(Alliance News) - Phoenix Spree Deutschland Ltd on Monday said it terminated a funding commitment due to a decline in property values across Berlin.
The Berlin-focused residential real estate investor said it terminated the forward funding commitment for a development project located in Brandenburg, the German state encircling Berlin.
"The company has elected not to continue with the project given the decline in property values that has been observed across Berlin during the past 18 months and more expensive financing conditions. The decision is in line with the company's previous commitment not to undertake further acquisitions and to ensure leverage is maintained at an appropriate level for the current stage in the real estate cycle," it said.
The company will not have to pay penalties and will make no further payments regarding the cancelled plans. It had made an initial payment of EUR5.5 million in March 2022.
Further, the firm is able to reclaim about EUR1.2 million in real estate transfer tax which had been incurred on the project. The disposal also removes the requirement to fund a further EUR13 million of development payments in 2024.
Phoenix Spree Deutschland will release a trading update for 2023 on February 7.
Phoenix Spree Deutschland shares fell 2.4% to 165.00 pence each on Monday morning in London.
By Tom Budszus, Alliance News slot editor
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Phoenix Spree D (PSDL)