Phoenix Spree D Regulatory News (PSDL)

Phoenix Spree Deutschland Limited

("Phoenix Spree", or the "Company")

Statement re. Share Price

Phoenix Spree Deutschland (LSE: PSDL.LN), the UK listed real estate company specialising in Berlin residential property, provides a statement regarding new Berlin state rent proposals.

The Board notes the recent weakness in the share price of Phoenix Spree, which has resulted in the shares trading at a 27% discount to EPRA Net Asset Value as at 31 December 2018. The decline in share price is in line with the listed German peer group and, the Board believes, reflects market concern following press reports of the possibility of new rent controls being proposed by the Berlin state government.

Further details of the proposals are expected to emerge during August, which the Company will review carefully. To the extent that rental legislation has always been determined under Federal legislation, the Board believes there are serious concerns regarding the constitutionality of the new rent proposals and there is no certainty that these proposals will come into effect. We would expect an increasing number of legal challenges.

It should be noted that there already exist a number of rent control instruments in the Berlin market and, during its 12 years of operation, the Company has adapted many times to the changing environment while still delivering positive returns to investors each year. The Board believes the Company has significant strategic flexibility to adapt its business model if required. As per the Annual Report over half of the buildings the Company holds are already split into condominiums

Furthermore, there is a significant body of evidence from other markets where stringent rent controls have been imposed which seek to limit rent levels to below that set by the market indicating that this leads to a reduction in the supply of rental properties.

As previously disclosed, the Company is in the process of completing a significant refinancing which will deliver sufficient liquidity in order to take advantage of opportunities arising from this uncertainty.

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