TIDMSRE
RNS Number : 0494V
Sirius Real Estate Limited
12 April 2021
SIRIUS REAL ESTATE LIMITED
(Incorporated in Guernsey)
Company Number: 46442
JSE Share Code: SRE
LSE (GBP) Share Code: SRE
LEI: 213800NURUF5W8QSK566
ISIN Code: GG00B1W3VF54
12 April 2021
Sirius Real Estate Limited
("Sirius Real Estate", "Sirius" or the "Company")
TRADING UPDATE SHOWS PLATFORM CONTINUES TO DRIVE STRONG RENTAL
GROWTH AND CASH COLLECTION DESPITE COVID PANDEMIC
Sirius Real Estate, the leading owner and operator of branded
business and industrial parks providing conventional space and
flexible workspace in Germany, provides an update on trading for
the year to 31 March 2021.
Highlights
-- 7.6% growth in total annualised rent roll to EUR97.2 million (2020: EUR90.3 million)
-- Seventh consecutive year of like for like rent roll growth of
above 5% with a 5.2% increase to EUR94.3 million (2020:
EUR89.6million)
-- 3.5% increase in like for like rental rate per sqm to EUR6.17
(2020: EUR5.96) with total rate increasing to EUR6.17 (2020:
EUR5.98)
-- Total occupancy increased to 87.0% (2020: 85.3%) with like
for like occupancy increasing to 86.9% (2020: 85.2%)
-- Cash collection rate of 98.2% for the twelve-month period to 31 March 2021
-- Return to acquisitive growth with five assets totalling
EUR45.9 million completed within or notarised during the year
-- Continued development of the Company's Titanium venture with
AXA IM Alts through the notarisation of an acquisition in Augsburg
for EUR79.9 million which completed shortly after the year end
-- Total cash balance of approximately EUR65.5 million, of which EUR49.1 million is unrestricted
Operating platform driving strong leasing momentum and rental
growth
Despite the impact of the pandemic and some large, expected move
outs in recently acquired sites the Company achieved an increase in
annualised like for like rent roll of 5.2%, the seventh consecutive
year of increases in excess of 5%.
Underpinning this strong performance was the Company's ability,
through its internal operating platform, to generate a marked year
on year increase in the number of enquiries while maintaining high
sales conversion levels. In the year to 31 March 2021 a total of
17,536 enquiries were generated representing an increase of 18.5%
on the 14,795 enquiries generated last year. New lettings amounted
to 161,065 sqm (2020: 162,607 sqm) whilst the Company's sales
conversion ratio remained relatively stable at 13% (2020: 14%).
Following a modest reduction in occupancy in the first half of
the financial year the Company successfully grew like for like
occupancy by 1.7% to 86.9% by the year end, while total Company
occupancy amounted to 87.0%.
The largest contributor to the increase in annualised rent roll
came from a 3.5% increase in like for like average rental rate per
sqm, with the total rental rate increasing by 3.2% to EUR6.17.
Cash collection remains strong
Through its dedicated cash collection and on site teams the
Company made a concerted effort to work with its tenants throughout
the crisis, initially to help them adjust to Germany's national
lockdown, including advising them on how to access government
support initiatives, and subsequently helping them bring their
staff back to work as well as then adapting their space in order to
operate safely and efficiently.
As a result of these efforts, and due to the diverse and
resilient nature of the businesses operating from our assets, the
Company will report a cash collection success rate of 98.2% for the
year ended 31 March 2021. With a total of EUR143.8 million invoiced
relating to the twelve-month period a total of EUR141.1 million was
collected resulting in EUR2.7 million of outstanding debt the
majority of which the Company expects to collect over time.
Total write offs in the period amounted to EUR151,000 whilst the
Company agreed a total of 13 deferred payment plans, relating to
EUR383,000 of outstanding debt, all of which have to date been
complied with in full.
Acquisitions and disposals
With the investment market in Germany constrained by the
pandemic, acquisition activity in the first half of the financial
year was subdued. However, as confidence in the market returned,
the Company was able to capitalise on opportunities as they arose,
with four assets totalling EUR35.2 million completing and one for
EUR10.7 million notarised, with completion expected shortly after
the year end.
The assets were acquired at a blended EPRA net initial yield of
6.9% and are characterised by the opportunity they present to grow
income through the capture of reversionary potential and selective
investment into unused or underutilised space.
The Company's Titanium venture with AXA IM Alts also grew
acquisitively through the notarisation and subsequent closing
shortly after the year end, of a business park in Augsburg for
EUR79.9 million. As a result, Titanium now comprises seven assets
with EUR138.8 million of assets acquired since the joint venture
was seeded with the original portfolio of five assets at an implied
property value of EUR168.0 million.
Within the period the Company also completed the EUR10.1 million
sale of an asset in Weilimdorf which was notarised for disposal in
the prior financial year.
Full Year Results
Sirius will announce full year results for the year to 31 March
2021 on 7 June 2021, at which time there will be a conference call
for analysts and investors.
The financial information on which this trading update is based
has not been reviewed or reported on by the Company's external
auditors or a reporting accountant.
Commenting on trading over the period, Andrew Coombs, Chief
Executive Officer of Sirius Real Estate, said: "Over the past 12
months we have continued to grow Sirius, both from an operational
perspective and through the acquisition of further assets where we
see a clear opportunity to add value and increase income in the
future. The fact that we achieved our seventh year of like for like
rent roll growth of above five per cent alongside increases in many
of our key performance indicators is all the more pleasing given
the unprecedented headwinds created by the COVID-19 pandemic; it is
a real reflection of the strength of our operating platform and the
ability of our team to adapt, the quality of our assets, as well as
the diversity and resilience of our tenant base. With the worst of
the pandemic seemingly behind us and vaccinations being rolled out
across the globe, we look forward with cautious optimism."
Conference Call
There will be a conference call for analysts/investors hosted by
Andrew Coombs, Chief Executive Officer of Sirius Real Estate,
Alistair Marks, Chief Financial Officer of Sirius Real Estate and
Diarmuid Kelly, Finance Director of Sirius Facilities GmbH, at
08:30 (09:30 CET/SA time) today, Monday 12 April 2021.
Dial-in UK: +44 (0)330 336 9126
Dial-in Germany: Toll-Free: 0800 589 4609
Dial-in South Africa: Toll-Free: 0800 998 654
Participant access PIN (for all participants): 7677527
For further information:
Sirius Real Estate
Andrew Coombs, CEO / Alistair Marks, CFO
+49 (0) 30 285 010 110
FTI Consulting (Financial PR)
Richard Sunderland / Claire Turvey / James McEwan / Talia
Jessener
+44 (0) 20 3727 1000
SiriusRealEstate@fticonsulting.com
NOTES TO EDITORS
About Sirius Real Estate
Sirius is a property company listed on the main market and
premium segment of the London Stock Exchange and the main board of
the JSE Limited. It is a leading operator of branded business parks
providing conventional space and flexible workspace in Germany. The
Company's purpose is to create and manage optimal workspaces that
empower small and medium-sized businesses to grow, evolve and
thrive. Sirius seeks to unlock the potential of its people, its
properties, and the communities in which it operates, so that
together we can create sustainable impact, and long-term financial
and social value.
The Company's core strategy is the acquisition of business parks
at attractive yields, the integration of these business parks into
its network of sites under the Company's own name as well as
offering a range of branded products within those sites, and the
reconfiguration and upgrade of existing and vacant space to appeal
to the local market, through intensive asset management and
investment. The Company's strategy aims to deliver attractive
returns for shareholders by increasing rental income and improving
cost recoveries and capital values, as well as by enhancing those
returns through financing its assets on favourable terms. Once
sites are mature and net income and values have been optimised, the
Company may take the opportunity to refinance the sites to release
capital for investment in new sites or consider the disposal of
sites in order to recycle equity into assets which present greater
opportunity for the asset management skills of the Company's
team.
Sirius also has a venture with clients represented by AXA IM
Alts. Titanium was formed through the acquisition by AXA IM Alts,
on behalf of its clients, from Sirius, of a 65% stake in five
business parks across Germany. Sirius retained the remaining 35%.
The venture seeks to grow primarily through the acquisition of
larger stabilised business park assets and portfolios of assets
with strong tenant profiles and occupancy. As well as its equity
interest, Sirius acts as operator of the assets in the venture, on
a fee basis. Sirius will continue to grow its wholly owned
portfolio through acquisitions of more opportunistic assets, where
it can capitalise on its asset management expertise to maximise
utilisation of the space, grow occupancy and improve quality of the
tenants. The strategies have been clearly defined so that the
venture does not conflict with Sirius's existing business.
For more information, please visit:
www.sirius-real-estate.com
Follow us on LinkedIn at
https://www.linkedin.com/company/siriusrealestate/
Follow us on Twitter at @SiriusRE
JSE Sponsor
PSG Capital
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