Pre Close Trading Update

RNS Number : 5567A

Sirius Real Estate Limited

21 March 2013

 



Sirius Real Estate Limited

("Sirius" or "the Company")

Pre Close Trading Update

Sirius, the real estate company with a portfolio of mixed-use business parks across Germany, providing modern, flexible workspace is pleased to announce the following trading update for its current financial year to 31 March 2013 ("the year" or "the period").

The Company has continued to trade positively and expects recurring profits* for the year to exceed market expectations.  

As previously announced, in the year under review, the completed sale of four sites and a further land package has generated proceeds of €16.3m (€17.3m since the disposal programme began) with a further €15.4m of notarised deals awaiting completion.  The cash generated from the sale of these non-core, mature assets has been predominantly used to pay down debt within the Company's facility with ABN Amro Bank (ABN).  As a result of these sales and the refinancing with Macquarie Bank announced in January, the Company's borrowings with ABN have reduced from €91.2m to €49.2m and the Company's total debt has reduced by €22.9m in the period to €272.7m (March 2012: €295.6m).

Improvements in rental income due to higher rates achieved per sqm particularly in the Company's core sites, coupled with further increases in service charge costs recovered and reductions in overhead costs are expected to offset the reductions in net operating income arising from property sales.  These improvements, together with lower bank interest following the overall reductions in debt have led to the significantly improved trading performance expected for the year.

Occupancy has remained broadly stable at 76% (77%** as at March 2012), however the average passing rent per sqm across the portfolio is expected to exceed €4.40 by the end of this month (March 2012: €4.28**).  New lettings of 117,148 sqm have been achieved at an average rate of €5.41m per sqm (2012: 118,579** sqm at €5.08** per sqm).  

In addition to the progress with reducing the ABN facility, Sirius is pleased to confirm that heads of terms have been agreed with Berlin Hannoversche Hypothekenbank AG (BerlinHyp) regarding a loan extension of the entire facility at current market rates to March 2014.  Good progress is being made on securing long-term financing for this debt and the extension with BerlinHyp will provide significant support towards achieving this goal.  It is also indicative of the strong relationship the Company has with BerlinHyp and the support they have indicated they will continue to provide Sirius.  A further announcement with the details of this facility is expected to follow shortly.

As part of the on-going long-term refinancing discussions Sirius also intends to raise up to €5 million of convertible loan notes.  Sirius will update shareholders in due course with further details. 

The Company intends to release its full year results in June 2013.

* Excluding property revaluation, change in fair value of derivative financial instruments and costs relating to the RBS extension agreement.

** Adjusted for disposals

Enquiries:

Sirius                          

Andrew Coombs, CEO                                                               [phone]

Alistair Marks, CFO

Peel Hunt

Capel Irwin                                                                                [phone]

Alex Vaughan

Cardew Group                                    

Shan Shan Willenbrock                                                              [phone] 

Georgina Hall    

 

END

 

 

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