Trading Update

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 €97.2 million (2020: €90.3 million)

·Seventh consecutive year of like for like rent roll growth of above 5% with a 5.2% increase to €94.3 million (2020: €89.6million)

·3.5% increase in like for like rental rate per sqm to €6.17 (2020: €5.96) with total rate increasing to €6.17 (2020: €5.98)

·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 €45.9 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 €79.9 million which completed shortly after the year end

· Total cash balance of approximately €65.5 million, of which €49.1 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 €6.17.

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 €143.8 million invoiced relating to the twelve-month period a total of €141.1 million was collected resulting in €2.7 million of outstanding debt the majority of which the Company expects to collect over time.

Total write offs in the period amounted to €151,000 whilst the Company agreed a total of 13 deferred payment plans, relating to €383,000 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 €35.2 million completing and one for €10.7 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 €79.9 million. As a result, Titanium now comprises seven assets with €138.8 million of assets acquired since the joint venture was seeded with the original portfolio of five assets at an implied property value of €168.0 million.

Within the period the Company also completed the €10.1 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: [phone]

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

[phone]

FTI Consulting  (Financial PR)

Richard Sunderland / Claire Turvey / James McEwan / Talia Jessener

[phone]

[e-mail] 

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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