Speymill Deutsche reports €36m loss

German residential property company Speymill Deutsche, which is backed by a number of heavyweight investors, has posted a €36 million (£28.65 million) after-tax loss for the second half of 2007.

Speymill Deutsche said downward valuations, the cost of debt and a €32 million refurbishment programme had contributed to the loss, which compared to €1.86 million profit in the same period of 2006.

The results will be a dissapointment to the company's principle shareholders, believed to include RMB INternational on 11.76%, Artemis on 10.51% and Standard Life on 9.69%.

Company chairman Raymond Apsey said the write downs were attributable to one-off losses on the cost of interest rate hedging and purchase costs as the company expended.

‘Property acquisitions were completed in November 2007. Annualised net rents at notarisation were €67.3 million representing an initial yield of 7.1%,’ said Apsey.

‘Prompt action was taken to implement value-enhancing portfolio management policies as soon as the properties were acquired.’

‘Such extensive work necessarily causes some pain in the short-term with a resultant increase in vacancies and decrease in rental income.’

The company has announced an interim dividend of 7.62 euro cents per share to paid on 18 June. With acquisitions, the group’s property portfolio value rose from €86.1 million to €1.125 billion over the six months.    

Other major holders are thought to include Credit Suisse on 7.71%, Sloane Robinson on 6.89% and Investec Asset Management on 4.21%.