TIDMSRE
RNS Number : 9757V
Sirius Real Estate Limited
13 August 2020
SIRIUS REAL ESTATE LIMITED
(Incorporated in Guernsey)
Company Number: 46442
JSE Share Code: SRE
LSE (EUR) Share Code: ESRE
LSE (GBP) Share Code: SRE
ISIN Code: ISIN GG00B1W3VF54
13 August 2020
Sirius Real Estate Limited
("Sirius Real Estate", "Sirius" or the "Company")
Business Update
Sirius Real Estate, the leading operator of branded business
parks providing conventional space and flexible workspace in
Germany, today provides an update on the business.
Cash Collection
The Company's response to the Covid-19 pandemic has been split
into three phases. The first phase involved managing the business
during Germany's national lockdown while the second phase was
focused on working with our tenants as they brought their staff
back to work.
Following the return to work of many tenants in June and July
2020, the Company is entering the third phase of its response which
involves actively assisting tenants in getting back to operating on
a business as usual basis, while working, where required, to adapt
to changes in their space requirements.
As at 31 July 2020, the Company had collected EUR39.9 million in
rent and service charges relating to the period April-June 2020
compared to EUR39.9 million for the same period in the prior year.
The cash collection rate relating to rent and service charges for
the period April-June 2020 was 95.9% compared to 98.2% for the same
period in the prior year and resulted in uncollected rent and
service charges for the period April-June 2020, of EUR1.4 million
(excluding VAT), of which EUR212k relates to insolvency cases. The
majority of the uncollected debt relates to 41 tenants with
outstanding rent and service charges totalling EUR0.9 million out
of a total tenant base of approximately 5,000.
The Company expects to collect in the region of EUR0.8 million
of the uncollected rent and service charges for the period
April-June 2020 over the next twelve months through a combination
of regular cash collection activities and the use of deferred
payment plans. To date a total of seven deferred payment plans have
been granted to tenants facing Covid-19 related difficulties
amounting to just under EUR0.1 million.
The cash collection performance to date is reflective of the
Company's ability to engage actively with and manage its tenants as
well as the extent and efficiency with which the German government
has acted to support businesses during the Covid-19 pandemic.
Enquiries
The Company is pleased to report an increase in enquiry levels
of 6.7% for the period between 1 April and 31 July 2020 compared to
the same period in the prior year. Analysis of enquiry data
confirms a particular increase in the number of enquiries for
storage, which makes up 35% of the Company's total lettable space,
from new commercial tenants as well as from new self-storage
customers. The table below compares enquiries between 2019 and 2020
in the April-July period.
No. of enquiries No. of enquiries Change
2019 2020
April 1,099 1,202 +9.4%
----------------- ----------------- -------
May 1,188 1,248 +5.1%
----------------- ----------------- -------
June 1,181 1,368 +15.8%
----------------- ----------------- -------
July 1,392 1,367 -1.8%
----------------- ----------------- -------
Total 4,860 5,185 +6.7%
----------------- ----------------- -------
Lettings
The period April-June 2020 saw an approximate 11% decrease in
the number of new lettings and reduction in square metres let
compared to the same period in the prior year. The number of new
lettings in the month of July 2020 recovered to within 4% of the
same month in the prior year; however, in terms of square metre
volume represented a 16% increase. Similarly, following the
immediate impact of the Covid-19 outbreak, the Company's enquiry to
sales conversion ratio fell to just under 10% in April; however,
since May there has been progressive development in the enquiry to
sales conversion ratio which, by the month of July, had been
restored to meet the internal target of 15%.
Details of lettings between April and July 2020, compared to the
previous year are set out below:
April May June July
2019 2020 2019 2020 2019 2020 2019 2020
------- ------- ------- ------- ------- ------- -------
No of
new lettings 87 115 174 130 201 165 224 215
------- ------ ------- ------- ------- ------- ------- -------
Sqm 12,353 8,025 11,873 11,282 13,276 11,242 11,351 13,170
------- ------ ------- ------- ------- ------- ------- -------
In July 2020, a total of 215 new lettings were secured across
13,170 sqm generating EUR1.0 million of annualised rent roll. Total
annualised rent roll generated from new lettings in the period
April-July 2020 amounted to EUR3.5 million compared to EUR4.3
million for the same period in the prior year.
The Company has experienced a reduction in underlying occupancy
of circa 1% between 31 March 2020 and 30 June 2020 primarily
reflecting the impact of known move outs; however, this has been
partially offset by an increase of 0.7% in average rate per square
metre in the same period.
Enquiries for storage have increased as set out above and new
lettings for out-of-town conventional and flexible offices remain
strong representing 45% of new lettings completed between 1 March
2020 and 31 July 2020.
Balance Sheet
As previously announced, the Company successfully drew down the
final tranche of its Schuldschein facility in July amounting to
EUR20.0 million. The Schuldschein loan facility is unsecured with
the final tranche charged with a fixed interest rate of 1.6% and
maturing in July 2023.
As at 31 July 2020, the Company held total cash balances of
EUR137.0 million, of which EUR112.5 million is unrestricted. This
is before the payment of the dividend relating to the second half
of the financial year ended 31 March 2020 on 20 August 2020, which
is expected to amount to EUR12.6 million in cash. In addition, the
Company has fully guaranteed undrawn facilities of EUR13.1 million.
The Company holds 12 of its business park assets on an unencumbered
basis, has a net LTV of approximately 33%, a weighted average cost
of debt of 1.49% and interest cover in excess of 10x at net
operating income level.
Andrew Coombs, Chief Executive Officer of Sirius Real Estate,
commented: "Sirius's business model is built on the breadth of our
offering to occupiers and the adaptability of our mix of
accommodation, ranging across many different workspace segments,
including commercial storage, self-storage, out-of-town
conventional and flexible office as well as manufacturing. In
addition, the portfolio is well diversified in terms of both
geography and tenant base.
"Sirius entered this crisis with a strong balance sheet, and we
have navigated the first two phases of our Covid-19 response with
relative success. We are now entering the third phase and focussing
on managing our client base carefully as the longer-term impacts of
Covid-19 are absorbed. We remain focused on delivering attractive
risk-adjusted returns through active asset management. With its
significant cash resources, Sirius is actively seeking new
acquisitions to grow the portfolio, as well as to invest in it in
order to attract new tenants and to capture reversionary potential
from vacated space."
Disclaimer
The information and numbers in this statement are unaudited. The
Company reaches its half year point for the financial year ending
31 March 2021 on 30 September 2020 and looks forward to publishing
a trading update around the time of the end of our half year
period.
S
For further information:
Sirius Real Estate
Andrew Coombs, CEO/Alistair Marks, CFO
Tel: +49 (0)30 285010110
Tavistock (Financial PR)
Jeremy Carey/James Verstringhe
Tel: +44 (0)20 7920 3150/+ 44 (0)7836 734 625
Email: siriusrealestate@tavistock.co.uk
NOTES TO EDITORS
About Sirius Real Estate
Sirius is a property company listed on the main market and
premium segment of the London Stock Exchange and the main board of
the Johannesburg Stock Exchange. It is a leading operator of
branded business parks providing conventional space and flexible
workspace in Germany. The Company's core strategy is the
acquisition of business parks at attractive yields, the integration
of these business parks into its network of sites under the
Company's own name as well as offering a range of branded products
within those sites, and the reconfiguration and upgrade of existing
and vacant space to appeal to the local market, through intensive
asset management and investment. The Company's strategy aims to
deliver attractive returns for shareholders by increasing rental
income and improving cost recoveries and capital values, as well as
by enhancing those returns through financing its assets on
favourable terms. Once sites are mature and net income and values
have been optimised, the Company may take the opportunity to
refinance the sites to release capital for investment in new sites
or consider the disposal of sites in order to recycle equity into
assets which present greater opportunity for the asset management
skills of the Company's team.
In July 2019, the Company completed the formation of its
Titanium real estate investment venture with clients represented by
AXA Investment Managers - Real Assets. Titanium was formed through
the acquisition by AXA IM - Real Assets, on behalf of its clients,
from Sirius, of a 65% stake in five business parks across Germany.
Sirius will retain the remaining 35% and will act as operator of
the assets, on a fee basis. Subject to suitable investment
opportunities, AXA IM - Real Assets and Sirius may consider
opportunities to grow Titanium's portfolio primarily through the
acquisition of larger stabilised business park assets and
portfolios of assets with strong tenant profiles and occupancy.
Sirius will continue to grow its wholly owned portfolio through
acquisitions of more opportunistic assets, where it can capitalise
on its asset management expertise to maximise utilisation of the
space, grow occupancy and improve quality of the tenants. The
strategies have been clearly defined so that the JV does not
conflict with Sirius's existing business.
For more information, please visit:
www.sirius-real-estate.com
Follow us on LinkedIn at
https://www.linkedin.com/company/siriusrealestate/
Follow us on Twitter at @SiriusRE
LEI: 213800NURUF5W8QSK566
JSE Sponsor: PSG Capital
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END
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