THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES OR TO US PERSONS, AUSTRALIA, CANADA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION OR DISTRIBUTION IS UNLAWFUL.
Sirius Real Estate Limited
("Sirius Real Estate" or the "Company")
Pre-Listing Announcement
Intention to Complete a Fast Track Listing on the Alternative Exchange of the Johannesburg Stock Exchange,
Private Placement Raising €40 million and
Proposed acquisition of €76 million mixed use German property portfolio.
Sirius Real Estate, the leading operator of branded business parks providing conventional and flexible workspace to the German market, is pleased to confirm its intention to complete a fast track secondary listing on the Alternative Exchange ("ALTx") of the Johannesburg Stock Exchange ("JSE"). Alongside the listing, Sirius has raised €40 million by a private placement of 105,263,158 new ordinary shares at a price of 38 cents per ordinary share to fund, in part, the proposed acquisition of five mixed use business parks, with an all-in cost of €76 million. The balance will be funded by a new €36m facility to be provided by the Company's existing bankers.
Immediately below is the further detail on the above and at the end of this document is the full Pre-Listing Announcement as required by the JSE.
Fast track Listing
· The JSE has granted approval to Sirius for a secondary listing, by way of the fast-track listing process, of all its issued ordinary shares, including the shares issued pursuant to the placing, on the ALTx of the JSE with effect from the commencement of trading on Friday, 5 December 2014 ("Listing Date").
· Sirius will be the first company to make use of the JSE's new fast track process for companies to seek a secondary listing on the JSE.
· From 30 September 2014, a new fast track listing process was introduced by the JSE for companies seeking a secondary listing in South Africa. This new streamlined process was introduced to make it easier for companies already listed on one of four specified stock exchanges to access the South African capital markets at a lower cost by eliminating duplicate administrative requirements and to be able to do so under a much shorter timeframe than has been possible in the past.
· Sirius already has a large South African shareholder base and the listing is intended to:
o Increase liquidity and tradeability of the Company's shares;
o Raise new capital to fund, in part, the property acquisitions;
o Give existing and new South African investors a local platform to more easily invest and trade in the Company's shares;
o Provide existing and new South African investors with an opportunity to participate in the Company's income and value generation potential; and
o Further diversify the Company's shareholder base.
· Trading in Sirius shares on the JSE is expected to commence on Friday 5 December 2014.
Private Placement
· Raising €40 million through the Placing of 105,263,158 new ordinary shares ("Private Placement Shares") with new and existing shareholders at a price of 38 cents per share ("Private Placement"), representing a nil premium to the closing price on 27 November 2014 of 38 cents per share.
· 90,008,658 of the Private Placement Shares were placed with new and existing shareholders in South Africa and 15,254,500 Private Placement Shares were placed in the United Kingdom conditional on the placing agreement becoming unconditional in all respects.
· The Private Placement is to be conducted through the issue of 105,263,158 Private Placement Shares representing 20% of the Company's current issued share capital (excluding treasury shares). Application has today been made for the Private Placement Shares to be admitted to trading on the AIM market of the London Stock Exchange Plc and for the Private Placement Shares to be listed on the JSE ("Admission") and will rank pari passu in all respects with existing issued shares of the Company including the right to receive all dividends and other distributions declared after the Listing Date. The Private Placement Shares will not be eligible to receive the dividend or participate in the scrip dividend alternative in relation to the interim dividend declared in respect of the six months ending 30 September 2014.
· The Private Placement is conditional, inter alia, on Admission becoming effective.
· It is expected that Admission of the Private Placement Shares will become effective and that dealings will commence in the Private Placement Shares on 5 December 2014; at 8 a.m. (GMT) on AIM and at 9 a.m. (CAT) on ALTx. Following completion of the Private Placement, the Company will have an issued share capital of 632,257,837 shares, of which 4,981,784 are held in treasury. Therefore the total number of shares with voting rights in the Company will be 627,276,053.
Acquisition Portfolio
· Funds raised in the Private Placement together with a loan facility will be used to fund the €75.6 million (all-in cost) acquisition of 5 business parks in respect of 4 of which agreements have been reached, due diligence successfully completed but which agreements are subject to outstanding conditions precedent and formal completion and in respect of the fifth property, negotiations are ongoing ("the Acquisition Portfolio").
· A term sheet relating to a new debt facility of €36 million for 5 years with a margin of 2.5% over EURIBOR has been agreed with an existing lender to part fund the Acquisition Portfolio.
· The Acquisition Portfolio has an overall net initial yield of 8.1%, a vacancy of 17.1%, a cash on cash yield of 12.9% and a weighted average lease length remaining (WALE) of 3.9 years.
· Current recurring rental income of €6.8 million per annum and net operating income of €6.1m
· The acquisition combined with the Private Placement is expected to be 16.4% accretive to the earnings and dividend per share, whilst NAV dilution is anticipated to be only 1.5% after factoring in the uplift from the Cushman & Wakefield valuation of the Acquisition Portfolio over its total cost of acquisition.
· Total lettable area is 111,476 sqm.
· Strong locations - three on the outskirts of Berlin, one in Bonn adjacent to an existing Sirius site and one in an exciting new location for Sirius in Aachen near the Dutch and Belgian border. The portfolio is being acquired from four different vendors.
· The directors believe there is the potential for significant value creation over the next few years and that the assets are of very good quality, which should provide the Company with greater flexibility in relation to future debt refinancing.
Andrew Coombs, Chief Executive of Sirius, said, "The fact that around 40% of our shareholders were already South African based was key to our decision to seek a secondary listing on the JSE. We are pleased to have proved to be an attractive investment opportunity to South African investors and we are delighted with the support for the Private Placement and the fact that it was well over-subscribed. The significant portion of the placing taken up by these South African investors should allow for good liquidity in the shares going forward.
The option to make use of the fast track process was another important factor in deciding to go forward with the listing as it meant we could complete it quickly and cost effectively. We are delighted to have the honour of being the first Company to be fast tracked and we thank the JSE for their tremendous cooperation with Sirius.
The capital raised will support the proposed acquisition of an exciting new selection of German business parks that we have secured and offers an overall attractive net initial yield of 8.1%. In light of the excellent banking terms we have agreed, the portfolio will have an initial cash on cash yield of 12.9%. The properties fit well within our existing network and we feel confident we can add significant further value through the opportunities within the vacant and other space in the assets."
For further information:
Sirius Real Estate
Andrew Coombs, CEO +49 (0)30 285010110
Alistair Marks, CFO
Peel Hunt
Capel Irwin +44 (0)20 7418 8900
Hugh Preston
Finncap
Stuart Andrews +44 (0)20 7220 0500
Paul Harrington
Novella
Tim Robertson +44 (0)20 3151 7008
Ben Heath
PSG Capital
David Tosi +27 (0)21 887 9602
Willie Honeyball
Images of Sirius
https://www.flickr.com/photos/128710739@N05/
Company Website
Below is the Pre-Listing Announcement in full, as required by the JSE for new companies seeking a fast track secondary listing on the ALTx.
SIRIUS REAL ESTATE LIMITED
(Incorporated in Guernsey)
Company Number: 46442
Share Code: SRE
ISIN Code: ISIN GG00B1W3VF54
("Sirius" or "the Company")
After its initial public offering on AIM in 2007, with approximately €300 million of funds raised, the Company acquired 38 business parks in 2007 and 2008. The majority of these acquisitions were initially financed with five year banking facilities all of which expired in 2012 and 2013 and have subsequently been refinanced. Sirius has invested in its business parks through branding, changing use, reconfiguring and upgrading space, in particular to appeal to the German SME market, whilst retaining its key larger tenants.
Sirius was initially managed by an external vehicle owned by Sirius's founders and in January 2012 the management platform was purchased by the Company and brought in-house thereby aligning the interests of management with shareholders.
After the management internalisation, Sirius undertook a capital restructuring, including refinancing its banking arrangements. This involved (between 2012 and 2014) entering into new banking facilities, disposing of 8 business parks and a number of land packages as well as conducting two equity placements which raised in aggregate €46.5 million. Consequently, the Sirius group's ("Group") loan to value was reduced from 65% in March 2013 to 48% as at 30 September 2014. As at the same date, the new banking facilities had an average term remaining of 4.8 years.
Today Sirius owns 30 business parks throughout Germany with a combined book value of €459 million, of which one has been notarised for sale and two other non-core sites remain for sale. The Company has an adjusted net asset value, which excludes the provision for deferred tax and derivative financial instruments, of €247 million or €0.473 cents per share, a market capitalisation (at its closing price as at close of business on 27 November 2014) of approximately €198 million (representing a 19.8% discount to adjusted net asset value) and is now generating funds from operations ("FFO") of approximately €12.4 million per year (annualised for the 12 months ended 30 September 2014). The above excludes the proceeds and the effects of the Private Placement.
A summary of the key statistics of the current portfolio as at 30 September 2014 are as follows:
Business Parks |
30 |
Property Value |
€459.0m |
Net Lettable Area sqm |
1.0m |
Annual Rent (excluding ancillary income) |
€42.2m |
Average Rate m² |
€ 4.53 |
Occupancy |
76% |
Occupancy of core portfolio^ |
80% |
^ Excludes three non-core sites that will be disposed of in due course. |
The usage split by revenue of the current portfolio as at 30 September 2014 is as follows:
Office |
30% |
Industrial/Storage |
55% |
Other |
15% |
The current split of Sirius's rental income between the top 50 tenants and the flexible high-yielding tenants, as at 30 September 2014, is as follows:
|
No. of Tenants |
Occupied sqm |
Annual Rent |
% Total |
Rate Per sqm |
Top 50 Tenants |
50 |
477,245 |
€25,595,217 |
61% |
€4.47 |
SmartSpace Tenants |
949 |
34,615 |
€2,498,157 |
6% |
€6.01 |
Other Tenants |
1,429 |
264,230 |
€14,060,747 |
33% |
€4.43 |
Total |
2,428 |
776,091 |
€42,154,121 |
100% |
€4.53 |
The current split of income between usage, as at 30 September 2014, is as follows:
|
Total Available Sq Mt |
Occupied Sq Mt |
Occupancy % |
Annual Rent |
% Total |
Rate Per Sq Mt |
Office |
221,158 |
169,525 |
76.65% |
€11,311,145 |
27% |
€5.56 |
Storage/Production |
635,883 |
496,330 |
78.05% |
€22,241,204 |
53% |
€3.73 |
SmartSpace |
69,317 |
34,615 |
49.94% |
€2,498,157 |
6% |
€6.01 |
Other |
92,634 |
75,621 |
81.63% |
€4,338,899 |
10% |
€4.78 |
Non Occupancy Related |
- |
- |
- |
€1,764,716 |
4% |
- |
Total |
1,018,992 |
776,091 |
76.16% |
€42,154,121 |
100% |
€4.53 |
8. DIVIDEND POLICY
The Company has adopted a policy of paying 65% of FFO in each financial year as a cash dividend with a scrip alternative. The dividend is paid on a semi-annual basis. The dividend declared for the six months ending 30 September 2014 was €0.77 cents per share.
The Company was incorporated under the Companies (Guernsey) Law 1994, as amended, under number 46442 on 20 February 2007, with its registered address situated at PO Box 119, Martello Court, Admiral Park, St Peter Port, Guernsey GY1 3HB, Channel Islands. The Company is not registered as an external company in South Africa. Following its management internalisation and corporate restructuring, Sirius confirmed with the Guernsey Financial Services Commission ("GFSC") that it no longer required registration as an authorised collective investment scheme. At the Company's request the GFSC withdrew its registration with effect from 17 June 2014.
The Company has its financial year-end at 31 March.
The Company has appointed Computershare Investor Services Proprietary Limited (Registration Number 2004/003647/07) as its transfer secretaries in South Africa with its main place of business at Ground Floor, 70 Marshall Street, Johannesburg, 2001. The Company has appointed Capita Asset Services (a trading name of Capita Registrars Limited) (Registration Number 2605568) as its Registrar in the United Kingdom with its main place of business at The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU, United Kingdom.
|
Number of shares |
Authorised share capital |
|
Ordinary shares of no par value |
Unlimited |
|
|
Issued and fully paid |
|
Issued ordinary shares |
522,012,895 |
Issued ordinary shares held in treasury |
4,981,784 |
|
526,994,679 |
|
Number of shares |
Authorised share capital |
|
Ordinary shares of no par |
Unlimited |
|
|
Issued and fully paid |
|
Issued ordinary shares |
627,276,053 |
Issued ordinary shares held in treasury |
4,981,784 |
|
632,257,837 |
|
(Unaudited) six months ended 30 September 2014 €000 |
(Unaudited) six months ended 30 September 2013 €000 |
(Audited) twelve months ended 31 March 2014 €000 |
Earnings |
|
|
|
Basic earnings |
12,637 |
10,283 |
28,927 |
Diluted earnings |
12,762 |
10,283 |
29,184 |
|
|
|
|
Headline |
|
|
|
Basic earnings |
12,637 |
10,283 |
28,927 |
Add back revaluation surplus, net of related tax |
(9,212) |
(4,679) |
(21,171) |
Add back (gain)/loss on sale of properties |
(1,084) |
336 |
1,687 |
Headline earnings |
2,341 |
5,940 |
9,443 |
Add back change in fair value of derivative financial instruments |
2,567 |
(81) |
128 |
Add back non-recurring items |
(49) |
852 |
1,235 |
Adjusted earnings |
4,859 |
6,711 |
10,806 |
Number of shares |
|
|
|
Weighted average number of ordinary shares for the purpose of basic earnings per share |
520,244,292 |
328,708,966 |
395,758,526 |
Weighted average number of ordinary shares for the purpose of diluted earnings per share |
541,077,625 |
349,542,300 |
416,591,859 |
Weighted average number of ordinary shares for the purpose of headline and adjusted earnings per share |
520,244,292 |
328,708,966 |
395,758,526 |
Basic earnings per share |
2.43c |
3.13c |
7.31c |
Diluted earnings per share |
2.36c |
2.98c |
7.01c |
Headline earnings per share |
0.45c |
1.81c |
2.39c |
Diluted headline earnings per share |
0.46c |
1.74c |
2.30c |
Adjusted earnings per share |
0.93c |
2.04c |
2.73c |
The number of shares has been adjusted for the 4,919,284 shares held by the Company as Treasury Shares.
In addition to costs for the migration of the Company's tax domicile from Guernsey to the UK (€124k), land tax charges for prior years (€88k) and fees associated with refinancing (€14k), the non-recurring items include costs for shares issued under the long-term incentive scheme (€227k) and interest income received from prior years (€502k). The directors have chosen to disclose adjusted earnings per share in order to provide a better indication of the Group's underlying business performance; accordingly, it excludes the effect of non-recurring items, deferred tax and revaluation surpluses and deficits on investment properties and derivative instruments.
Set out below is the net assets per share of Sirius as at 30 September 2014 and at 31 March 2014:
|
(Unaudited) 30 September 2014 €000 |
(Unaudited) 30 September 2013 €000 |
(Audited) 31 March 2014 €000 |
Net assets |
|
|
|
Net assets for the purpose of assets per share (assets attributable to the equity holders of the Parent) |
238,123 |
167,936 |
226,280 |
Deferred tax arising on revaluation of properties |
6,566 |
3,172 |
4,200 |
Derivative financial instruments |
2,228 |
116 |
(504) |
Adjusted net assets attributable to equity holders of the Parent |
246,917 |
171,224 |
229,976 |
Number of shares |
|
|
|
Number of ordinary shares for the purpose of net assets per share |
522,075,395 |
349,750,547 |
518,900,307 |
Net assets per share |
45.61c |
48.02c |
43.61c |
Adjusted net assets per share |
47.30c |
48.96c |
44.32c |
The number of shares has been adjusted for the 4,919,284 shares held by the Company as Treasury Shares.
Save as disclosed in the half year results for the six months ending 30 September 2014, any shares which are required to be issued pursuant to the scrip dividend alternative in respect of the interim dividend declared in respect of the six months ending 30 September 2014, the 1,575,641 shares issued pursuant to the scrip dividend alternative in respect of the final dividend for the financial year ended 31 March 2014 and the Private Placement, no significant change in the financial or trading position of Sirius has occurred since 31 March 2014, the end of the last financial period for which audited financial statements of the Company have been published.
Full name
|
Age |
Capacity |
Business Address
|
Andrew James Coombs |
49 |
Chief executive officer |
Lennestr 3, Berlin 10785, Germany |
Alistair Brian Marks |
45 |
Chief financial officer |
Lennestr 3, Berlin 10785, Germany |
Robert Archibald Gilchrist Sinclair
|
65 |
Non-executive chairman |
Trafalgar Court |
Rolf Elgeti |
38 |
Non-executive director |
Obotritia Capital KGaA Foersterweg 2 14482 Potsdam
|
Wessel Johannes Hamman |
41 |
Non-executive director |
26 Throgmorton Street, London, United Kingdom, EC2N 2AN |
Andrew James Peggie |
44 |
Non-executive director |
63 Grosvenor Street, London W1K 3JG |
The following shareholders will, directly or indirectly, beneficially hold more than 5% of the issued share capital of the Company on the Listing Date:
Shareholder |
Number of shares |
% of the issued share capital |
Karoo Investment Fund |
128,611,451 |
20.5% |
Premier Fund Managers Ltd |
49,493,547 |
7.9% |
Taube Hodson Stonex Partners |
38,133,473 |
6.1% |
Total |
216,238,471 |
34.47% |
Note: Excluding treasury shares
Results of the Private Placement released on SENS on |
Friday, 28 November 2014 |
Publication of the pre-listing announcement |
Friday, 28 November 2014 |
Notification of allotments on |
Monday, 1 December 2014 |
Anticipated listing date on the AltX |
Friday, 5 December 2014 |
Accounts at CSDPs or brokers updated and CREST accounts credited in respect of the Private Placement Shares at the commencement of trade on the AltX and on AIM |
Friday, 5 December 2014 |
Note: The above times and dates are subject to change. Any such change will be notified on SENS. |
Guernsey
28 November 2014
Transaction adviser, sole bookrunner and sponsor in relation to the listing on AltX and the Private Placement in South Africa: PSG Capital (Pty) Ltd
Sole bookrunner and nomad in relation to the AIM Rules and private placing in the UK: Peel Hunt
Legal Adviser as to English and South African law: Norton Rose Fulbright
Peel Hunt LLP ("Peel Hunt") which is authorised and regulated in the United Kingdom by the FCA, is acting solely for the Company in relation to the Private Placement and no one else and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Peel Hunt nor for providing advice in relation to the Private Placement or any other matter referred to in this announcement.
This announcement is for information purposes only and does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any Private Placement Shares in the United States or to US Persons (as such term is defined in the US Securities Act 1933, as amended (the "Securities Act"), Australia, Canada, South Africa or Japan or any jurisdiction in which such offer or solicitation would be unlawful. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdictions. The Private Placement Shares have not been and will not be registered under the Securities Act and may not be offered, sold or transferred, directly or indirectly, within the United States or to US Persons unless registered under the Securities Act except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the securities laws of any state or other jurisdiction of the United States. No public offering of the Private Placement Shares referred to in this announcement is being made in the United States, Australia, Canada, or Japan or any jurisdiction in which such public offering would be unlawful. No public offering of shares referred to in this announcement is being made in the United States, the United Kingdom or elsewhere.
The information in this press release may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution, reproduction, or disclosure of this information in whole or in part is unauthorised. Failure to comply with this directive may result in a violation of the Securities Act or the applicable laws of other jurisdictions.
This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will", or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include matters that are not historical facts. They appear in a number of places throughout this announcement and include statements regarding the current intentions, beliefs or expectations of the directors ("Directors") of the Company concerning, among other things, the Company's results of operations, financial condition, liquidity, prospects, growth, strategies and the Company's markets. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Actual results and developments could differ materially from those expressed or implied by the forward-looking statements. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements in this announcement are based on certain factors and assumptions, including the directors' current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company's operations, results of operations, growth strategy and liquidity. Whilst the directors consider these assumptions to be reasonable based upon information currently available, they may prove to be incorrect. Save as required by law or by the AIM Rules or the rules of the JSE, the Company undertakes no obligation to publicly release the results of any revisions to any forward-looking statements in this announcement that may occur due to any change in the directors' expectations or to reflect events or circumstances after the date of this announcement. Past performance cannot be relied on as a guide to future performance.
This announcement has been issued by and is the sole responsibility of the Company. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Peel Hunt or by any of their affiliates or agents as to, or in relation to, the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed. Neither Peel Hunt nor any of their affiliates or agents shall have any obligation to update this announcement or any additional information or to correct any inaccuracies in it which may become apparent.
The contents of this announcement are not to be construed as legal, financial or tax advice. If necessary, each recipient of this announcement should consult his, her or its own authorised legal adviser, financial adviser or tax adviser for legal, financial or tax advice. Each placee should consult with its own advisers as to legal, tax, business and related aspects of an acquisition of the Private Placement Shares, as the case may be. This announcement contains no recommendation or guidance as to whether the acquisition of the Private Placement Shares is appropriate to the particular objectives, financial situation or particular needs of any placee or subscriber.
This announcement is directed only at: (a) persons in member states of the European Economic Area who are 'Qualified Investors' within the meaning of article 2(1)(e) of the Prospectus Directive (which means Directive 2003/71/EC and includes any relevant implementing measure in any member state); (b) persons in the United Kingdom, who (i) have professional experience in matters relating to investments falling within article 19(5) ("Investment professionals") of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); (ii) are persons falling within article 49(2)(a) to (d) ("High net worth companies, unincorporated associations, etc.") of the Order; or (iii) are persons to whom it may otherwise be lawfully communicated; (c) persons in South Africa, who fall within the categories of persons set out in section 96(1)(a) and section 96(1)(b) of the Companies Act, 2008, including but not limited to (i) persons whose ordinary business, or part of whose ordinary business, is to deal in securities; (ii) persons who are regulated by the South African Reserve Bank; (iii) financial services providers licensed under the Financial Advisory and Intermediary Services Act, 2002; or (iv) financial institutions as defined in the Financial Services Board Act, 1990 or (v) persons who subscribe for a minimum amount of R1 000 000 per single addressee acting as principal, (all such persons in (a) (b) and (c) together being referred to as "Relevant Persons"). This announcement must not be acted on or relied on by persons who are not Relevant Persons.