Speymill Deutsche Immobilien Co PLC
21 September 2007
Speymill Deutsche Immobilien Company plc ('SDIC' or 'the Company')
C Share Portfolio Investment Update
Speymill Deutsche Immobilien Company plc (AIM: SDIC; SDCC), the pan-German
residential property investment company listed on AIM, announces further
investments for the second tranche of funds raised ('the C Share Portfolio').
Main highlights as at 17 September 2007 are:
- Residential properties in and around various German cities and towns
have been notarised (i.e. committed to be purchased) for a cumulative
cash consideration of approximately EUR124.1 million.
- Initial net rental income (as at notarisation) is expected to be
approximately EUR8.4 million per annum (though this amount will be
temporarily augmented by initial rental guarantees for vacancies while
certain refurbishments are being carried out).
- Blended net initial property yield (as at notarisation) is expected to
be 6.6% (*excluding rental guarantees for certain properties - please
see below), and is anticipated to rise to 7.4% at the end of the
period commencing 12 months after completion of all acquisitions, full
takeover of property management and completion of refurbishments
*Rental guarantees are in place during the period of refurbishment and
until one year following the completion of those refurbishments
(refurbishment costs of approximately EUR 8 million are to be borne by the
selling entities) for approximately EUR39.6 million of the current
notarised properties. Including these rental guarantees, these properties
are expected to deliver annual rental income of almost EUR3.1 million,
equating to an effective net initial property yield of approximately 7.7%.
Taking these rental guarantees into account in the overall portfolio
figures, the blended net initial yield is expected to be approximately
The Company has notarised 2,395 apartment block units at an overall average
price of EUR766 per square metre. There were approximately 384 vacant units at
notarisation (circa 16% vacancy). These include units in buildings covered by
the aforementioned initial rental guarantees (most at 95% of maximum rental
income as at notarisation). Thus the adjusted vacancy in terms of rental income
is approximately 4.7%.
Refurbishment related costs of over EUR3.5 million are to be borne by the fund
entities in addition to any costs covered by sellers.
After contract completion and when the properties have been taken over,
refurbished and are fully under management for a suitable period, the Company
will target a 95% overall occupancy rate (allowing for some natural vacancy and
tenant fluctuation). It is envisaged that this target will be reached in the
second year after takeover.
Where the Investment Manager and Investment Advisor feel certain deals in the
market may be overpriced, in light of the tightening of credit markets, they are
holding back in the expectation of obtaining more advantageous prices.
Summary SDCC Portfolio Information
Total Number of Units 2,395
Total Purchase Price EUR 124.1 million
Average Price per m2 EUR 766
Net Rental Income EUR 8.4 million
Net Initial Yield 6.6%
Stabilised Yield 7.4%
The stabilised (normalised) rent represents a target income level based on a 95%
of maximum rents. If not already achieved, it is envisaged that this will be
reached in the second year after takeover.
In the few months to one year after assuming full ownership and management, the
rental income level may temporarily fall from the level at notarisation for the
- the buildings may be subject to some refurbishment which can lead to
increased tenant turnover;
- during the handover period between notarisation and completion, the
incumbent owner may be less active in managing the property and,
consequently, there may be additional vacancies that will need to be
replaced through letting activity following completion; or
- the building's operating/service charge costs may have to be subsidised
out of rental income before a reconciliation with tenants occurs (this
typically occurs in the year following takeover).
21 September 2007
Smith & Williamson Corporate Finance Limited +44 (0)20 7131 4000
Azhic Basirov / Siobhan Sergeant
Fairfax I.S. PLC +44 (0)20 7598 5368
Paul Richards / James King
Notes to editors:
- Speymill Deutsche Immobilien Company plc is a pan-German residential
property investment company which listed on AIM on March 2006, raising £170
million on admission.
- In May 2007, the Company raised a further EUR250 million through a placing
of C Shares which were admitted to trading on AIM on 10 May 2007.
- The Company was established to invest in the German property market and,
predominantly, in the residential sector. It is anticipated that once
fully invested, the Company will have a balanced portfolio of properties
- The Company's objective is to provide Shareholders with an attractive level
of income together with the prospect for long-term capital growth.
- The Manager is Speymill Property Managers Limited and the Investment
Adviser is GOAL Service GmbH. The Manager and Investment Adviser are
responsible for identifying new investment opportunities.
- The Manager is a subsidiary of Speymill Group plc (AIM: SYG) while the
Investment Adviser is a joint venture partner of Speymill Group plc (which
owns 51% of the venture).
This information is provided by RNS
The company news service from the London Stock Exchange