Sirius Real Estate, the German-based real estate investment trust (Reit), which listed on the JSE in December 2014, is on an acquisition path which will see it expand aggressively into the UK.
Sirius was formed and run by British investors in the 2000s. It owned varied office assets including shared offices as well as a few other types of assets but started to battle to make consistent returns. Then, current CEO Andrew Coombs was appointed to refocus the business and improve its fortunes. The company invested in German business parks which were designed to service small and medium enterprises. These parks tended to be in industrial and office areas on the outskirts of Germany’s largest cities as opposed to in busy office centres.
Sirius has also developed an operations system which supports these parks. The system has been lauded as has Sirius’ success in Germany, which is Europe’s largest economy. The likes of Inospace, a South African property company and Industrials Reit, a British property company, have been inspired by Sirius with respect to the business models they use.
Sirius reported in recent financial results that at the end of March, its group portfolio included 140 business park assets worth around €2bn. Further, it manages seven business parks which are owned by an entity called Titanium, which was created by Sirius and AXA IM Alts. Sirius holds a 35% equity share in Titanium.
Sirius ventured outside of Germany when it bought Biz Space for £245m in England a few months ago. Biz Space owns and operates 72 industrial, studio and flexible office units.
Sirius also owns a personal storage business. It typically rents to tenants who are in between homes or need to store holiday equipment such as skis and boats.
Sirius’ total market capitalisation is around R24bn, placing it among the twenty largest and also most liquid JSE-listed Reits. It is also listed on the London Stock Exchange, where it has a market capitalisation of £1.22bn.
Coombs said this week that Sirius would spend €100m (R1.68bn) on acquisitions as the company recognised the growth in demand for its services with European and British economies recovering post the worst of the Covid-19 pandemic.
Coombs has said that Sirius is targeting a market capitalisation of £5bn within the next few years.