June 3 2025 16:10
GERMANY
Sirius Real Estate, the JSE and LSE-listed owner and operator of branded business and industrial parks providing conventional space and flexible workspace in Germany and the UK, has grown its dividends 12 years in a row. This was revealed in its consolidated financial results for the year to end-March 2025, which were released this week.
The group achieved a 75% increase in profit before tax to €201.6m (2024: €115.2m) primarily because of an €81.0m asset management led valuation gain, compared with €12.4m in 2024.
Like-for like rent roll growth of 6.3% to €205.6m was achieved compared with 2024’s €193.5m, driven by continued strong organic growth and occupier demand in Germany and the UK.
A 11.8% increase in Funds from Operations (FFO) to €123.2m was achieved compared with 2024’s €110.2m with a FFO per share of 8.44c (2024: 8.95c) reflecting the dilutionary effect of the November 2023 and July 2024 equity raises which are not yet fully invested. The operating profit increased 65.2% to €215.9m compared with 2024’s €130.7m. The group suffered a 4.7% decrease in EPRA earnings per share to 7.82c compare with 2024’s 8.21c. Basic earnings per share increased 39.4% to 12.20c compared with 2024’s 8.75c, while headline earnings per share decreased 0.7% to 8.06c compared with 2024’s 8.12c.
A progressive second half dividend of 3.09c per share was declared compared with the 2024 financial year’s 3.05c per share, amounting to a 1.7% uplift in the total dividend for the financial year to 6.15c (2024: 6.05c). The value of the investment property portfolio rose 12.6% to €2,488.1m compared with 2024’s €2,210.6m, including an €81.0m asset management led uplift.
As much as £141.5m (€168.7m) was invested in six UK acquisitions (notarised or completed) adding £12.8m (€14.3m) of annualised net operating income, at an average gross yield of 10.7% and 93.2% occupancy. As much as €101.3m was invested in Germany in six acquisitions (notarised or completed) at a 9.9% average gross yield, with 77.2% occupancy presenting an opportunity for future rental growth. Sirius disposed of four assets in the UK with limited further growth opportunities and annualised NOI of £1.2m (€1.4m) completed for £13.7m (€16.3m), all at premium to book value Post the reporting period, Sirius disposed of a mature asset in Pfungstadt, Germany with an annualised NOI of €2.2m, notarised for €30.0m at premium to book value. An equity raise of €180.9m (€174.5m net of costs) was completed in July 2024. Sirius had €571.3m worth of cash at March 31 2025 (2024: €214.5m), which provided capacity for acquisitions, investment and refinancing of its €400m bond due in June 2026. Its loan-to-value (LTV) sat at 31.4% and its net debt to EBITDA was 5.2x, comfortably inside its 40% and 8x target caps respectively.
Sirius was trading in line with management’s expectations in the new financial year it said.
“This has been another strong year of performance for Sirius during which we have delivered for shareholders our 23rd consecutive increase in dividend over a twelve-year period that has included a number of significantly challenging macro events. The progress made in the year under review serves as a good example of how we have achieved this track record, having successfully raised capital both in the debt and equity markets allowing us then to take advantage of market timing to make some €270 million of accretive acquisitions. These have both added day one operating income and materially increased the pipeline of organic value creation opportunities within our portfolio. Our asset management teams across the Sirius German and UK platforms have continued to drive strong operational results, notably with a 6.3% growth in like-for-like rent roll which in turn supported valuation growth and helped us deliver further profitability,” CEO Andrew Coombs said.
“Looking ahead we will continue to focus on extracting the latent value within our existing portfolio, although our overriding priority for the year ahead is ensuring we fully capitalise on the remaining window of opportunity to make acquisitions before the next cycle begins in earnest, given we may well either be at or near, and in some areas past, the bottom of the current cycle. We are also working hard to ensure we are as well placed as possible to benefit from the recently announced increases in defence spending to 2.5% of GDP in the UK and, most notably, in Germany where the government has outlined an expected €400bn on defence spending out of a total €900bn security and infrastructure investment package. We believe that even if only a small part of this flows into our asset classes, defence has the potential to become a major growth sector and driver of demand for warehouse and manufacturing space, where the rent is ultimately government derived. We are actively positioning our offering to attract some of this expected business,” he said.
alistair@propertyflash.co.za