Sirius Real Estate Limited Trading Statement (6764N)
October 28 2016 - 1:00AM
UK Regulatory
TIDMSRE
RNS Number : 6764N
Sirius Real Estate Limited
28 October 2016
28 October 2016
Sirius Real Estate Limited
("Sirius Real Estate" or the "Company")
Trading Statement
Sirius Real Estate, the leading operator of branded business
parks providing conventional space and flexible workspace in
Germany, is pleased to announce the following trading statement for
the six months to the 30(th) September 2016.
Sirius has made a good start in the first half, helped by strong
occupational demand from the German SME market, together with
contributions from new acquisitions and the capital expenditure
programme. This, combined with a successful fundraising in June and
a further reduction in the average cost of debt supports a positive
outlook for the business. The Company is therefore pleased to
confirm that it expects the results for the six months to 30(th)
September 2016 to be in line with expectations and is on track to
achieve a good result for the full year.
The main highlights for the period include:
-- The majority of Sirius' tenants come from the German SME
market which is a substantial part of the German economy. Sirius'
well established proposition offers SME companies flexible leases
so that they can adapt the space they have to their fast-changing
needs. The success of this format is shown by occupancy increasing
on a like-for-like basis to its highest level yet of 81%* as at 30
September 2016 and like-for-like rate per sqm increasing to
EUR5.07* from EUR5.02** at the start of the financial year.
-- Like-for-like annualised rent roll as at 30 September 2016
increased by 2.4% in the six-month period to EUR64.5 million from
EUR63.0 million** at the start of the financial year. A significant
part of the rent roll increase came from the Company's major
capital investment programme through which sub-optimal space is
transformed into either prime lettable space or one of the
Company's premium Smartspace product range.
-- In June 2016, the Company completed a successful equity
fundraising which was enlarged from EUR20 to EUR30 million in
response to investor demand. The rationale for the fundraising was
to support the acquisition of multi-let office and warehouse
business parks with EPRA net initial yields in excess of 8%. The
Company's ability to access 7 year debt at rates at or around 1.6%
makes such acquisitions highly accretive to shareholder
returns.
-- In September 2016, Sirius completed the acquisition of the
Dresden business park for EUR28.6 million (including acquisition
costs) representing an 8.3% EPRA net initial yield. Currently, the
site has a total annual rental income of EUR2.78 million from a
broad base of 60 tenants with a weighted average lease length
remaining of 3.3 years. The business park comprises 18 buildings
with 53,200 sqm of gross lettable area on 190,000 sqm of land. The
further opportunity with this park lies in the 35% vacancy which is
ideal for re-development into prime space, alongside applying the
Company's service charge recovery expertise to grow net rental
income.
-- The Company also expects to complete the acquisition of a
multi-let office building in Wiesbaden for EUR17.7 million
(including acquisition costs) on Monday 31 October 2016,
representing a 9.1% EPRA net initial yield. Currently, the site has
19,602 sqm of gross lettable area, of which 65% is occupied by 3
tenants paying a total annual rental income of EUR1.88 million,
with an average unexpired lease term of 2.7 years. Similarly, the
significant vacant space on this site represents an investment
opportunity to create new prime space and increase rental
income.
-- Following on from recent financing successes, the Company
continues to reduce the average cost of its borrowings and expects
to shortly complete a new 7 year EUR70 million banking facility
with BerlinHyp. This will further reduce the weighted average cost
of debt and the increased facility will be used to part fund the
Dresden and Wiesbaden properties as well as preserve EUR10 million
of equity, available to support the purchase of further assets from
the pipeline of potential acquisitions that have been
identified.
* Including the Dresden acquisition, total occupancy as at
30(th) September 2016 was 80% and average rate per sqm was
EUR5.10
** Starting annualised rent roll and rate per sqm includes the
position of the existing portfolio at 31 March 2016 plus the
starting position of the Markgroeningen and Krefeld acquisitions
which completed in May 2016.
The Board looks forward to providing a more detailed report on
the Company's trading performance and outlook when it announces its
half-year results for the six months to 30 September 2016 on 28
November 2016.
Andrew Coombs, Chief Executive Officer, said, "This has been a
good start to the current financial year, during which we have
continued to see revenue increases, further acquisitions,
reductions in the cost of debt and improvements in the Company's
profitability. Our role now is to continue this momentum and take
advantage of the opportunities available to the business. We have a
clear strategy to do so, one element of which is to pursue our aim
of moving to a main market listing on both the LSE and JSE which
will help support our objectives."
Enquiries:
Sirius Real Estate +49 (0)30 285010110
Andrew Coombs, CEO
Alistair Marks, CFO
Peel Hunt +44 (0)20 7418 8900
Capel Irwin
Edward Fox
Canaccord Genuity Limited +44 (0)20 7523 8000
Bruce Garrow
Chris Connors
JSE Sponsor: PSG Capital +27 (0)21 887 9602
David Tosi
Willie Honeyball
Novella +44 (0)20 3151 7008
Tim Robertson
Toby Andrews
Background to Sirius Real Estate:
Established in February 2007, Sirius Real Estate, is the leading
operator of branded business parks providing conventional space and
flexible workspace in Germany. The Company owns and operates a
portfolio of 42 business parks which together include over 400
buildings offering over 1.3 million sqm of gross lettable space
comprising mainly offices, production areas and storage facilities.
Sirius operates out of its head office in Berlin and employs circa
201 people in Germany. In December 2014, Sirius was the first
company to gain a secondary listing on Johannesburg Stock Exchange
under the fast track process, in addition, to a primary listing on
the AIM market of the London Stock Exchange.
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/
This information is provided by RNS
The company news service from the London Stock Exchange
END
TSTDDLFLQBFXFBB
(END) Dow Jones Newswires
October 28, 2016 02:00 ET (06:00 GMT)