TIDMSRE
RNS Number : 1904K
Sirius Real Estate Limited
09 April 2018
9 April 2018
Sirius Real Estate Limited
("Sirius Real Estate" or the "Company")
Trading Update
Sirius Real Estate, the leading operator of branded business
parks providing conventional space and flexible workspace in
Germany, is pleased to provide the following trading update for the
twelve months to 31 March 2018.
Strong tenant demand combined with specific asset management
initiatives has generated an encouraging increase in organic rental
growth from the Group's business parks. The Company is pleased to
confirm that it expects results for the twelve month period to be
in line with market expectations, a particularly good performance
given the disposal of EUR103.0 million of mature assets. Sirius is
well placed for the new financial year and has identified
significant income and capital growth opportunities in its newly
acquired assets to support the Group's next phase of growth.
The main highlights for the period include:
-- Total annualised rental income, including acquisitions within
the period, increased by EUR4.8 million to EUR75.8 million as at 31
March 2018, in spite of losing EUR7.1 million of annualised rental
income from disposed assets. Annualised rental income has since
further increased to in excess of EUR79.0 million with the recent
acquisitions completed on 1 April 2018.
-- Like-for-like annualised rental income increased in excess of
5%, supported by continued occupier demand and organic rental
income growth driven by the Company's internal operating
platform.
-- The original capex investment programme which commenced in
2014 continues to deliver strong results with more space completed
in the period. Furthermore, the acquisitions capex investment
programme is progressing well with additional sub-optimal space
from newly acquired properties identified for investment being
added to the programme since the half year.
-- Significant transactional activity with proceeds from the
sale of EUR103 million of mature assets and two capital raises,
EUR15.0 million in March 2017 and EUR25.0 million in July 2017,
part-funding the acquisition of 13 assets (2 shortly after period
end) for EUR163.7 million including acquisition costs. Average
occupancy of the acquired assets is in the region of 58% providing
new rental income and capital growth opportunities.
-- Sirius is pleased to announce the recent completion of the following acquisitions:
o On 31 March 2018, Sirius completed the acquisition of a
business park with warehouse, office and production space in
Frickenhausen for EUR11.2 million (including acquisition costs).
The site has 29,000 sqm of lettable space and is currently 50%
occupied. In 2017, the site generated EUR451,000 in NOI
representing an EPRA net initial yield of 4.0%.
o On 1 April 2018, Sirius completed the acquisition of a
business park in Saarbrucken for EUR28.1m (including acquisition
costs). The site has 47,000 sqm of lettable space currently the
majority is let as office space and it is 65% occupied. In 2017,
the site generated EUR2.5 million of NOI representing an EPRA net
initial yield of 9.0%.
o On 1 April 2018, Sirius completed the acquisition of a second
business park in Dusseldorf for EUR8.1 million (including
acquisition costs). This site has 9,000 sqm of warehouse and office
space and is currently 80% occupied. In 2017, the site generated
NOI of EUR536,000 representing an EPRA net initial yield of
6.6%.
-- In March 2018, the Company successfully raised EUR40 million
in new equity to acquire further assets, three of which are in
advanced negotiations.
-- The Company continues to secure advantageous long-term
borrowing facilities on attractive terms with three new loan
facilities being agreed in the period totalling EUR79.0 million as
well as EUR15.0 million in capex facilities.
-- Sirius's continuing success has meant that it has qualified
for inclusion in two important investment indices. In March 2018,
the Company's shares qualified for inclusion in the FTSE
EPRA/NAREIT Global Real Estate Index, Developed EMEA region and
this followed the Company's entry into the FTSE/JSE SA Listed
Property Index in December 2017.
The Board looks forward to providing a more detailed report on
the Company's trading performance and outlook when it announces its
results for the twelve months to 31 March 2018, in June 2018.
The financial information on which this trading update is based,
has not been reviewed or reported on by the Company's external
auditors
Andrew Coombs Chief Executive Officer of Sirius Real Estate,
said:
"Given a key focus in the period was on recycling capital from
mature assets into new opportunities with greater value add
potential, it is particularly pleasing to have sold and reinvested
over EUR250 million of property whilst also delivering increases in
rental income on a total and like-for-like basis.
I believe this reflects a number of key factors, namely: good
occupational demand for our workspace products from the large
German SME sector; the effectiveness and speed of Sirius's internal
operating platform to source new tenants (instead of using third
party brokers), the ability to incorporate the acquired assets and
focus on maximising revenue potential; and the ongoing success of
the Company's major capex investment programme through which
sub-optimal space is transformed into either prime lettable space
or one of the Company's premium Smartspace products.
We are starting the new financial year with 230,000 sqm of newly
acquired property to which we can apply our asset management
techniques to generate increased returns from and support the
Group's next phase of growth."
For further information:
Sirius Real Estate
Andrew Coombs, CEO
Alistair Marks, CFO +49 (0)30 285010110
Novella
Tim Robertson
Toby Andrews +44 (0)20 3151 7008
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.
For more information, please visit:
www.sirius-real-estate.com
Images of the Sirius property portfolio are available from:
https://www.flickr.com/photos/sirius_re/
Follow us on Twitter at @SiriusRE
LEI: 213800NURUF5W8QSK566
This information is provided by RNS
The company news service from the London Stock Exchange
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