REG - Sirius Real Estate - Proposed conversion of UK business to a REIT

Sirius Real EstateAnnouncement

22/03/2022 09:00

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RNS Number : 5763F  Sirius Real Estate Limited  22 March 2022

SIRIUS REAL ESTATE LIMITED

(Incorporated in Guernsey)

Company Number: 46442

JSE Share Code: SRE

LSE (GBP) Share Code: SRE

LEI: 213800NURUF5W8QSK566

ISIN Code: GG00B1W3VF54

 

22 March 2022

Sirius Real Estate Limited

("Sirius Real Estate", "Sirius" or the "Company")

 

Proposed conversion of UK business to a UK Real Estate Investment Trust
("REIT")

Sirius Real Estate, the leading owner and operator of branded business and
industrial parks providing conventional space and flexible workspace in
Germany and the UK, announces that it intends to convert its UK business to a
UK Real Estate Investment Trust ("REIT") from 1 April 2022.

The proposed REIT conversion follows the Company's UK acquisition of BizSpace
in November 2021. By entering the UK REIT regime, the Company will no longer
be subject to UK corporation tax on income or gains from its property rental
business and will be required to pay 90% or more of its UK property rental
business income to shareholders annually, as property income distributions
("PIDS"), which can be satisfied by both cash and SCRIP dividends.

Certain classes of shareholder are eligible to receive gross PIDs however in
general PIDs are paid to shareholders after the deduction of withholding tax
at the basic rate of income tax (20%). Shareholders not resident in the UK may
be entitled to claim a full or partial refund from HMRC where a treaty
dividend rate applies.

REIT conversion is not expected to affect the Company's current dividend
policy of paying out 65% of annual Funds From Operations ("FFO") and in
addition to PIDs, the Company will continue to make distributions derived from
its German operations ("non-PIDs"). Non-PIDs will be treated like "normal"
dividends paid by non-REIT companies and will not be subject to UK withholding
tax.

At the Company's next Annual General Meeting ("AGM"), scheduled for 29 July
2022, approval will be sought for the insertion of new clauses to its Articles
of Incorporation ("Articles") in line with UK REIT requirements. Further
details on the changes to the Articles and the implications of the REIT
conversion will be provided to shareholders ahead of the AGM.

Andrew Coombs, Chief Executive of Sirius Real Estate, commented: "The proposed
conversion to a UK REIT is a natural progression following the Company's
transformational acquisition of BizSpace in the UK last year, and provides
greater comparability to other UK REITs in terms of our FFO and dividend
yields for investment purposes."

 

For further information:

Sirius Real Estate

Andrew Coombs, CEO / Diamuid Kelly, CFO

+49 (0) 30 285 010 110

 

FTI Consulting (Financial PR)

Richard Sunderland / 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
(http://www.sirius-real-estate.com)

Follow us on LinkedIn at https://www.linkedin.com/company/siriusrealestate/
(https://www.linkedin.com/company/siriusrealestate/)

Follow us on Twitter at @SiriusRE

 

JSE Sponsor

PSG Capital

 

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