Phoenix Spree Deutschland sells non-core Bavarian portfolio

Phoenix Spree Deutschland has sold a portfolio of non-core properties in Bavaria, Germany, for a total of €35.25m in cash, as it moves to further focus its operation on capital city Berlin.

It said had exchanged contracts for the portfolio of 17 non-core properties in Nuremberg and Fuerth, having acquired them in 2007 and 2008 for a total price of €13.9m.

Proceeds from the sale represented an 11% premium to the end-2016 valuation by Jones Lang LaSalle. They would be used to reduce debt, fund further acquisitions in Berlin and invest in the existing portfolio.

As a result, properties located in Berlin would represent about 82% of Phoenix Spree Deutschland's portfolio value.

The company said the disposal was expected to have a positive impact on EPRA NAV after transaction costs and taxes.

Chief executive Joerg Schwagenscheidt said the transaction was another important milestone.

"The disposal represents a profitable exit from the region, releasing capital from non-core assets which can be redeployed to increase our exposure to the attractive Berlin residential market."

"We will maintain our highly disciplined approach to acquiring properties in Berlin, targeting those which fit our strict return criteria and where we can continue to add value."

At 14:22 GMT, shares in Phoenix Spree Deutschland were down 0.22% to 232p each.