SIRIUS REAL ESTATE
LIMITED
(Incorporated in
Guernsey)
Company Number: 46442
JSE Share Code: SRE
LSE (GBP) Share Code: SRE
LEI: 213800NURUF5W8QSK566
ISIN Code: GG00B1W3VF54
15 April 2024
Sirius Real Estate
Limited
("Sirius Real Estate",
"Sirius", the "Group" or the "Company")
Trading Update for financial
year ended 31 March 2024
8.2%* increase in Group rent
roll
Sirius Real Estate, the leading
owner and operator of branded business and industrial parks
providing conventional space and flexible workspace in Germany and
the U.K., provides an update on trading for its financial year
ended 31 March 2024.
The Group has achieved an 8.2%*
increase in overall rent roll (7.2%* on a like-for-like basis),
reflecting management's ability to improve both rates and occupancy
across the Group in spite of the wider macroeconomic conditions.
For the tenth consecutive year, the Group has achieved
like-for-like rent roll growth in excess of 5%, with similar levels
achieved across both the U.K. and Germany. Cash collection has
remained robust at above 98.0% on a rolling 12-month basis. The
Group expects to deliver full year results in line with market
expectations.
In Germany, rent roll particularly
benefited from greater occupancy as we focused efforts on selling
vacant space and improving tenant retention. With inflation now
having fallen significantly since last year, we have again
demonstrated the strength of our in-house asset management platform
to manage product mix and occupancy carefully alongside rates, with
the aim of generating the best overall returns from our space.
Whilst we expect to see some slight yield expansion in our year end
property valuations for Germany, we expect our strong operational
performance will translate into an increase in value of our German
portfolio.
In the U.K., we continue to achieve
above inflation rate increases in rent, albeit at slightly lower
levels than in the recent past, but as with Germany we have
successfully focused our efforts on occupancy, where we have
delivered an improvement. Like for like rent roll growth in both
countries ended the year at broadly similar levels, and in the
U.K., recent acquisitions have had a materially positive effect on
the absolute rent roll given their materiality in the context of
the business. We expect to see valuation yields continue to expand
in the U.K., albeit our continued operational focus on driving
rental income will offset much of the effect of yield changes on
the portfolio valuation. Overall, we expect to announce a positive
valuation movement at Group level at the year end.
In November 2023, the Company
completed an oversubscribed equity fundraising of €165 million
(£147 million) to provide funds to execute on a pipeline of
acquisition opportunities. We have successfully executed on that
pipeline in the second half of the financial year, notarising or
acquiring approximately €150 million of assets (excluding
acquisitions costs). €96 million (£84 million) (excluding
acquisition costs) of these acquisitions were in the U.K., with a
weighted average net initial yield (NIY) of 8.9%. We also made four
acquisitions in Germany, totalling €55 million (excluding
acquisition costs), which were acquired at a weighted average NIY
of 9.3%.
Disposals in the second half
amounted to €51 million. All sales were completed at or above book
value and focused predominantly on mature assets in Germany at a
weighted average NIY of 6.4%. Efficient capital recycling will be a
mainstay of Sirius' strategy as we continue to see attractive
acquisition opportunities that meet our acquisitions criteria in
both the U.K. and Germany, alongside opportunities to sell mature
or non-core assets, with the aim to do so at or above book
value.
The Group's balance sheet remains
strong with free cash reserves of approximately €220 million as at
31 March 2024 (before completion of four post balance sheet
acquisitions totalling €91 million) and no significant debt
maturities until June 2026. The Group's weighted average cost of
debt is 2.1% and the weighted average maturity is 3.9 years
following last year's successful re-financing of the 7 year €170
million Berlin Hyp AG facility at 4.26% and the 7 year €58.3
million Deutsche Pfandbriefbank AG facility at 4.25%.
Whilst the Group is mindful of the
expected higher interest expense arising from future re-financings,
it is also confident that leverage will continue to have a positive
overall effect on shareholder returns, given the relatively high
yielding nature of the Group's assets and the continued growth in
the rent roll which will help to offset future increases in
financing costs. The higher interest rate environment is also
reflected in expanding market yields which has delivered some
highly attractive acquisitions for the Group in the last few
months.
Commenting on trading during the period, Andrew Coombs, Chief
Executive Officer of Sirius Real Estate, said:
"Sirius has delivered
another twelve months of strong operational performance, increasing
rates and occupancy and quickly executing on our significant
pipeline of acquisitions in both Germany and the U.K., following
our successful £147 million equity raise last November. Raising
capital at that time has proved to be opportune, allowing us to
acquire high quality real estate on very attractive financial
terms. Our acquisition pipeline remains strong and we believe there
will continue to be opportunities to deploy our capital on an
accretive basis in the coming year.
As we begin to drive value from our
recent asset acquisitions alongside our continued focus on
operational excellence, we look ahead with confidence. The strength
and breadth of our management team in being able to execute on
acquisitions whilst still delivering good growth from our existing
portfolio is encouraging, and I look forward to leading the
business through the next stage of growth."
Full
Year Results
Sirius will announce results for the
financial year ended 31 March 2024 on Monday, 3 June 2024, at which
time there will be an in-person presentation and virtual webinar
for analysts and investors.
The financial information in this
trading update has not been reviewed or reported on by the
Company´s external auditors or a reporting accountant.
*Group rent
roll has been translated utilising a constant foreign currency
exchange rate of GBP:EUR 1.1695, being the closing exchange rate as
at 31 March 2024.
For
further information:
Sirius Real Estate
Andrew Coombs, CEO / Chris Bowman,
CFO
+49 (0) 30 285 010 110
FTI
Consulting (Financial
PR)
Richard Sunderland / James McEwan /
Talia Shirion / Millie James
+44 (0) 20 3727 1000
SiriusRealEstate@fticonsulting.com
NOTES TO EDITORS
About Sirius Real Estate
Sirius is a property company listed
on the main and premium market of the London Stock Exchange and the
main board of the JSE Limited. It is a leading owner and operator
of branded business and industrial parks providing conventional
space and flexible workspace in Germany and the U.K. As of 30
September 2023, the Group's portfolio comprised 139 assets let to
9,248 tenants with a total book value of over €2 billion,
generating a total annualised rent roll of €184.2 million. Sirius
also holds a 35% stake in Titanium, its €350+ million
German-focused joint venture with clients of AXA IM
Alts.
The Company's strategy centres on
acquiring business parks at attractive yields and integrating them
into its network of sites - both under the Sirius and BizSpace
names and alongside a range of branded products. The business then
seeks to reconfigure and upgrade existing and vacant space to
appeal to the local market via intensive asset management and
investment and may then choose to refinance or dispose of assets
selectively once they meet maturity, to release capital for new
investment. This active approach allows the Company to generate
attractive returns for shareholders through growing rental income,
improving cost recoveries and capital values, and enhancing returns
through securing efficient financing terms.
For more information, please
visit: www.sirius-real-estate.com
Follow us on LinkedIn
at https://www.linkedin.com/company/siriusrealestate/
Follow us on X (Twitter) at
@SiriusRE
JSE Sponsor
PSG Capital
