Trading Statement

RNS Number : 3037B

Sirius Real Estate Limited

06 October 2015

 



Sirius Real Estate Limited

("Sirius" or "the Company" or "the Group")

Trading Statement

Sirius Real Estate, the leading operator of branded business parks providing conventional space and flexible workspace in Germany, is pleased to announce the following trading statement for the six months to 30 September 2015.

This has been another active and successful period, during which trading is anticipated to be in line with market expectations. The main highlights of the period include:

·     Successful equity private placement of €50m in June 2015 to fund the acquisition of five German business parks for €57.24 million and the early refinancing of two debt facilities.

o  Four of the five business park acquisitions were completed in September 2015 and the fifth site in Aachen is expected to complete at the end of October 2015. In aggregate the five business parks will contribute €5.33 million of annual rental income (€4.7m million net operating income), with a net initial yield of 8.1%. The bank facility to be put in place against four of the five assets is progressing well and is expected to be finalised in the middle of October 2015.  The new banking terms that have been negotiated will allow the new portfolio to have an initial cash on cash yield of 14.6%, with further room for improvement from vacancy reduction.

o  In September 2015 the Company completed a new 7-year €59m debt facility with SEB AG to refinance the two existing and expensive Macquarie debt facilities. The interest on the SEB AG debt facility has been fixed at an all-in interest rate of 1.84% for the full term, which is lower than previously anticipated. This debt facility will reduce the annualised interest cost of the Company by approximately €2.6m.

·     Following the completion of Aachen, the owned portfolio will extend to 37 business parks within which there are over 360 individual buildings comprising more than 1.2 million sqm of lettable space. In addition to this the Company also manages two other properties owned by third parties.

As a result of this progress and continued success of the capital investment programme in refurbishing previously unlettable space, the Company's FFO will significantly increase in the second half of the financial year ending 31 March 2016.  The Board looks forward to providing a more detailed report on the Company's performance and outlook when it announces its half year results for the six months to 30 September 2015 at the end of November. 

Andrew Coombs, CEO of Sirius Real Estate, commented:

"We are achieving our ambitions to increase the size and profitability of the business through both organic and acquisition led activities, thereby improving shareholder returns. In the last 12 months we have completed two equity Placings and raised €90 million which we have deployed by acquiring 9 new business parks adding over 200,000 sqm to the Sirius portfolio. The new sites have all been immediately earnings accretive and have significant potential for further contribution to net asset growth and FFO.

The financial strength and trading track record of the Group is enabling the Company to negotiate significantly improved lending terms compared to those that were achievable two years ago, thereby driving down the cost of debt and reducing financing risk. The Company continues to review the opportunities that this is presenting.

Organically the Company has progressed the €10 million initiative to transform 100,000 sqm of unlettable or under-utilised space.  A key focus in this programme has been the expansion of our market leading Smartspace product where we achieve premium rents on previously unlettable or significantly under-rented space.  We expect that this will over time prove to be very significant in terms of increasing operating cash flows and dividends to shareholders and the value of our portfolio. We look forward to announcing further progress in November."

Enquiries:

Sirius Real Estate                         

Andrew Coombs, CEO                                                                          [phone]

Alistair Marks, CFO

Peel Hunt - Nomad and Joint Broker

Capel Irwin                                                                                            [phone]

Hugh Preston

PSG Capital

David Tosi                                                                                             [phone]

Willie Honeyball

Canaccord Genuity Limited - Joint Broker

Bruce Garrow                                                                                        [phone]

Chris Connors

Mark Whitmore 

Novella                                     

Tim Robertson                                                                                       [phone]             
Ben Heath    

 

END

 

 

TSTDELFBEBFLFBV