Property Flash


April 17 2023 

Sirius Real Estate, a JSE-listed, owner and operator of branded business and industrial parks providing conventional space and flexible workspace in Germany and the UK, released a trading statement on Monday, providing an update on trading for its financial year to end-March 2023. 

"In what has been a more challenging economic backdrop during the year, the group has achieved an 8.1% increase in overall rent roll and 7.7% on a like for like basis, reflecting management's ability to capture rental growth in the current inflationary environment," it said. 

For the ninth consecutive year, the group has achieved like for like rent roll growth in excess of 5%. Cash collection has remained robust at above 98.5% on a rolling 12-month basis. Sirius expects to deliver full year results in line with market expectations. 

In Germany, its rental rates grew largely in line with our rent roll, reflecting the stable occupancy rates in the country. Sirius' in-house asset management platform manages product mix and occupancy carefully alongside rate to yield the best overall returns from our space. 

In Sirius' recently acquired UK business, BizSpace, the group successfully firmed rental rates to position its assets for better returns in the long term. Rent roll growth in the UK was in line with the group level and rental rates have increased well in excess of inflation. 

"We have been comfortable ceding a small amount of occupancy in return for these higher rates and we believe this positions the business well to take advantage of any recovery in the macroeconomic climate," Sirius said. 

The group's balance sheet had cash reserves of €123m with around 90% of the group's debt maturing in excess of three years. During the year the group re-financed its Berlin Hyp AG €170m facility at a 4.26% interest rate for a seven-year term, which from commencement in November 2023 will take the overall weighted average group cost of debt to 1.9%. During the past twelve months, the group's acquisitions and disposals were largely matched, at approximately €45m of each. 

"Our disposals strategy remains opportunistic and fixed on non-core or mature assets with little upside, where we can achieve returns in excess of book value, as evidenced through the 25% combined premium to book value achieved on the six disposals completed during the past 12 months," the group said. 

Andrew Coombs, CEO of Sirius Real Estate said Sirius was performing well despite investment uncertainty about property stocks in the wake of the war in Ukraine.

"Against a challenging market backdrop during the year, Sirius has delivered another period of strong operational performance. The group expects to deliver results for the financial year ended March 31 2023 in line with market expectations, and I look forward to the announcement of our fully audited results on Monday June 5th," said Coombs. 

Sirius is listed on the main and premium market of the London Stock Exchange and the main board of the JSE. It is an owner and operator of branded business and industrial parks providing conventional space and flexible workspace in Germany and the UK. 

As of March 31 2022, and following the acquisition of BizSpace, a UK provider of regional flexible workspace, the group's portfolio comprised 140 assets let to 9,452 tenants with a total book value of over €2bn, generating a total annualised rent roll of €167.1m. Sirius also holds a 35% stake in Titanium, its €350m German-focused joint venture with clients of AXA IM Alts.

Sirius' share price was up 15.31% year-to-date by mid-trade on Tuesday.

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