such as economic and market conditions.
On this basis, the loss allowance as at 31 December 2021, and on 31 December 2020 was determined as set out below.
The Group applies the following loss rates to trade receivables.
As noted below, a loss allowance of 50% (2020: 50%) has been recognised for trade receivables that are more than 60 days past due except for any receivables relating to the Mietendeckel which are expected to be recovered in full. Any receivables where the tenant is no longer resident in the property are provided for in full.
					Aging
Trade receivables:							0-60 days		Over 60 days		Non-current tenant		Total 2021
Expected loss rate (%)							0%		36%		100%
Gross carrying amount (€'000)							274		371		182		827
Loss allowance provision (€'000)							-		(133)		(182)		(315)
					Aging
Trade receivables:							0-60 days		Over 60 days		Non-current tenant		Total 2020
Expected loss rate (%)							0%		50%		100%
Gross carrying amount (€'000)							352		267		88		707
Loss allowance provision (€'000)							-		(134)		(88)		(222)
Movements in the impairment provision against trade receivables are as follows:
										31 December 2021		31 December 2020
											€'000		€'000
Balance at the beginning of the year											222		223
Impairment losses recognised											420		160
Amounts written off as uncollectable											(327)		(161)
Balance at the end of the year											315		222
All impairment losses relate to the receivables arising from tenants.
21.  Cash and cash equivalents
										31 December 2021		31 December 2020
											€'000		€'000
Cash at bank											9,120		35,971
Cash at agents											1,321		1,025
Cash and cash equivalents											10,441		36,996
22.  Borrowings
							31 December 2021				31 December 2020
						Nominal value			Book value		Nominal value		Book value
							€'000		€'000		€'000		€'000
Current liabilities
Accrued interest  -  NATIXIS Pfandbriefbank AG							1,026		121		901		217
Bank loans - Berliner Sparkasse							801		801		801		801
							1,827		922		1,702		1,018
Non-current liabilities
Bank loans  -  NATIXIS Pfandbriefbank AG							237,678		234,328		240,000		236,789
Bank loans - Berliner Sparkasse							48,905		48,905		49,742		49,742
							286,583		283,233		289,742		286,531
							288,410		284,155		291,444		287,549
The Group has complied with the financial covenants of its borrowing facilities during the 2021 and 2020 reporting periods. The difference between book values and nominal values in the table above relates to unamortised transaction costs
All borrowings are secured against the investment properties of the Group. As at 31 December 2021, the Group had an undrawn debt facilities of €59.1m (2020: ˆNil).
23.  Trade and other payables
										31 December 2021		31 December 2020
											€'000		€'000
Trade payables											2,758		1,410
Accrued liabilities											1,472		2,463
Service charges payable											5,203		5,145
Advanced payment received on account											2,437		-
Deferred income											23		-
											11,893		9,018
Advanced payment received on account relates to disposal proceeds received prior to the balance sheet date for units that proceeded to change ownership in the first quarter of 2022.
24.  Derivative financial instruments
										31 December 2021		31 December 2020
											€'000		€'000
Interest rate swaps - carried at fair value through profit or loss
Balance at 1 January											18,197		15,979
Fair value movement through profit or loss											(7,313)		2,218
Balance at 31 December											10,884		18,197
The notional principal amounts of the outstanding interest rate swap contracts at 31 December 2021 were €204,269,000 (2020: €204,269,000). At 31 December 2021 the fixed interest rates vary from 0.775% to 1.24% (2020: 0.24% to 1.07%) above the main factoring Euribor rate, and mature between September 2026 and February 2027.
Maturity analysis of interest rate swaps
										31 December 2021		31 December 2020
											€'000		€'000
Less than 1 year											-		-
Between 1 and 2 years											-		-
Between 2 and 5 years											10,405		-
More than 5 years											479		18,197
											10,884		18,197
25.  Other financial liabilities
										31 December 2021		31 December 2020
											€'000		€'000
Current
Balance at beginning of year											-		6,951
Change in put option liability on settlement											-		591
Exercise of put option											-		(7,542)
Balance at end of year											-		-
26.  Share based payment reserve
												Performance fee
													€'000
Balance at 1 January 2020													6,808
Fee credit for the period													(439)
Balance at 31 December 2020													6,369
Fee charge for the year													343
Settlement of performance fee													(6,369)
Balance at 31 December 2021													343
The share-based payment reserve was established in relation to the issue of shares for the payment of the performance fee to the property advisor.
Property Advisor performance fee
The Property Advisor is entitled to an asset and estate management performance fee, measured over consecutive three-year periods, equal to 15% of the excess by which the annual EPRA NTA total return of the Group exceeds 8% per annum, compounding (the 'Performance Fee'). The Performance Fee is subject to a high watermark, being the higher of:
(i) EPRA NTA per share at 1 January 2021; and
(ii) the EPRA NTA per share at the end of a Performance Period in relation to which a performance fee was earned in accordance with the provisions contained with the Property Advisor and Investor Relations Agreement.
Should a fee be due, the fee will be settled shortly after the release of the 2023 annual report in shares of the Company and, being determined by reference to an equity-based formula, meets the definition of a share based payment arrangement.  The 2020 fee was settled during the year and the 2021 fee will be settled in 2023.
27.  Stated capital
										31 December 2021		31 December 2020
											€'000		€'000
Issued and fully paid:
At 1 January											196,578		196,578
At 31 December											196,578		196,578
The number of shares in issue at 31 December 2021 was 100,751,410 (31 December 2020: 100,751,410).
Treasury shares
The reserve for the Company's treasury shares comprises the cost of the Company's shares held by the Group. At 31 December 2021, the Group held 7,949,293 of the Company's shares (2020: 4,628,500). During the year a further 4,514,788 shares were purchased in the market, and 1,193,995 was issued out of shares held in treasury in settlement of the performance fee due to the Property Advisor for the performance period ended December 2020.
28.  Non-controlling interests
									Non-controlling interest %	31 December 2021		31 December 2020
											€'000		€'000
Phoenix Spree Mueller GmbH									5.1%		1,475		1,329
Phoenix Spree Gottlieb GmbH									5.1%		1,342		1,250
Jühnsdorfer Weg Immobilien GmbH									5.1%		770		951
											3,587		3,530
29.  Earnings per share and EPRA earnings per share
										31 December 2021		31 December 2020
Earnings per share
Earnings for the purposes of basic earnings per share being net profit attributable to owners of the parent (€'000)											37,311		29,788
Weighted average number of ordinary shares for the purposes of basic earnings per share (Number)											94,973,655		97,136,617
Effect of dilutive potential ordinary shares (Number)											72,433		1,806,285
Weighted average number of ordinary shares for the purposes of diluted earnings per share (Number)											95,046,088		98,942,902
Earnings per share (€)											0.39		0.31
Diluted earnings per share (€)											0.39		0.30
29.  Earnings per share and EPRA earnings per share (continued)
EPRA earnings per share
Earnings for the purposes of basic earnings per share being net profit attributable to owners of the parent (€'000)											37,311		29,788
Changes in value of investment properties											(37,983)		(41,458)
Profit or loss on disposal on investment properties											(1,518)		(2,178)
Changes in fair value of financial instruments											(6,970)		1,779
Deferred tax adjustments											8,083		7,097
Change in Non-controlling interest											240		498
EPRA Earnings											(837)		(4,474)
Weighted average number of ordinary shares for the purposes of basic earnings per share (Number)											94,973,655		97,136,617
EPRA Earnings per Share (€)											(0.01)		(0.05)
Diluted EPRA Earnings per Share (€)											(0.01)		(0.05)
30.  Net asset value per share and EPRA net asset value
										31 December 2021		31 December 2020
Net assets (€'000)											440,040		430,426
Number of participating ordinary shares											92,802,117		96,122,909
Net asset value per share (€)											4.74		4.48
According to the EPRA Best Practices Recommendations published in October 2019, three new Net Asset Value measures have been introduced for ongoing financial years from 1 January, 2020.
EPRA NRV (Net Reinstatement Value) - this includes transfer duties of the property assets.
EPRA NTA (Net Tangible Assets) - the Company buys and sells assets leading to taking account of certain liabilities.
EPRA NDV (Net Disposal Value) - the value for the shareholder in the event of a liquidation.
The net asset value calculation is based on the Group's shareholders' equity which includes the fair value of investment properties, properties held for sale as well as financial instruments.
The number of diluted shares does not include treasury shares.
									EPRA NRV		EPRA NTA		EPRA NDV
									€'000		€'000		€'000
At 31 December 2021
IFRS Equity attributable to shareholders									440,040		440,040		440,040
Include / Exclude*:
Hybrid instruments									(343)		(343)		(343)
Diluted NAV									439,697		439,697		439,697
Include*:
Revaluation of Investment Property									-		-		-
Revaluation of Investment Property under Construction									-		-		-
Revaluation of other non-current investments									-		-		-
Revaluation of tenant leases held as finance leases									-		-		-
Revaluation of trading properties									-		-		-
Diluted NAV at Fair Value									439,697		439,697		439,697
Exclude*:
Deferred tax in relation to fair value gains of Investment Property									73,476		73,476
Fair value of financial instruments									10,884		10,884
Goodwill as a result of deferred tax									-		-		-
Goodwill as per the IFRS balance sheet									-		-		-
Intangibles as per the IFRS balance sheet									-		-		-
Include*:
Fair value of fixed interest rate debt													3,051
Revaluation of intangibles to fair value									-
Real estate transfer tax									65,072		-
NAV									589,129		524,057		442,748
Fully diluted number of shares									92,802,117		92,802,117		92,802,117
NAV per share (€)									6.35		5.65		4.77
30.  Net asset value per share and EPRA net asset value (continued)
									EPRA NRV		EPRA NTA		EPRA NDV
									€'000		€'000		€'000
At 31 December 2020
IFRS Equity attributable to shareholders									430,426		430,426		430,426
Include / Exclude:
Hybrid instruments									(6,369)		(6,369)		(6,369)
Diluted NAV									424,057		424,057		424,057
Include*:
Revaluation of Investment Property									-		-		-
Revaluation of Investment Property under Construction									-		-		-
Revaluation of other non-current investments									-		-		-
Revaluation of tenant leases held as finance leases									-		-		-
Revaluation of trading properties									-		-		-
Diluted NAV at Fair Value									424,057		424,057		424,057
Exclude:
Deferred tax in relation to fair value gains of Investment Property									65,393		65,393
Fair value of financial instruments									18,197		18,197
Fair value of fixed interest rate debt													2,946
Real estate transfer tax									62,721		-
NAV									570,368		507,647		427,003
Fully diluted number of shares									96,122,909		96,122,909		96,122,909
NAV per share (€)									5.93		5.28		4.44
31.  Financial instruments
The Group is exposed to the risks that arise from its use of financial instruments. This note describes the objectives, policies and processes of the Group for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented throughout the consolidated financial statements.
Principal financial instruments
The principal financial instruments used by the Group, from which financial instrument risk arises, are as follows:
• Cash and cash equivalents
• Trade and other receivables
• Other financial assets
• Trade and other payables
• Borrowings
• Derivative financial instruments
The Group held the following financial assets at each reporting date:
										31 December 2021		31 December 2020
											€'000		€'000
At amortised cost
Trade and other receivables - current											11,185		8,294
Cash and cash equivalents											10,441		36,996
Other financial assets at amortised cost											926		901
											22,552		46,191
The Group held the following financial liabilities at each reporting date:
										31 December 2021		31 December 2020
											€'000		€'000
Held at amortised cost
Borrowings payable: current											922		1,018
Borrowings payable: non-current											283,233		286,531
Trade and other payables											11,893		9,018
											296,048		296,567
Fair value through profit or loss
Derivative financial liability - interest rate swaps											10,884		18,197
											10,884		18,197
											306,932		314,764
31.  Financial instruments (continued)
Fair value of financial instruments
The fair values of the financial assets and liabilities are not materially different to their carrying values due to the short term nature of the current assets and liabilities or due to the commercial variable rates applied to the long term liabilities.
The interest rate swap was valued by the respective counterparty banks by comparison with the market price for the relevant date.
The interest rate swaps are expected to mature between September 2026 and February 2027.
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities;
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly; and
Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.
During each of the reporting periods, there were no transfers between valuation levels.
Group Fair Values
										31 December 2021		31 December 2020
Financial assets/ (liabilities)											€'000		€'000
Interest rate swaps - Level 2 - current											(10,405)		-
Interest rate swaps - Level 2 - non-current											(479)		(18,197)
											(10,884)		(18,197)
Financial risk management
The Group is exposed through its operations to the following financial risks:
• Interest rate risk
• Foreign exchange risk
• Credit risk
• Liquidity risk
The Group's policies for financial risk management are outlined below.
Interest rate risk
The Group's interest rate risk arises from certain of its borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. The Group is also exposed to interest rate risk on cash and cash equivalents.
Under interest rate swap contracts, the Group agrees to exchange the difference between fixed and floating rate interest amounts calculated on agreed notional principal amounts. Such contracts enable the Group to mitigate the risk of changing interest rates on the cash flow exposures on the issued variable rate debt held.
Sensitivity analysis has not been performed as all variable rate borrowings have been swapped to fixed interest rates, and potential movements on cash at bank balances are immaterial.
The Group gives careful consideration to interest rates when considering its borrowing requirements and where to hold its excess cash. The Directors believe that the interest rate risk is at an acceptable level.
Foreign exchange risk
The Group is exposed to foreign exchange risk on sales, purchases, and translation of assets and liabilities that are in a currency other than the functional currency (Euros).
The Group does not enter into any currency hedging transactions and the Directors believe that the foreign exchange rate risk is at an acceptable level.
The carrying amount of the Group's foreign currency (non Euro) denominated monetary assets and liabilities are shown below, all the amounts are for Sterling balances only:
										31 December 2021		31 December 2020
											€'000		€'000
Financial assets
Cash and cash equivalents											563		174
Financial liabilities
Trade and other payables											(494)		(408)
Net position											69		(234)
At each reporting date, if the Euro had strengthened or weakened by 10% against GBP with all other variables held constant, post-tax profit for the year would have increased/(decreased) by:
						Weakened by 10% Increase/(decrease) in post-tax profit and impact on equity					Strengthened by 10% Increase/(decrease) in post-tax profit and impact on equity
									€'000				€'000
31 December 2021									7				(7)
31 December 2020									(23)				23
31.  Financial instruments (continued)
Credit risk management
Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in financial loss to the Group. Credit risk arises principally from the Group's trade and other receivables and its cash balances. The Group gives careful consideration to which organisations it uses for its banking services in order to minimise credit risk. The Group has an established credit policy under which each new tenant is analysed for creditworthiness and each tenant is required to pay a two-month deposit.
At each reporting date the Group had no tenants with outstanding balances over 10% of the total trade receivables balance.
The Group holds cash at the following banks: Barclays Private Clients International Jersey Ltd, Deutsche Bank AG, Berliner Sparkasse and Hausbank. The split of cash held at each of the banks respectively at 31 December 2021 was 26% / 57% / 10% / 7% (31 December 2020: Barclays Private Clients International Jersey Ltd, Deutsche Bank AG, Berliner Sparkasse and Mittelbrandenburgische Sparkasse the split was 34% / 59% / 3% / 2%). Barclays and Deutsche Bank have credit ratings of A and A- respectively, Berliner Sparkasse and Mittelbrandenburgische Sparkasse have a credit rating of A+.
The Group holds no collateral as security against any financial asset. The carrying amount of financial assets recorded in the financial information, net of any allowances for losses, represents the Group's maximum exposure to credit risk.
Details of receivables from tenants in arrears at each reporting date can be found in note 20 as can details of the receivables that were impaired during each period.
An allowance for impairment is made using an expected credit loss model based on previous experience. Management considers the above measures to be sufficient to control the credit risk exposure.
The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.
The carrying amount of financial assets recorded in the financial statements, which is net of impairment losses, represents the Group's maximum exposure to credit risk as no collateral or other credit enhancements are held.
Liquidity risk management
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group's approach to managing liquidity risk is to ensure that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or damage to the Group's reputation.
The Directors manage liquidity risk by regularly reviewing cash requirements by reference to short term cash flow forecasts and medium-term working capital projections prepared by management.
The Group maintains good relationships with its banks, which have high credit ratings.
The following table details the Group's remaining contractual maturity for its non-derivative financial liabilities with agreed maturity periods. The table has been drawn up based on the undiscounted cash flows of the financial liabilities based on the earliest date on which the Group can be required to pay. The tables include both interest payable and principal cash flows.
Maturity analysis for financial liabilities
					Less than 1 year		Between 1 - 2 years		Between 2 - 5 years		More than 5 years		Total
					€'000		€'000		€'000		€'000		€'000
At 31 December 2021
Borrowings payable: current					922		-		-		-		922
Borrowings payable: non-current					-		-		-		283,233		283,233
Other financial liabilities					-		-		-		-		-
Trade and other payables					11,893		-		-		-		11,893
					12,815		-		-		283,233		296,048
					Less than 1 year		Between 1 - 2 years		Between 2 - 5 years		More than 5 years		Total
					€'000		€'000		€'000		€'000		€'000
At 31 December 2020
Borrowings payable: current					1,018		-		-		-		1,018
Borrowings payable: non-current					-		-		-		286,531		286,531
Trade and other payables					9,018		-		-		-		9,018
					10,036		-		-		286,531		296,567
32. Capital commitments
										31 December 2021		31 December 2020
											€'000		€'000
Contracted capital commitments at the end of the year											-		2,783
Capital commitments include contracted obligations in respect of the enhancement and repair of the Group's properties.
33. Related party transactions
Related party transactions not disclosed elsewhere are as follows:
Property Advisor Fees
In November 2018 the Company signed a new contract with the Property Advisor, which superseded the previous property advisor agreement. Under the Property Advisory Agreement for providing property advisory services, the Property Advisor will be entitled to a Portfolio and Asset Management Fee as follows:
(i) 1.2% of the EPRA NTA of the Group where EPRA NTA of the Group is equal to or less than €500 million; and
(ii) 1% of the EPRA NTA of the Group greater than €500 million.
The Property Advisor is entitled to receive a finance fee equal to:
(i) 0.1% of the value of any borrowing arrangement which the Property Advisor has negotiated and/or supervised; and
(ii) a fixed fee of £1,000 in respect of any borrowing arrangement which the Property Advisor has renegotiated or varied.
The management fee will be reduced by the aggregate amount of any transaction fees and finance fees payable to the Property Advisor in respect of that calendar year.
The Property Advisor is entitled to a capex monitoring fee equal to 7% of any capital expenditure incurred by any Subsidiary which the Property Advisor is responsible for managing.
The Property Advisor is entitled to receive a transaction fee fixed at £1,000 in respect of any acquisition or disposal of property by any Subsidiary.
The Property Advisor is entitled to a letting fee equal to between one and three month's net cold rent (being gross rents receivable less service costs and taxes) for each new tenancy signed by the Company where the Property Advisor has sourced the relevant tenant.
The Property Advisor shall be entitled to a fee for Investor Relations Services at the annual rate of £75,000 payable quarterly in arrears.
QSix Residential Limited, was the Group's appointed Property Advisor. Partners of QSix Residential Limited formerly sat on the Board of PSD and retains a shareholding in the Group. During the year ended 31 December 2021, an amount of €6,722,029 (€6,653,493 Management Fees and €90,437 Other expenses and fees) (2020: €6,443,811 (€6,295,082 Management Fees and €148,729 Other expenses and fees)) was payable to QSix Residential Limited. At 31 December 2021 €977,260 (2020: €336,251) was outstanding. Fees payable to the Property Advisor in relation to overseeing capital expenditure during the year were €397,440 (2020: €252,000).
The Property Advisor is also entitled to an asset and estate management performance fee. The charge for the period in respect of the performance fee was €343,000 (2020: Credit of €439,000). Please refer to note 26 for more details.
The Property Advisor has a controlling stake in IWA Real Estate GmbH & Co. KG who are contracted to dispose of condominiums in Berlin on behalf of the Company. During the period, fees of €639,000 were charged (2020: €nil).
Apex Financial Services (Alternative Funds) Limited, the Company's administrator provided administration and company secretarial services. During the period, fees of €609,000 were charged (2020: €592,000) with €154,000 (2020: €nil) outstanding.
In March 2015 the Group entered into a five-year option agreement to acquire the remaining 5.2% interest in Phoenix Spree Property Fund Ltd. & Co.KG (PSPF) from the limited partners M Hilton and P Ruddle both then Directors of PMM Partners (UK) Limited. The options were exercised three months after the fifth anniversary of the majority interest acquisition, on 1 July 2020. The option was settled for €7,542,000 and was settled in cash for €5,920,000 net of initial loans to the limited partners of €1,622,000. €7.542,000 being 5.2% of the net asset value of PSPF at the time of settlement, as set out in the original 2015 agreement. For their role as limited partners in Phoenix Spree Property Fund Ltd. & Co. KG up to their date of exit, they were paid €30,000.
Fees payable to Directors during the year amounted to €287,000 (2020: €248,000).
Dividends paid to directors in their capacity as a shareholder amounted to €2,976 (2020: €3,494).
34.  Events after the reporting date
The Company had exchanged contracts for the sale of 10 residential units and one attic unit in Berlin with aggregated consideration of €5.7 million prior to the reporting date. The sale of these units subsequently completed in Q1 2022.
In Q1 2022 the Company exchanged contracts for the sale of six condominiums in Berlin for an aggregate consideration of €2.1 million. Completion of these contracts is expected in Q2 2022.
In Q1 2022, 240,463 of the Company's shares were bought back with average price paid of £3.87, an 18.4 per cent discount to December 2021 EPRA NTA per share of £4.76. In March 2022, the Company exchanged contracts to acquire a portfolio of 17 new-build, semi-detached, residential properties (34 houses) for a purchase price of €18.5 million. Further information can be found in this report. Legal Entity Identifier: 213800OR6IIJPG98AG39
Professional Advisors
Property Advisor					QSix Residential Limited
					54-56 Jermyn Street
					London SW1Y 6LX
Administrator, Company Secretary and Registered Office
					Apex Financial Services (Alternative Funds) Limited
					12 Castle Street
					St Helier
					Jersey JE2 3RT
Registrar					Link Asset Services (Jersey) Limited
					12 Castle Street
					St. Helier
					Jersey JE2 3RT
Principal Banker					Barclays Bank Plc, Jersey Branch
					13 Library Place
					St. Helier
					Jersey JE4 8NE
UK Legal Advisor					Stephenson Harwood LLP
					1 Finsbury Circus
					London EC2M 7SH
Jersey Legal Advisor					Mourant
					22 Grenville St.
					St. Helier
					Jersey JE4 8PX
German Legal Advisor					Mittelstein Rechtsanwälte
as to property law					Alsterarkaden 20
					20354 Hamburg
					Germany
German Legal Advisor as					Taylor Wessing Partnerschaftsgesellschaft mbB
to German partnership law					Thurn-und-Taxis-Platz 6
					60313 Frankfurt a.M.
					Germany
Sponsor and Broker					Numis Securities Limited
					45 Gresham Street
					10 Paternoster Square
					London
					EC2V 7BF
Independent Property Valuer					Jones Lang LaSalle GmbH
					Rahel-Hirsch-Strasse 10
					10557 Berlin
					Germany
Auditor					RSM UK Audit LLP
					25 Farringdon Street
					London EC4A 4AB

 

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