REG - Sirius Real Estate - Results for the year ended 31 March 2024
03/06/2024 07:00
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RNS Number : 7493Q Sirius Real Estate Limited 03 June 2024
SIRIUS REAL ESTATE LIMITED
(Incorporated in Guernsey)
Company Number: 46442
JSE Share Code: SRE
LSE (GBP) Share Code: SRE
LEI: 213800NURUF5W8QSK566
ISIN Code: GG00B1W3VF54
3 June 2024
Sirius Real Estate Limited
("Sirius Real Estate", "Sirius", the "Group" or the "Company")
Results for the year ended 31 March 2024
Continued sustainable FFO growth with strong operational performance driving
tenth year of increasing dividends
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 its consolidated financial results for the year
to 31 March 2024.
Operating platform continues to drive rental and FFO growth
· 7.9% increase in Funds from Operations ("FFO") to €110.2m (2023:
€102.1m and a 14.6% increase in adjusted profit before tax to €110.0m
(2023: €96.0m).
· 7.2%* like for like rent roll growth to €188.7m* (2023:
€176.0m*) driven by continued strong organic growth and occupier demand in
Germany and the UK
· Profit before tax increased 32.4% to €115.2m (2023: €87.0m)
primarily as a result of €12.4m valuation gain in 2024 compared to a €9.8m
deficit in the previous financial year.
· 2.4% increase in FFO per share to 8.95c (2023: 8.74c)
· 8.7% increase of EPRA EPS to 8.21c (2023: 7.55c)
Sustainable FFO growth supports 20(th) progressive dividend payout
· Progressive H2 dividend of 3.05c per share (2023: 2.98c per share),
amounting to a 6.5% uplift in the total dividend for the financial year to
6.05c (2023: 5.68c)
Income driven valuation gains
· Investment properties valued** at €2,210.6m (2023: €2,123.0m)
· €12.4m net portfolio valuation increase in spite of valuation
yield expansion
· Portfolio gross yield of 7.5% in Germany (2023: 7.3%) with a net
yield of 6.8% (2023: 6.5%) alongside a 14.1% gross yield (2023: 13.2%) and a
net yield of 9.9% (2023: 9.3%) in the UK, on a like for like basis
· EPRA NTA per share increasing by 1.6% to 109.82c (2023: 108.11c)
demonstrating the resilience of the portfolio
· Adjusted NAV per share increased by 1.8% to 111.12c (2023: 109.21c)
Significant market opportunity captured with €157.8m of acquisitions and
€59.7m of disposals, at a premium to book value, supported by €165.3m
equity raise
· Net of costs, the Company notarised or completed six UK
acquisitions amounting to £90.0m (€104.2m) contributing an annualised NOI
of £8.7m (€10.1m) at an average gross yield of 9.5% and 81.1% occupancy. In
Germany, the Company notarised or completed €53.6m of acquisitions across
three transactions at an average gross yield of 10.2% and 91% occupancy,
fuelling future rental growth
· €56.2m of disposals in Germany with annualised NOI of €3.4m and
limited further growth opportunity completed across three transactions and one
£3.0m (€3.5m) disposal in the UK with an annualised NOI of £0.2m
(€0.2m), all at premium to book value
Strong balance sheet with capacity for acquisitions and only 2.9% of total
debt expiring within next 2 years
· Cash at bank of €214.5m, providing capacity for further
acquisitions and investment (2023: €99.2m)
· 33.9% net LTV (March 2023: 41.6%) and Net Debt to EBITDA of 5.6x
· Successful issuance of €59.9m bonds post balance sheet, via a tap
issue of its €300m 1.75% notes due in 2028
· €170.0m facility with Berlin Hyp AG and €58.3m Deutsche
Pfandbriefbank facility have been refinanced to 2030 at 4.26% and 4.25%
respectively
Outlook
· The Company is trading in line with management expectations in the
new financial year
· Sirius continues to assess further growth options in both Germany
and the UK on an opportunistic basis, including recycling of mature assets and
reinvesting in value-add opportunities
· Organic growth opportunities remain strong in both markets
Commenting on the results, Andrew Coombs, Chief Executive Officer of Sirius
Real Estate, said:
"Sirius has delivered another very positive set of annual results, with a
strong operational performance driving FFO, valuation and dividend growth in
what represents our tenth year of annualised rental growth above 5% and
dividend increases. This is testament to our platform's ability to drive
substantial organic growth, which is underpinned by continued occupier demand
for our high-quality and affordable products despite macro headwinds.
"Following our oversubscribed equity fundraising of €165.3 million in
November 2023, we have rapidly executed on our pipeline of attractive asset
acquisitions in both Germany and the UK, taking advantage of market conditions
with c. €160 million of assets bought in the past six months. At the same
time, we have maintained a healthy net LTV ratio and have recycled capital
with c. €60 million of disposals completed at a premium to book value,
highlighting the business' ability to crystallise returns from our mature
assets and to drive value where we see strategic market opportunities.
"Looking ahead, our outlook remains positive: our active asset recycling
programme, strong cash position and post balance sheet issuance of €59.9
million of debt means our balance sheet is in rude health. There remain many
levers we can pull to unlock value and grow occupancy and rental income within
our current portfolio through our successful asset management programme, and
we remain well positioned to fuel our accretive pipeline, supporting our next
phase of growth and deliver attractive returns for shareholders."
Notes:
*Group rent roll and rental income KPI's have been translated utilising a
constant foreign currency exchange rate of GBP:EUR 1.1695, being the closing
exchange rate as at 31 March 2024.
** Including leased investment properties
WEBCAST
There will be an in-person presentation for analysts/investors at 09:00 BST
(10:00 CET/ SAST) today, hosted by Andrew Coombs, Chief Executive Officer, and
Chris Bowman, Chief Financial Officer, at Berenberg's offices Located at 60
Threadneedle St, London, EC2R 8HP
There will also be a live webcast available, which can be accessed via the
following link:
Webcast link:
https://stream.brrmedia.co.uk/broadcast/6613b3c40ca2a2be77897aff
For further information:
Sirius Real Estate
Andrew Coombs, CEO / Chris Bowman, CFO
+49 (0) 30 285 010 110
FTI Consulting (Financial PR)
Richard Sunderland / Ellie Sweeney / James McEwan / Talia Shirion
+44 (0) 20 3727 1000
SiriusRealEstate@fticonsulting.com
NOTES TO EDITORS
About Sirius Real Estate
Sirius is a property company listed on the main and premium market of the
London Stock Exchange and the main board of the JSE Limited. It is a leading
owner and operator of branded business and industrial parks providing
conventional space and flexible workspace in Germany and the U.K. As of 30
September 2023, the Group's portfolio comprised 139 assets let to 9,248
tenants with a total book value of over €2 billion, generating a total
annualised rent roll of €184.2 million. Sirius also holds a 35% stake in
Titanium, its €350+ million German-focused joint venture with clients of AXA
IM Alts.
The Company's strategy centres on acquiring business parks at attractive
yields and integrating them into its network of sites - both under the Sirius
and BizSpace names and alongside a range of branded products. The business
then seeks to reconfigure and upgrade existing and vacant space to appeal to
the local market via intensive asset management and investment and may then
choose to refinance or dispose of assets selectively once they meet maturity,
to release capital for new investment. This active approach allows the Company
to generate attractive returns for shareholders through growing rental income,
improving cost recoveries and capital values, and enhancing returns through
securing efficient financing terms.
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
LEI: 213800NURUF5W8QSK566
JSE Sponsor: PSG Capital
Chairman's Statement
Continued growth in challenging conditions
I am pleased to be writing this as part of my sixth Annual Report as Chairman,
and doubly pleased to be able to share another year of strong financial and
operational performance despite a backdrop of continuing macroeconomic and
geopolitical volatility.
Sirius would like to thank shareholders for their continued support,
highlighted by our €165.3m capital raise in November 2023 to enable the
Company to take advantage of a pipeline of compelling opportunities both in
Germany and in the UK. The Company has invested the capital raise proceeds in
a range of assets in Germany and the UK which we are excited about the future
prospects for, we believe such acquisitions will contribute to our growth in
future years. In the UK, we have acquired our largest asset since acquiring
BizSpace in November 2021, the £50.1m (€58.6m) Vantage Point business park
in Gloucestershire, UK. We believe further compelling acquisition
opportunities will arise in the coming year.
The asset recycling programme continued on pace, with the Company recycling
€60 million of non-core or mature assets in the period, demonstrating the
power of our operating platform to transform these assets into attractive sale
opportunities.
As the Group sets its sights on our next FFO milestone of €150m, the Group
continues to deliver on its ambition by capturing rent roll growth in both
Germany and the United Kingdom whilst maintaining a robust balance sheet. The
Board has authorised a progressive dividend of 3.05c per share for the second
half of the financial year, increasing on the 2.98c per share dividend for the
equivalent period in the prior year. This brings the total dividend for the
year to 6.05c, an increase of 6.5% on the 5.68c dividend for the year ended 31
March 2023.
Our sustainability agenda
We are proud of the progress we continue to make in our work to build a
sustainable future. Challenges remain in our sector and our Chief Executive
Officer, Andrew Coombs, continues to be responsible for chairing the Sirius
Real Estate Sustainability and Ethics Committee. We are also pleased to have
launched a dedicated team, based in Berlin to work with our Chief Impact
Officer, Kremena Wissel as additional operational resource, to help manage and
execute our sustainability agenda across the Group. We have set out in our ESG
report a roadmap for the future and look forward to updating shareholders on
our progress in this area.
Looking ahead
There are a number of headwinds on the horizon that will challenge Sirius in
the coming years, most notably the higher interest rate environment,
continuing broader geopolitical uncertainty and the uncertainty over German
and UK future economic growth. We remain alert in assessing these risks, and
the impact they will have on our business, and take confidence from our strong
track record of adapting and thriving in the face of other significant
external challenges in recent years.
Overall, we are confident that the strength of our operating platform, balance
sheet, our experienced management team and our long-term strategic view will
enable our business to continue its growth journey in the years ahead. Sirius
is well run and adaptive and continues to be a highly investible proposition.
Thank you
On behalf of the Board, I would like to express my gratitude to everyone
across Sirius for their contributions to our successes in this financial year.
I look forward to the coming financial year with confidence in our team, our
business model and our ambition as we build on our strong foundations.
Daniel Kitchen
Chairman
31 May 2024
Asset management review
Introduction
After a period of modest investment activity in the prior year in which the
Company focused almost entirely on organic growth, the Company returned to
acquisitive growth after its oversubscribed equity fundraising of €165.3m in
November 2023. €157.8m of assets (excluding acquisition costs) have been
notarised or acquired since the capital raise, capturing buying opportunity in
the market. In addition to filling its acquisition pipeline, the Company has
been successful in recycling some of its mature or non-core assets at or above
book value in the period.
The rent roll growth achieved demonstrates that even with the Company's
acquisition activity it has the management bandwidth to also deliver strong
organic growth, focused on capturing rate, occupancy and targeted capex.
Success has been achieved on all fronts with substantial like-for-like rental
income increases in both the UK and Germany, as well as total shareholder
returns including NAV growth, which has seen modest improvement over the
previous period. Through its extensive asset management activities,
opportunistic acquisitions and continued success in its asset recycling, the
Company maintains a solid foundation to provide excellent risk-adjusted
returns for its stakeholders.
Asset Management - Group Highlights
Key Highlights:
Metric 31 March 2024 31 March 2023 Variance Variance %
Total annualised rent roll* (€ m) 194.7 179.9 14.8 8.2
Like-for-like annualised rent roll* (€ m) 188.7 176.0 12.7 7.2
Average rate (€) per sqm* 8.82 8.18 0.64 7.8
Average rate (€) per sqm like for like* 8.68 8.25 0.43 5.2
Total occupancy (%) 85.5 83.9 1.6 1.9
Like for like occupancy (%) 85.5 83.9 1.6 1.9
Cash in bank (€ m) 214.5 99.2 115.3 116.2
Cash collection (%) 98.2 98.6 (0.4) (0.4)
*The Company has chosen to disclose certain Group rental income figures
utilising a constant foreign currency exchange rate of GBP:EUR 1.1695, being
the closing exchange rate as at 31 March 2024.
Platform drives occupancy growth across both markets
A key focus over the past twelve months has been to drive occupancy across
both markets, with success noted in both Germany and the UK, albeit with
Germany improving slightly better than the UK. Rates continued to capture
inflation; however, due to inflation falling significantly off its recent
highs, this increase has been less pronounced than in the prior period.
Nevertheless, like-for-like annualised rent roll increased by 7.1% (31 March
2023: 7.3%) in Germany and 7.5% (31 March 2023: 8.7%) in the UK, which blends
to 7.2*% (31 March 2023: 7.7*%) at Group level. This represents the tenth
consecutive year of like-for-like rent roll growth in excess of 5%. These
increases were supported by the Group growing its like-for-like occupancy by
1.6% to 85.5% (31 March 2023: 83.9%).
Cash collection across the Group remained robust at 98.2% (31 March 2023:
98.6%), with cash on hand at the end of the year of €214.5m. The Company
repaid debt of €20m in the year, resulting in a total debt balance of
€955.3m and a net LTV of 33.9%, ensuring the Company is well within its 40%
net LTV target. With a weighted average debt expiry of four years, the Company
remains poised to capture further opportunity from its cash on hand but also
from the vacancy within its existing portfolio.
Asset Management - Germany
Key Highlights:
Metric 31 March 2024 31 March 2023 Variance Variance %
Total annualised rent roll (€ m) 129.7 123.1 6.6 5.4
Like-for-like annualised rent roll (€ m) 128.0 119.5 8.5 7.1
Average rate (€) per sqm 7.24 6.86 0.38 5.5
Average rate (€) per sqm like for like 7.23 6.90 0.33 4.8
Total occupancy (%) 85.2 83.4 1.9 2.2
Like for like occupancy (%) 85.2 83.3 1.9 2.3
Cash collection (%) 98.0 98.4 (0.4) (0.4)
Lettings and rental growth
The German portfolio recorded a like-for-like increase in its annualised rent
roll of 7.1% to €128.0m (31 March 2023: €119.5m) whilst the total
annualised rent roll increased in the year end by 5.4% to €129.7m (31 March
2023: €123.1m). Of this growth, €8.5m related to organic growth, €3.6m
was lost from disposals and €1.7m represented the impact from acquisitions.
The €8.5m organic growth was made up of €4.2m coming from uplifts from
existing tenants, either through contractual lease indexation or increases
upon renewal, as well as €4.3m from the net of move-ins over move-outs, an
increase of €2.4m over the prior period. The latter can be further broken
down into move-outs of 137,992 sqm that were generating €13.6m of annualised
rent roll at an average rate of €8.20 per sqm being offset by move-ins of
169,176 sqm generating €17.9m of annualised rent roll at an average rate of
€8.81 per sqm. The combination of the above has resulted in like-for-like
rate per sqm increasing by 4.8% to €7.23 (31 March 2023: €6.90),
demonstrating the ability of the Company's operating platform to manage the
product mix and occupancy carefully alongside rates, to optimise the returns
from our lettable space.
Through the Company's continued investment in its sub-optimal vacant space
through its capex investment programme and its ability to let this space,
like-for-like occupancy in Germany has increased by 1.9% to 85.2% (31 March
2023: 83.3%).
The movement in annualised rent roll is illustrated in the table below:
€m
Annualised rent roll 31 March 2023 123.1
Move-outs (13.6)
Move-ins 17.9
Contracted uplifts 4.2
Disposals (3.6)
Acquisitions 1.7
Annualised rent roll 31 March 2024 129.7
The ability to organically grow and generate net positive move-ins at higher
rates is supported by the Company's in-house marketing platform, which permits
the Company to strategically target the markets in which it operates and react
to changing market dynamics rapidly. Enquires for the year of 15,880 were
comparable to the 15,412 generated in the period ended 31 March 2023. These
enquiries were converted at a rate of 14% (31 March 2023: 12%) to 164,629 sqm
in sales, which has been a consistent year-on-year performance across the
German portfolio.
The ability to sell space is key to success, yet tenant retention is also a
major contributing factor to maintaining strong rent roll performance. The
Company notes large move-outs in the normal course of business, yet the
retention rate has improved to 79% (31 March 2023: 75%). Overall, the
continued positive performance in marketing, lettings and renewals provides a
clear demonstration of the ability of the Company to grow against the backdrop
of evolving market dynamics, which included the ongoing conflict in Ukraine,
the energy crisis in Germany and resulting inflationary pressures, which have
eased off their peaks back to more manageable levels.
Cash collection
The Company continued its trend of strong cash collection performance in the
period. Sirius is very focused on cash collection and the advantage of its
substantial operating platform is very evident here. The experienced cash
collection team, combined with the on-site staff who have established strong
relationships with our top tenants, has been key to keeping cash collection
rates steady at 98.0% (31 March 2023: 98.4%), even though total billings (net
of VAT) increased by 7.5% to €196.3m from €182.6m in 31 March 2023. This
demonstrates the resilience of Sirius' tenant base and strength of the
Company's cash collection initiatives.
As at year end, uncollected debt amounted to €3.9m (31 March 2023: 2.9m)
which mainly related to recently billed service charge and repair and
maintenance balancing for prior years. The outstanding rent and service
charge prepayments were €3.1m and €0.8m respectively. During the period,
the Company wrote off €0.2m (31 March 2023: €0.1m). The Company expects to
collect most of the outstanding debt for the period over the next twelve
months through its regular debt collection activities.
Asset recycling
Recycling equity from mature assets into new value-add acquisitions has always
been a significant part of the Sirius business model. It benefits the Company
in many ways, including: a) proving that valuations can be crystallised; b)
replenishing the growth opportunity within the vacancy and the capex
investment programme; and c) being accretive to FFO per share (and therefore
dividend per share), with a consequent contribution to NAV per share growth.
This is an element of the Company's strategy which Sirius is able to execute
effectively throughout the property cycle and this has been evidenced by the
Company's continued asset recycling initiatives.
On the back of the equity raised in November 2023, the Company executed on an
acquisition pipeline comprising three industrial assets in Germany in the
first half of the 2024 calendar year, whilst also continuing its asset
recycling programme with the sale of its principal Maintal I asset.
A summary of the acquisitions and disposals that completed or were notarised
in the year is detailed in the table below:
Acquisitions
Date Total Total Annualised Annualised Occupancy Gross yield*
Investment* acquired rental NOI
€m sqm income €m
€m
Köln (Cologne) Mar 24 21.5 19,114 1.7 1.6 89% 7.8%
Göppingen Apr 24 21.4 35,132 1.8 1.5 87% 8.3%
Klipphausen Apr 24 14.6 17,683 2.4 2.4 100% 16.4%
Total 57.5 71,929 5.9 5.5 91% 10.2%
* Includes purchaser costs.
A summary of the opportunities and characteristics of each asset acquired in
the period is detailed below.
· The business park in Köln, Germany's fourth largest city, in
Nord-Rhein Westphalia, comprises 19,114 sqm of principally light industrial
space. The property has been acquired at a price of €20.0m (net of costs)
and currently generates total rental income of €1.67m and an annualised net
operating income of €1.56m, representing a gross yield at acquisition of
7.8% and an EPRA net initial yield of 7.3%. The site has an occupancy rate of
just over 89%, with a weighted average unexpired lease term ("WAULT ") of 2.4
years and a well-diversified, stable tenant structure. The park offers a
number of strong value-add opportunities to drive rental growth, including
accessible under-renting which Sirius has identified. The Company is well
established with its three additional parks in the area, expecting to leverage
its deep market knowledge into the latest addition.
· Göppingen, a city in the state of Baden-Württemberg, south-east
of Stuttgart in southern Germany, is a multi-tenanted business park with a
total lettable area of approximately 35,132 sqm comprised of 31,700 sqm of
industrial space, 3,100 sqm of office space and 332 sqm of space defined as
"other" which in aggregate will initially generate around €1.8m of
annualised rental income at 87% occupancy. The acquisition has been notarised
at €19.8m (net of costs) and generates an annualised net operating income of
€1.5m, reflecting a gross yield of 8.3% and an EPRA net initial yield of
6.9%. With occupancy at around 87% and a WAULT of 2.8 years, the property
offers the opportunity for Sirius to use its platform to improve occupancy,
income and service charge recovery. The Göppingen asset will be the tenth
asset the Company owns in the desirable Stuttgart area.
· Klipphausen, built in 2009 and located near Dresden, the capital of
Saxony known as "Silicon Saxony", is a highly desirable economic
micro-location. The Company expects to benefit from some operational synergies
due to the proximity of the site to its existing Dresden assets. The site
has been purchased from a owner occupier who plans to vacate the building
approximately six months after completion. The plan is to convert the site,
which currently comprises approximately 17,700 sqm of modern primarily light
industrial and production space, into a multi-tenanted business park. Sirius'
asset management platform has identified multiple parties interested in
leasing space at the site, which in aggregate are already in excess of the
site's entire leasable area. Longer term, the plan is also to expand the park
through the development of the adjacent 10,000 sqm land parcel which forms
part of the acquisition.
In addition to the above, the Company purchased an adjacent building in its
existing Dresden asset for €1.0m under its "Buy Your Neighbour" campaign, to
strategically expand its existing footprint on the site.
The marketing and sales capabilities within the operating platform are part of
several asset management disciplines that provide the Company with a
significant competitive advantage over other owners of light industrial and
business park assets in Germany. This allows Sirius to be more flexible with
how it configures and offers its vacant space which should result in the
Company being able to more easily fill up and transform these newly acquired
sites and hence make the high returns at the asset level which underpins the
Company's significant organic growth it generates each year.
Disposals
Date Total Total Annualised Annualised Occupancy Gross yield
sales price disposal rental NOI
€m sqm income €m
€m
Wuppertal Apr 23 8.8 15,006 0.7 0.7 79% 8.0%
Kassel Oct 23 7.3 8,341 0.5 0.4 92% 7.1%
Maintal I Mar 24 40.1 37,851 2.4 2.3 83% 6.0%
Total 56.2 61,198 3.6 3.4 83% 6.4%
Over the last twelve months, the Group sold three assets in Germany for a
total sales price of €56.2 m representing a 6.4% gross yield. The Maintal
asset was sold at 6% above book value to a data centre developer whilst the
Kassel and Wuppertal assets were sold at a premium to book value of 5%, at the
time of notarisation. These disposals of mature and non-core assets a
consistent premium to book value demonstrate the Company's ability to continue
to recycle its assets well, underpinning the effectiveness of its business
model.
Capex investment programmes
The Group's capex investment programme on the German assets has historically
been focused on the transformation of poor-quality vacant space that is
typically acquired at very low cost due to it being considered as structural
vacancy by former owners. The transformation and take up of this space has not
only resulted in significant income and valuation improvements for the Company
but have also yielded significant improvements in service charge cost recovery
and therefore further increased net operating income. The programme started in
2015 and to date 445,864 sqm of space has been fully transformed for an
investment of €70.9m. As at 31 March 2024, this space was generating
€29.4m in annualised rent roll (at 73% occupancy). This transformed space
has also been a major contributor towards the large valuation increases seen
on the portfolio over the last eight years.
In addition to the space that has been completed and let or is currently being
marketed, a total of approximately 19,773 sqm of space is either in progress
of being transformed or is awaiting approval to commence transformation. A
further €4.6m is expected to be invested into this space, and, based on
achieving budgeted occupancy, is expected to generate incremental annualised
rent roll in the region of €1.9m.
The details of the capex investment programme on this vacant space is detailed
below:
Combined capex programmes Sqm Investment Actual Annualised Annualised Occupancy Occupancy Rate Rate
budgeted spend rent roll * rent roll * budgeted achieved to per sqm per sqm
€m €m increase increase % March 2024 budgeted achieved to
budgeted achieved to % € March 2024
€m March 2024 €
€m
Completed 445,864 76.5 70.9 24.4 29.4 82% 73% 5.59 7.56
In progress** 998 0.0 0.0 0.1 - 100% - 7.50 -
To commence in the next financial year 18,775 4.6 - 1.7 - 84% - 8.91 -
Total 465,636 81.1 70.9 26.2 29.4 82% 73% 5.73 -
* See the Glossary section of the Annual Report and Accounts 2024.
** As at 31 March 2024 one project in process which has been 100%
recharged to tenant.
In addition to the capex investment programme on acquired "structural" vacant
space, Sirius continually identifies and looks for opportunities to upgrade
the space that is vacated each year as a result of move-outs. Within the
existing vacancy at 31 March 2024, the Company has identified approximately
38,214 sqm of recently vacated space that has potential to be significantly
upgraded before it is re-let. This space will require an investment of
approximately €7.5m and has an estimated rental value of €3.3m when fully
re-let. Upgrading this vacated space allows the Company to enhance the
reversionary potential of the portfolio whilst significantly improving the
quality, desirability and hence value of not only the space that is invested
into but the whole site.
The analysis below details the sub-optimal space and vacancy at 31 March 2024
and highlights the opportunity from developing this space.
Vacancy analysis - March 2024
Total space (sqm) 1,751,598
Occupied space (sqm) 1,493,056
Vacant space (sqm) 258,543
Occupancy 85%
% of total Sqm Capex ERV *
space investment (post investment)
€m
Structural vacancy 2% 43,354 - -
Capex investment programme 1% 19,773 (4.6) 1.8
Recently vacated space 2% 38,214 (7.5) 3.3
Total space subject to investment 3% 57,987 (12.1) 5.1
Lettable vacancy:
Smartspace vacancy 2% 32,953 - 3.8
Other vacancy 7% 124,249 (1.7) 8.8
Total lettable space 9% 157,202 (1.7) 12.6
Total vacancy 15% 258,543 (13.8) 17.7
* See the Glossary section of the Annual Report and Accounts 2024.
The German portfolio's headline 85% occupancy rate means that in total 258,543
sqm of space is vacant as at 31 March 2024. When excluding the vacancy which
is subject to investment (3% of total space), and the structural vacancy which
is not economically viable to develop (2% of total space), the Company's
occupancy rate based on space that is readily lettable is approximately 90%.
Whilst the capex investment programmes are a key part of Sirius' strategy,
they represent one of several ways in which the Company can organically grow
income and capital values. A wide range of asset management capabilities
including the capturing of contractual rent increases (especially whilst
inflation is high), uplifts on renewals and the re-letting of space at higher
rates are also expected to contribute to the Company's annualised rent roll
growth going forward.
Whilst the Company will continue to look to asset recycling to replenish the
vacancy which is let up after transformation, the Company maintains a
risk-adjusted strategy and expects to continue to hold a significant amount of
core mature assets in order to maintain a balanced portfolio that provides a
combination of stable, long-term financeable income with value-add assets with
growth potential.
Well-diversified income and tenant base
Against the backdrop of continued market disruption, be it ongoing
geopolitical conflict or sticky inflationary environment, the importance of a
well-diversified tenant base and wide range of products is evident. Sirius'
portfolio includes production, storage and out of town office space that
caters to multiple uses and a range of sizes and types of tenants. The
Company's business model is underpinned by its tenant mix which provides
stability through its large, long-term anchor tenants and opportunity through
the SME and flexible individual tenants.
The Group's large anchor tenants are typically multinational corporations
occupying production, storage and related office space whereas the SMEs and
individual tenants occupy space on both a conventional and a flexible basis
including space marketed under the Company's popular Smartspace brand which
provides tenants with a fixed cost and maximum flexibility. The Company's wide
range of diverse tenants results in not having to rely on a single tenant,
with its largest single tenant contributes 2.1% of total annualised rent roll
whilst 7.9% of its annualised rent roll comes from stable Government tenants.
SMEs in Germany, the Mittelstand, are typically defined as companies with
revenues of up to €50.0m and up to 500 employees. This demographic remains a
key target group due to its significant contribution to Germany's economy as a
whole, and is a key contributor to the Company's rent roll. The wide range of
tenants that the Sirius marketing and sales team is able to attract is a key
competitive advantage for the Company and results in a significantly de-risked
business model when compared to other owners of multi-tenanted light
industrial and business park assets.
The table below illustrates the diverse nature of tenant mix within the Sirius
portfolio at the end of the reporting period:
No. of Occupied % of Annualised % of total Rate
tenants as at sqm occupied sqm rent roll * annualised per sqm
31 March 2024 €m rent roll * €
%
Top 50 anchor tenants((1)) 50 676,802 45% 49,422 38% 6.09
Smartspace SME tenants((2)) 3,007 74,076 5% 8,697 7% 9.78
Other SME tenants((3)) 2,858 742,178 50% 71,593 55% 8.04
Total 5,915 1,493,056 100% 129,712 100% 7.24
(1) Mainly large national/international private and public tenants.
(2) Mainly small and medium-sized private and public tenants.
(3) Mainly small and medium-sized private and individual tenants.
* See the Glossary section of the Annual Report and Accounts 2024.
Smartspace and First Choice
Sirius' Smartspace products are designed with flexibility in mind, allowing
tenants to benefit from a fixed cost which continues to be desirable even in
challenging market conditions. The majority of Smartspace has been developed
from space that is either sub-optimal or considered to be structurally void by
most light industrial real estate operators. Following conversion, the area is
transformed into space that can be let at significantly higher rents than the
rest of the business park and, as a result, is highly accretive to both income
and value. The Company was able to add 4,400 sqm of Smartspace offering from
101,277 sqm in the prior year (reduced by the disposals) to 105,677 sqm which
is an increase of more than 4%. Total Smartspace occupancy increased to 70%
(31 March 2023: 65%), which led to 4.2% increase of the annualised Smartspace
rent roll.
The most significant growth occurred in the Smartspace storage product. The
Company's market research through its marketing and sales platforms indicated
strong demand in this sector and Sirius was able to act accordingly to capture
some of this. The addition of 3,383 sqm of Smartspace storage helped grow this
product line's rental income contribution by €0.3m.
Additionally a further 3,125 sqm of Smartspace office space were created in
the period which contributed to rental growth of €0.3m.
The total amount of Smartspace in the portfolio at the year-end was 105,677
sqm (31 March 2023: 107,396 sqm), generating €8.7m (31 March 2023: €8.4m)
of annualised rent roll which equates to 6.7% of the Company's total
annualised rent roll. Average rate per sqm decreased by 1.4% from €9.92 per
sqm to €9.78 per sqm, reflecting the addition of the storage space which is
typically lower yielding than office.
The table below illustrates the contribution of each of the Smartspace
products:
Smartspace product type Total sqm Occupied sqm Occupancy Annualised % of total Rate *
% rent roll * Smartspace per sqm
(excl. service annualised (excl. service
charge) rent roll * charge)
m€ % €
First Choice office* 7,107 4,290 60% 1.1 12% 21.32
SMSP office 37,790 25,671 68% 3.1 36% 10.08
SMSP workbox 5,972 5,236 88% 0.4 5% 6.89
SMSP storage 53,713 38,642 72% 3.7 43% 7.97
SMSP container - - - 0.3 3% n/a
SMSP subtotal 104,582 73,839 71% 8.6 99% 9.78
SMSP FlexiLager 1,096 237 22% 0.1 1% 12.07
SMSP total 105,678 74,076 70% 8.7 100% 9.78
* See the Glossary section of the Annual Report and Accounts 2024.
Asset management review - UK
Active asset management
Metric 31 March 2024 31 March 2023 Variance Variance %
Total annualised rent roll (£ m) 55.6 48.5 7.1 14.6
Like-for-like annualised rent roll (£ m) 51.9 48.2 3.7 7.7
Average rate (£) per sq ft 14.86 13.39 1.47 11.0
Average rate (£) per sq ft like for like 14.39 13.49 0.90 6.7
Total occupancy (%) 86.6 86.5 0.1 0.1
Like-for-like occupancy (%) 87.0 86.4 0.6 0.7
Cash collection (%) 98.8 99.3 (0.5) (0.5)
Lettings and rental growth
The UK recorded a like-for-like increase in its annualised rent roll of 7.7%
to £51.9m (31 March 2023: £48.2m), equating in euro terms to €60.0m (31
March 2023: €54.9m) . The total annualised rent roll increase in the year
was £7.1m (€8.2m), with £4.0m (€4.6m) organic growth offset by asset
disposals totalling £0.3m (€0.4m) and net move-outs of £0.3m (€0.4m).
Acquisitions accounted for £3.7m (€4.4m) of rent roll uplift in the period.
Like-for-like average rate per sq ft increased by 6.7% to £14.39 (31 March
2023: £13.49), equating to an increase in euro terms to €15.10 per sqm (31
March 2023: €13.76 per sqm), reflecting management's ability to capture
rental growth in the current inflationary environment. Through its asset
management initiatives, the Company was able to grow not only its
like-for-like rental growth in the period, but also noted a modest improvement
in its like-for-like occupancy, contributing positively to its top-line
growth.
The increase in annualised rent roll over the period can be broken down into
move-ins of 921,825 sq ft (85,640 sqm) that were generating £16.4 million
(€19.0m) of annualised rent roll at an average rate of £17.80 per sq ft
(€18.49 per sqm), being offset by move-outs of 895,428 sq ft (83,187 sqm)
generating £16.8m (€19.4m) of annualised rent roll at an average rate of
£18.72 per sq ft (€19.45 per sqm). The lower move-in rate is predominantly
driven by re-lets of office space at a lower rate to drive occupancy.
Additionally, rental uplifts on existing tenants added a further £4.0m
(€4.4m) to the annualised rent roll during the period. Furthermore, the
disposal of one property during the period accounted for a £0.3m (€0.3m)
reduction in annualised rent roll. As mentioned below in the asset recycling
overview, one asset was disposed of during the period which accounted for a
£0.3 m (€0.4m) reduction in annualised rent roll.
The movement in annualised rent roll is illustrated in the table below:
£m
Annualised rent roll 31 March 2023 48.5
Move-outs (16.8)
Move-ins 16.5
Contracted uplifts 4.0
Disposals (0.3)
Acquisitions 3.7
Annualised rent roll 31 March 2024 55.6
Despite a challenging market, driven by market uncertainty over inflation, the
UK operating platform generated a healthy number of enquiries for the year,
totalling 17,108 for the period (31 March 2023: 15,511), signing 1,165 deals
(31 March 2023: 963) totalling 586,773 sq ft (54,513 sqm) (31 March 2023:
420,647 sq ft (39,079 sqm)) with an average deal per sqm of 504 sq ft (47 sqm)
(31 March 2023: 437 sq ft (40 sqm)). These developments have made a positive
impact on rental growth and contributed to the Company's occupancy growth in
the year. During the second half of the year the Company averaged over 90
deals per month during the year at a sales conversion rate of 6.8% which has
seen an improvement from 6.2% in the previous period.
Cash collection
Cash collection rates marginally reduced to 98.8% (31 March 2023: 99.3%) as
total billings increased by 9.9% year on year. The 98.8% cash collection rate
can be analysed as total net of VAT billing amounting to £53.1m (€61.6m),
total uncollected debt at year end amounting to £0.6 m (€0.7m) with
negligible write-offs during the period, comparing to net of VAT billings of
£48.3m (€56.0m) and uncollected debt of £0.3m (€0.4m) with negligible
write offs in the prior comparative period. There are no deferred payment
plans in place and the Company expects to collect the majority of the
outstanding debt at year end through its regular debt collection activities.
Asset recycling
Similar to Germany, the Company realised its identified pipeline of targets
through the acquisition of five assets in the period, with its major
Gloucestershire acquisition notarised in the second half of the year,
completing in April 2024 and the disposal of one non-core asset in Stoke.
A summary of the acquisitions and disposals that completed or were notarised
in the year is detailed in the table below:
Acquisitions
Date Total Total Annualised Annualised Occupancy Gross yield*
investment acquired rental NOI
£m sq ft income £m
£m
Liverpool and Barnsley Oct 23 10.1 71,957 1.3 1.0 99.3% 12.4%
Islington and Camden Nov 23 35.7 103,962 2.8 2.6 69.8% 7.8%
Vantage Point** Apr 24 50.1 1,464,664 5.1 5.1 81.0% 10.2%
Total 95.6 1,640,583 9.2 8.7 81.1% 9.5%
* Includes purchaser costs.
** Completed 5 April 2024
A summary of the opportunities and characteristics of each asset acquired in
the period is detailed below.
· The Liverpool and Barnsley acquisition of £10.1m (€11.7m), which
completed on 2 October 2023, comprised two mixed-use industrial assets with a
combined area of 71,957 sq ft (6,685 sqm) of predominantly workshop space. The
purchase price represented a NIY of 9.6% (total acquisition costs).
· The £35.7m (€41.2m) purchase of three multi-let studio sites
(Islington, Spectrum House and Finsbury Park) located in Islington and Camden
in North London represents a 7.3% net initial yield after costs. The assets,
with a combined area of 103,962 sq ft (9,658 sqm) are just under 70% let,
providing opportunity for the Company to implement its asset management
initiatives.
· The Vantage Point Business Park in Gloucestershire is situated in a
highly desirable location on the edge of The Forest of Dean, and close to a
number of major cities including Bristol to the South, Gloucester to the East
and Cardiff to the Southwest, and the park benefits from good transport
networks and connectivity to the national motorway network via the A40 and
M50. The 60-acre (136,071 sqm) business park at Mitcheldean was renowned first
for manufacturing Rank projection equipment then as Rank Xerox's manufacturing
hub between 1961 and 2003. It is 81% occupied and offers a mixture of
warehouse, production, storage, conventional and serviced office space to over
70 companies across 119 units. Sirius has identified a number of opportunities
to drive value by utilising its asset management platform to improve
occupancy, income and service charge recovery. Proximity to other Sirius
sites, including Gloucester Barnwood and Gloucester Morelands, will enable the
Company to leverage operational synergies alongside its local market
expertise.
Disposals
Date Total Total Annualised Annualised Occupancy Gross yield*
sales price disposal rental NOI
£m sq ft income £m
£m
Stoke Mar 24 3.0 55,097 0.3 0.2 79.7% 9.1%
Total 3.0 55,097 0.3 0.2 79.7% 9.1%
* Calculated on net purchase price.
The asset, which comprises just over 55,097 sq ft (c. 5,118 sqm) of industrial
space, was sold at a 1% premium to the last reported book value and was deemed
non-core to the business going forward.
Site Investment
BizSpace has historically invested in its sites in order to maintain and
upgrade its spaces which allows it to adapt to changes in tenant demand. In
the period under review, the Company invested a total of £9.6m (€11.1m) (31
March 2023: £4.8m (€5.6m)) into its sites focused primarily on improving
the condition of spaces to drive occupancy and price. The Company expects to
identify further opportunities to invest into its assets in the new financial
year whilst continuing to progress its ESG-related investment in order to
align itself with the wider Group.
Well-diversified income and tenant base
BizSpace's portfolio includes light industrial, studio, out of town office
space and storage that caters to multiple usages and a range of sizes and
types of tenants. As a result, the Company's business model is underpinned by
a well-diversified tenant base.
The Company's top 100 tenants, which are typically large corporates, account
for 21.2% of the annualised rent roll with the next 900 tenants accounting for
44.8% of annualised rent roll. The remaining 34.0% of annualised rent roll
relates to nearly 3,000 SME and micro-SME tenants which occupy 39.6% of the
overall estate.
The table below illustrates the diverse nature of tenant mix within the Sirius
portfolio at the end of the reporting period:
No. of Occupied % of Annualised % of total Rate
tenants as at Sq ft m occupied sq ft rent roll annualised per sq ft £
31 March 2022 £m rent roll
Top 100 tenants 100 0.8 21.7% 11.8 21.2% 14.31
Next 900 900 1.8 48.6% 24.9 44.8% 13.75
Remaining SME 2,739 1.1 29.7% 18.9 34.0% 17.08
Total 3,739 3.7 100.0% 55.6 100.0% 14.86
SMEs in the UK are typically defined as companies with revenues of up to
£50.0m and up to 250 employees. The Company's internal operating platform and
product offering have a strong track record of attracting and retaining
tenants in this segment of the market which is expected to continue to grow as
a result of structural trends impacting the UK market.
Financial review
Continued sustainable FFO growth
Chris Bowman
Chief Financial Officer
"Sirius is pleased with the continued support from its shareholders as
demonstrated in the recent €165.3m equity raise to fuel an accretive
pipeline to position the Company for its next phase of growth."
Continued FFO growth
Sirius recorded FFO of €110.2m which represents a 7.9% increase over the
€102.1m FFO reported last year. The Group has benefited from continued
substantial organic growth and excellent asset recycling despite facing
headwinds in the form of increasing interest rates and utility costs as well
as the challenging markets which are continuing to be affected by instability
from the Ukraine conflict and the cost of living crisis in both Germany and
the UK. The main driver of organic growth was the 7.2%((1)) increase in
like-for-like rent roll which underpinned the 8.2%((1)) total rent roll growth
when incorporating the effect of asset recycling and acquisitions.
Trading performance and earnings
The Company has reported a profit before tax in the year ended 31 March 2024
of €115.2m (31 March 2023: €87.0m), representing an increase of 32.4% from
the prior year. This increase in profit is mainly due to the FFO growth
mentioned above including a net valuation gain of €12.4m (€50.1m valuation
gain less €37.7m capex) being reported in the period, whereas in the prior
year a net valuation deficit of €7.7m (€21.4 m valuation increase less
€29.9m capex) was reported. The €8.1m increase in FFO to €110.2m (31
March 2023: €102.1m) included BizSpace contributing €28.5m to the Group
(31 March 2023: €26.7m), increasing its FFO contribution by €1.8 million
year over year. The organic growth within our UK business came mainly from the
7.5%((1)) increases in like-for-like annualised rental income, with
acquisitions in the second half of the year contributing to the total
annualised rent roll increase of 14.5%((1)). The UK has a loss after tax due
to a revaluation deficit noted in the period, as outlined in "Portfolio
valuation - Group" in greater detail.
The Company entered into acquisitive growth in the second half of the
financial year as it saw significant opportunity in the market off the back of
its €165.3m financing in November 2023, with the vast majority of capital
either spent or committed to attractive assets in both Germany and the UK. The
effects of the acquisitive growth are expected to be flowing through in
FY2025, as the assets are integrated into the platform and contribute to the
Group's FFO.
(1) The Company has chosen to disclose certain Group rental income figures
utilising a constant foreign currency exchange rate of GBP:EUR 1.1695, being
the closing exchange rate as at 31 March 2024.
On a per share basis, the impact of valuations stabilising resulted in a 28.3%
increase in basic EPS for the period to 8.75c per share. Adjusted EPS, basic
EPRA EPS and diluted EPRA EPS, which exclude the impact of valuations
described above, increased by approximately 8.4%, 8.7% and 8.6% respectively
reflecting the strong operational performance in the year.
Earnings No. of shares 31 March 2024 Earnings No. of shares 31 March 2023 Change
€m cents per share €m cents per share %
Basic EPS 107.8 1,231,991,541 8.75 79.6 1,167,757,975 6.82 28.3
Diluted EPS 107.8 1,249,500,420 8.63 79.6 1,183,626,763 6.73 28.2
Adjusted EPS* 106.2 1,231,991,541 8.62 92.9 1,167,757,975 7.96 8.4
Basic EPRA EPS 101.1 1,231,991,541 8.21 88.2 1,167,757,975 7.55 8.7
Diluted EPRA EPS 101.1 1,249,500,420 8.10 88.2 1,183,626,763 7.45 8.6
* See note 12 and the Business analysis section of the Annual Report and
Accounts 2024.
Income
Total revenue reported in the period, which comprises rent, fee income
relating to Titanium, other ancillary income from investment properties, and
service charge income, increased from €270.1m for the 31 March 2023 year to
€288.8m this year. The detail of the €18.7m increase in income is shown in
the following table.
Year ended Year ended
31 March 2024 31 March 2023
Germany UK Total Germany UK Total
€m €m €m €m €m €m
Rental and other income from investment properties 131.5 38.3 169.8 125.5 33.3 158.8
Service charge income from investment properties 73.4 25.9 99.3 66.6 24.0 90.6
Rental and other income from managed properties 4.6 - 4.6 10.9 - 10.9
Service charge income from managed properties 15.1 - 15.1 9.8 - 9.8
Revenue 224.6 64.2 288.8 212.8 57.3 270.1
Annualised rent roll in Germany increased by 5.4% from €123.1m to €129.7m
with organic growth contributing €8.5m respectively whilst disposals
exceeded acquisitions by €1.9m BizSpace's annualised rent roll increased
14.4%((1)) from €56.8((1)) m to €65.0((1))m in the period, with the impact
of organic growth of €4.1m being supported by net acquisitions of €4.1m.
This is shown in more detail in the following table:
Germany UK ((1)) Group
€m €m €m
Opening annualised rent roll 123.1 56.8 179.9
Acquisitions 1.7 4.4 6.1
Disposals (3.6) (0.3) (3.9)
Move-ins/outs 4.3 (0.4) 3.9
Uplifts 4.2 4.7 8.9
Foreign currency impacts - (0.2) (0.2)
Closing annualised rent roll 129.7 65.0 194.7
(1) The Company has chosen to disclose certain Group rental income
figures utilising a constant foreign currency exchange rate of GBP:EUR 1.1695,
being the closing exchange rate as at 31 March 2024.
The rental growth in the period remains strong year on year, achieved through
increasing rates whilst also modestly reducing vacancy rates. The vacancy
remaining in the like-for-like portfolio, coupled with that acquired through
our acquisitions, means that the opportunity that remains within this vacancy
for further organic growth over the next few years has been preserved. As
inflationary levels recede from their recent highs, the key to unlocking this
in the most effective way is through the continuation of Sirius' capex
investment programmes combined with a wide range of other intensive asset
management initiatives.
Portfolio valuation - Group
The portfolio of owned assets was independently valued at €2,186.7m by
Cushman & Wakefield LLP at 31 March 2024 (31 March 2023: €2,103.2),
which converts to a book value of €2,210.6m after the adjustments in
relation to lease incentives and inclusion of leased investment property. A
breakdown of the movement in owned and leased investment property, excluding
assets held for sale, is detailed in the table below.
German investment German investment UK investment UK investment Investment
property - owned property - leased property - owned property - leased property - total
€m €m €m €m €m
Investment properties at book value as at 31 March 2023* 1,680.8 10.8 417.7 13.7 2,123.0
Additions relating to owned investment properties 21.4 - 52.7 - 74.1
Capex investment and capitalised broker fees 26.6 - 11.1 - 37.7
Disposal (45.5) - (3.4) - (48.9)
Gain/(deficit) on revaluation above capex investment and broker fees 41.0 - (28.6) - 12.4
Deficit on revaluation relating to leased investment properties - (0.8) - (0.1) (0.9)
Adjustment in respect of lease incentives 0.7 - 0.7
Currency effects - - 12.1 0.4 12.5
Investment properties at book value as at 31 March 2024* 1,725.0 10.0 461.6 14.0 2,210.6
* Excluding assets held for sale.
The increase in value of the German portfolio of €44.4m was made up of
€21.4m of asset acquisitions, less €45.5m of disposals, plus a €67.6m
valuation increase on the existing portfolio and finally a €0.7m positive
adjustment in respect of lease incentives. The €67.6m valuation increase was
higher than the €26.6m of capex spent on that portfolio; hence, the net of
these resulted in a €41.0m gain being booked through the Company's profit.
In the UK, the value of the BizSpace portfolio increased by €43.9m due to
€3.4m of disposals offset by €52.7m of additions, a valuation deficit of
€17.5m on the existing portfolio and a €12.5m foreign currency reduction
due to the strengthening of GBP against EUR for the year. The €17.5m
valuation deficit was further increased by €11.1m capex spent on that
portfolio, resulting in a €28.6m deficit being reported through the
Company's profit.
The Company recognised a gain on revaluation of investment properties of
€12.4m for the year which compares to a €7.7m deficit recognised in the
comparative prior period.
Portfolio valuation - Germany
The book value of the existing German portfolio that was owned for the full
period increased by €68.0m or 4.2% from €1,636.1m to €1,704.1m. This was
driven by an increase in annualised rent roll of €8.5m in the year which
more than compensated for a gross yield expansion of approximately 20 bps.
The German portfolio at 31 March 2024 comprises 68 assets with a book value of
€1,725.0m generating €127.6m of rental income and €125.3m of net
operating income based on an occupancy of 85.2%. This represents an average
gross yield of 7.5% (31 March 2023: 7.3%), which translates to a net yield of
6.8% (31 March 2023: 6.5%) and an EPRA net yield (including estimated
purchaser costs) of 6.3% (31 March 2023: 6.2%).
Yields have expanded within the German portfolio valuation by a further 20 bps
in the period to 7.5% (31 March 2023:7.3%). The average capital value per sqm
of the portfolio of €950 (31 March 2023: €912) also remains below
replacement cost and, when considered with the level of vacancy that remains
within the portfolio, illustrates the excellent opportunity for further
growth, particularly from upgrading and letting up the sub-optimal vacant
space through the Company's capex investment programmes.
The acquisitions made over recent years have replenished a lot of the vacancy
that was transformed and let up through Sirius' capex investment programmes.
As a result, at 31 March 2024, 61% of the German portfolio are considered
value-add assets (31 March 2023: 65%) which, with average occupancy of 81.2%
and valued at a gross yield of 8.0%, provide significant opportunity for
further earnings and value growth. The mature assets which make up about 39%
of the German portfolio have reached an occupancy level of 94.4% and, at a
gross yield of 6.8%, are valued at a yield that is 120 bps lower than the
value-add assets. As the transformation of the value-add assets continues, the
yield gap between the mature and value-add assets is expected to reduce. The
full details of the capex investment programmes are provided in the Asset
management review - Germany section of this report. The specifics of the
value-add and mature portfolios are detailed in the table below:
Annualised Book value NOI Capital Gross yield * Net yield * Vacant Rate psqm Occupancy
rent roll €m €m value % % space € * % *
€m €m/sqm * sqm *
Value-add assets** 84.0 1,053.2 75.1 834 8.0% 7.1% 229,087 7.06 81.2%
Mature assets 45.7 671.8 43.7 1,216 6.8% 6.5% 29,456 7.60 94.4%
Other - -1.7 - - - - - -
Total 129.7 1,725.0 117.1 950 7.5% 6.8% 258,543 7.24 85.2%
* Expressed as averages.
** Including assets held for sale.
The reconciliation of book value to the independent Cushman & Wakefield
LLP valuation excluding assets held for sale is as follows:
31 March 2024 31 March 2023
€m €m
Investment properties at market value 1,728.9 1,685.5
Adjustment in respect of lease incentives (3.9) (4.7)
Book value of investment properties* 1,725.0 1,680.8
Portfolio valuation - UK
At 31 March 2024, the value of the UK portfolio was £394.7m (€461.6m),
compared to a £367.2m (€417.7 m) valuation at 31 March 2023. Of the change
in valuation, £41.6m is attributed to the acquisition of 5 assets (£44.9 m)
offset by the disposal of Stoke (£3.3m) and yield expansion (£14.1m) during
the period.
The like-for-like value of the UK portfolio was £349.8 m (€409.8m), which
was lower than the 31 March 2023 valuation of £363.9m (€413.9m). The
£14.1m decrease was driven by yield expansion of approximately 60 bps to a
9.9% like-for-like portfolio net yield, which fully offset a £3.6m increase
in annualized rent roll during the period. On a euro basis, the like-for-like
portfolio also benefited from the appreciation of GBP compared to the euro
year on year, and the impact of yield expansion was reduced to €4.1m. The
EPRA net yield (including estimated purchaser costs) stands at 8.7% (31 March
2023: 7.6%.
The average capital value per sq ft of the total portfolio of £91 per sq ft
(€1,150 per sqm) (31 March 2023: £88 per sq ft (€1,072 per sqm)) also
remains below replacement cost and further supports the sentiment that there
remains value-add potential within the portfolio.
Annualised Book value NOI Capital Gross yield Net yield Vacant Rate psqft Occupancy
rent roll £m £m value % % space £ %
£m £/sq ft sq ft
UK portfolio 55.6 394.7 34.8 91.31 14.1% 9.9% 580,931 14.86 86.5%
The UK does not have material lease incentives adjusting the investment
property values.
Net asset value
The valuation movements mentioned above, together with retained profits after
payment of dividends, resulted in an increase in net asset value per share to
104.96c at 31 March 2024, an uplift of 2.4% from 102.46c as at 31 March 2023.
The adjusted net asset value per share increased to 111.12c at 31 March 2024,
an uplift of 1.8% from 109.21c as at 31 March 2023. The Company paid out 5.98c
per share of dividends during the financial year which contributed to a total
shareholder accounting return (adjusted NAV growth plus dividends paid) of
7.2% (31 March 2023: 5.3%). The movement in NAV per share is explained in the
following table:
Cents per share
NAV per share as at 31 March 2023 102.46
Recurring profit after tax 7.92
Equity raise (0.94)
Gain on revaluation (net of capex) 0.98
Deferred tax charge (0.19)
Cash Dividend Paid (5.62)
Adjusting items(1) 0.35
NAV per share as at 31 March 2024 104.96
Deferred tax and derivatives 6.16
Adjusted NAV per share as at 31 March 2024(2) 111.12
EPRA adjustments(3) (1.30)
EPRA NTA per share as at 31 March 2024(2) 109.82
(1) Adjusting items includes non-recurring items including restructuring
costs, minorities, share of profit in associates, gains and losses on
investments, share-based payments including vesting and foreign currency
effects.
(2) See Annex of 2024 Annual accounts for further details.
(3) Adjusted for the potential impact of shares issued in relation to the
Company's long-term incentive programmes, intangible assets, provisions for
deferred tax and derivative financial instruments.
The EPRA NTA per share, which, like adjusted NAV per share, excludes the
provisions for deferred tax and fair value of derivative financial instruments
but also includes the potential impact of shares issued in relation to the
Company's long-term incentive programmes and excludes intangible assets, was
109.82c, an increase of 1.6% from 108.11c as at 31 March 2023.
Financing
In November 2023, the Company saw significant opportunity in the acquisitions
market and raised €165.3m via an equity placing of new shares to fund a
pipeline of attractive asset acquisitions in both Germany and the UK. The
Company has delivered on this pipeline, completing or notarising €157.8m
(before costs) in acquisitions since.
In May 2023 the Company refinanced its €57.3m Deutsche Pfandbriefbank
("PBB") loan facility, seven months in advance of it falling due on 31
December 2023. The new facility amounting to €58.3m has a term of seven
years at a fixed interest rate of 4.25%. In addition to this early
refinancing, in August 2022 the Company secured a refinancing with Berlin Hyp
AG, one year in advance, of its €170m facility due in October 2023, agreeing
a new seven-year €170m facility commencing on 1 November 2023 with a fixed
interest rate of 4.26%.
Of the €955.3m of total debt, the Company has €28.5m of debt coming due in
the next twelve months which is made up of two tranches of the HSBC
Schuldschein totalling €15m and €13.5m Saarbrücken Sparkasse. These loans
come due in the fourth fiscal quarter and negotiations regarding extensions
shall commence in due course.
The debt structure of the Company remains such that 75% of its debt is
unsecured (31 March 2023: 75%) allowing the Company to maintain flexibility
over its financing structure. As at 31 March 2024, the Company had a weighted
average debt expiry of 4.0 years, net LTV was 33.9% (31 March 2023: 41.6%) and
interest cover at EBITDA level was 8.3x (31 March 2023: 8.6x). All covenants
were complied with in full during the period.
Fitch confirmed its BBB investment grade rating with "Stable Outlook" in
October 2023.
Post balance sheet, the Company increased its €300.0m Corporate Bond due in
November 2028 by 19.9%, issuing €59.9m in additional debt. The Company
intends to utilise the proceeds for fuelling its acquisition pipeline and
corporate purposes.
The Company's weighted average cost of debt is 2.10% whilst the weighted
average debt expiry remains at 4.0 years following the above financing
activity.
A summary of the movement in the Group's debt is set out below:
Movement in debt
€m
Total debt as at 31 March 2023 975.1
Repayment of credit facility (243.3)
Drawdown of credit facility 228.3
Scheduled amortisation (4.7)
Total debt as at 31 March 2024 955.4
Dividend
The Board has authorised a dividend in respect of the second half of the
financial year ended 31 March 2024 of 3.05c per share, which together with the
first half dividend of 3.00c per share, represents an increase of 6.5% on the
5.68c total dividend declared in respect of the financial year ended 31 March
2023.
The table below shows the dividends paid and pay-out ratios over the last five
years, demonstrating the excellent progression the Company has made in the
period as well as the ability of the Board to increase the dividend pay-out
ratio whilst the proceeds of asset disposals are invested.
First half dividend Second half Total dividend Blended
per share dividend per share pay-out ratio
cents per share cents % of FFO
cents
Year ended March 2019 1.63 1.73 3.36 70%
Year ended March 2020* 1.77 1.80 3.57 66%
Year ended March 2021 1.82 1.98 3.80 65%
Year ended March 2022 2.04 2.37 4.41 65%
Year ended March 2023 2.70 2.98 5.68 65%
Year ended March 2024** 3.00 3.05 6.05 68%
* First half 67%, second half 65% of FFO.
** First half 66%, second half 69% of FFO
Details of the dividend distribution and announcement are detailed in note 28
of the Annual Report and Accounts.
Summary
As inflation came off its peaks experienced in 2022 and acquisition
opportunities in the market crystalized, the Company was able to grow its
occupancy and capture organic growth whilst setting itself up for further
growth through transacting on its acquisition pipeline in the second half of
the year, purchasing in total five properties, three of which completed in
April 2024.
The Company's balance sheet remains strong as demonstrated through its recent
equity and debt financings in the year, permitting it to continue to grow
through acquisitions whilst maintaining a healthy net LTV ratio. This has been
confirmed by Fitch in October 2023 through its BBB investment grade rating
with a stable outlook. The Company continues to deliver on its growth
objectives and continues to be well positioned to take advantage of
opportunities as they arise.
The Company's strong financial profile, along with its proven internal
operating platform, means the Company is fully capable of adapting to changing
market conditions. With acquisition firepower available, further vacancy to
develop and reversion potential to capture, as well as a defensively
positioned portfolio, the Company is well set to meet the challenges ahead and
looks forward to continuing to deliver attractive and sustainable returns for
shareholders in the future.
Chris Bowman
Chief Financial Officer
31 May 2024
DIRECTORS' RESPONSIBILITIES STATEMENT
The directors confirm that, to the best of their knowledge the preliminary
consolidated financial statements have been prepared in accordance with
international financial reporting standards, and give a true and fair view of
the assets, liabilities, financial position and profit or loss of the Group
and that this announcement includes a fair summary of the development and
performance of the business and the position of the Group. After making
enquiries, the directors considered it appropriate to adopt the going concern
basis in preparing the financial statements. The names and functions of the
Company's directors are listed on the Company's website.
Daniel Kitchen
Chairman
Principal Risks and Uncertainties
The principal risks and uncertainties faced by the Group are included on pages
66 to 71 of the Group's Annual Report and Accounts 2023 available on the
website at: www.sirius-real-estate.com (http://www.sirius-real-estate.com)
CONSOLIDATED INCOME STATEMENT
for the year ended 31 March 2024
Notes Year ended Year ended
31 March 2024 31 March 2023
€m €m
Revenue 5 288.8 270.1
Direct costs 6 (123.0) (116.7)
Net operating income 165.8 153.4
Gain/(loss) on revaluation of investment properties 13 12.2 (9.8)
Gain on disposal of properties 0.9 4.7
Movement in expected credit loss provision 6 0.9 (1.0)
Administrative expenses 6 (49.7) (48.3)
Share of profit of associates 19 0.6 2.6
Operating profit 130.7 101.6
Finance income 9 6.6 2.8
Finance expense 9 (20.8) (18.3)
Change in fair value of derivative financial instruments 9 (1.3) 0.9
Net finance costs (15.5) (14.6)
Profit before tax 115.2 87.0
Taxation 10 (7.3) (7.3)
Profit for the year after tax 107.9 79.7
Profit attributable to:
Owners of the Company 107.8 79.6
Non-controlling interest 0.1 0.1
107.9 79.7
Earnings per share
Basic earnings per share 11 8.75c 6.82c
Diluted earnings per share 11 8.63c 6.73c
All operations of the Group have been classified as continuing.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 March 2024
Notes Year ended Year ended
31 March 2024 31 March 2023
€m €m
Profit for the year after tax 107.9 79.7
Other comprehensive income/(loss) that may be reclassified to profit or loss
in subsequent periods
Foreign currency translation 27 12.9 (17.2)
Other comprehensive income/(loss) after tax that may be reclassified to profit 12.9 (17.2)
or loss in subsequent periods
Other comprehensive income/(loss) for the year after tax 12.9 (17.2)
Total comprehensive income for the year after tax 120.8 62.5
Total comprehensive income attributable to:
Owners of the Company 120.7 62.4
Non-controlling interest 0.1 0.1
120.8 62.5
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 March 2024
Notes 31 March 2024 31 March 2023
€m €m
Non-current assets
Investment properties 13 2,210.6 2,123.0
Plant and equipment 15 7.8 7.2
Intangible assets 16 3.3 4.1
Right of use assets 17 12.6 14.4
Other non-current financial assets 18 49.1 48.4
Investment in associates 19 25.2 26.7
Total non-current assets 2,308.6 2,223.8
Current assets
Trade and other receivables 20 42.4 30.5
Derivative financial instruments - 1.3
Cash and cash equivalents 21 244.2 124.3
Total current assets 286.6 156.1
Assets held for sale 14 - 8.8
Total assets 2,595.2 2,388.7
Current liabilities
Trade and other payables 22 (114.7) (101.5)
Interest-bearing loans and borrowings 23 (29.6) (243.7)
Lease liabilities 17 (2.3) (2.2)
Current tax liabilities 10 (7.0) (5.4)
Total current liabilities (153.6) (352.8)
Non-current liabilities
Interest-bearing loans and borrowings 23 (915.5) (720.7)
Lease liabilities 17 (35.5) (37.4)
Deferred tax liabilities 10 (82.7) (80.2)
Total non-current liabilities (1,033.7) (838.3)
Total liabilities (1,187.3) (1,191.1)
Net assets 1,407.9 1,197.6
Equity
Issued share capital 26 - -
Other distributable reserve 27 605.7 516.4
Own shares held (8.1) (8.3)
Foreign currency translation reserve 27 (6.0) (18.9)
Retained earnings 815.7 707.9
Total equity attributable to the owners of the Company 1,407.3 1,197.1
Non-controlling interest 0.6 0.5
Total equity 1,407.9 1,197.6
The financial statements on pages 139 to 188 were approved by the Board of
Directors on 31 May 2024 and were signed on its behalf by:
Daniel Kitchen
Chair
Company number: 46442
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2024
Notes Issued Other Own Foreign Retained Total equity Non- Total
share distributable shares currency earnings attributable controlling equity
capital reserve held translation €m to the interest €m
€m €m €m reserve owners of €m
€m the Company
€m
As at 31 March 2022 - 570.4 (6.3) (1.7) 628.3 1,190.7 0.4 1,191.1
Profit for the year - - - - 79.6 79.6 0.1 79.7
Other comprehensive loss for the year - - - (17.2) - (17.2) - (17.2)
Total comprehensive income for the year - - - (17.2) 79.6 62.4 0.1 62.5
Dividends paid 28 1.4 (59.2) - - - (57.8) - (57.8)
Transfer of share capital 26 (1.4) 1.4 - - - - - -
Share-based payment transactions 8 - 5.5 - - - 5.5 - 5.5
Value of shares withheld to settle employee tax obligations 8 - (1.7) - - - (1.7) - (1.7)
Own shares purchased 26 - - (2.3) - - (2.3) - (2.3)
Own shares allocated 26 - - 0.3 .- - 0.3 - 0.3
As at 31 March 2023 - 516.4 (8.3) (18.9) 707.9 1,197.1 0.5 1,197.6
Profit for the year - - - - 107.8 107.8 0.1 107.9
Other comprehensive income for the year - - - 12.9 - 12.9 - 12.9
Total comprehensive income for the year - - - 12.9 107.8 120.7 0.1 120.8
Shares issued 26 167.4 (2.1) - - - 165.3 - 165.3
Transaction costs relating to share issues 26 (3.3) - - - - (3.3) - (3.3)
Dividends paid 28 - (75.3) - - - (75.3) - (75.3)
Transfer of share capital 26 (164.1) 164.1 - - - - - -
Share-based payment transactions 8 - 5.0 - - - 5.0 - 5.0
Value of shares withheld to settle employee tax obligations 8 - (2.2) - - - (2.2) - (2.2)
Own shares purchased 26 - - - - - - - -
Own shares allocated 26 - (0.2) 0.2 - - - - -
As at 31 March 2024 - 605.7 (8.1) (6.0) 815.7 1,407.3 0.6 1,407.9
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 March 2024
Notes Year ended Year ended
31 March 31 March
2024 2023
€m €m
Operating activities
Profit for the year before tax 115.2 87.0
Gain on disposal of properties (0.9) (4.7)
Net exchange differences in working capital 3.4 (0.2)
Share-based payments 8 5.0 5.5
(Gain)/loss on revaluation of investment properties 13 (12.2) 9.8
Change in fair value of derivative financial instruments 9 1.3 (0.9)
Depreciation of property, plant and equipment 6 1.8 2.1
Amortisation of intangible assets 6 1.5 1.3
Depreciation of right of use assets 6 1.8 2.1
Share of profit of associates 19 (0.6) (2.6)
Finance income 9 (6.6) (2.8)
Finance expense 9 20.8 18.3
Changes in working capital
Increase in trade and other receivables (0.3) (5.9)
Increase in trade and other payables 19.0 12.4
Taxation paid (3.1) (8.0)
Cash flows from operating activities 146.1 113.4
Investing activities
Purchase of investment properties (71.0) (42.8)
Prepayments relating to investment property acquisitions (7.1) -
Capital expenditure on investment properties (39.5) (28.4)
Purchase of plant and equipment and intangible assets (3.1) (5.3)
Proceeds on disposal of properties (including assets held for sale) 46.4 32.0
Dividends received from investment in associates 2.1 -
Increase in loans receivable due from associates (0.7) (0.1)
Interest received 6.6 2.8
Cash flows used in investing activities (66.3) (41.8)
Financing activities
Proceeds from issue of share capital 26 165.3 -
Transaction costs on issue of shares 26 (3.3) -
Shares purchased - (2.3)
Payment relating to exercise of share options 8 (2.2) (1.7)
Dividends paid to owners of the Company 28 (75.3) (57.8)
Proceeds from loans 228.3 -
Repayment of loans 23 (248.0) (20.4)
Payment of principal portion of lease liabilities (2.2) (1.2)
Finance charges paid (20.0) (15.2)
Cash flows from/(used in) financing activities 42.6 (98.6)
Increase/(decrease) in cash and cash equivalents 122.4 (27.0)
Net exchange difference (2.5) 0.3
Cash and cash equivalents as at the beginning of the year 124.3 151.0
Cash and cash equivalents as at the year end 21 244.2 124.3
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2024
1. General information
Sirius Real Estate Limited (the "Company") is a company incorporated in
Guernsey and resident in the United Kingdom for tax purposes, whose shares are
publicly traded on the Main Market of the London Stock Exchange ("LSE")
(primary listing) and the Main Board of the Johannesburg Stock Exchange
("JSE") (primary listing).
The consolidated financial information of the Company comprises that of the
Company and its subsidiaries (together referred to as the "Group" or
"Sirius") for the year ended 31 March 2024.
The principal activity of the Group is the investment in, and development of,
commercial and industrial property to provide conventional and flexible
workspace in Germany and the United Kingdom ("UK").
2. Accounting policies
(a) Basis of preparation and statement of compliance
The consolidated financial statements have been prepared on a historical cost
basis, except for investment properties, investment properties held for sale
and derivative financial instruments, which have been measured at fair value.
The consolidated financial information is presented in euros and all values
are rounded to the nearest hundred thousand shown in millions (€m), except
where otherwise indicated.
The Company has prepared its annual consolidated financial statements in
accordance with International Financial Reporting Standards ("IFRS") as issued
by the International Accounting Standards Board ("IASB") as a result of the
primary listing on the JSE, the Disclosure and Transparency Rules of the
United Kingdom Financial Conduct Authority, the SAICA Financial Reporting
Guides as issued by the Accounting Practices Committee, Financial Reporting
Pronouncements as issued by the Financial Reporting Standards Council, the
Listings Requirements of JSE Limited and The Companies (Guernsey) Law, 2008.
The consolidated financial statements have been prepared on the same basis as
the accounting policies set out in the Group's annual financial statements for
the year ended 31 March 2023, except for the changes in accounting policies
as shown in note 2(b). All forward-looking information is the responsibility
of the Board of Directors and has not been reviewed or reported on by the
Group's auditor.
(b) Changes in accounting policies
New and amended standards and interpretations
The Group applied for the first-time certain standards and amendments, which
are effective for annual periods beginning on or after 1 January 2023 (unless
otherwise stated).
IFRS 17 Insurance Contracts ("IFRS 17")
IFRS 17 is a comprehensive new accounting standard for insurance contracts
covering recognition and measurement, presentation and disclosure. IFRS 17
replaces IFRS 4 Insurance Contracts. IFRS 17 applies to all types of insurance
contracts (i.e., life, non-life, direct insurance and re-insurance),
regardless of the type of entities that issue them as well as to certain
guarantees and financial instruments with discretionary participation
features; a few scope exceptions will apply. The overall objective of IFRS 17
is to provide a comprehensive accounting model for insurance contracts that is
more useful and consistent for insurers, covering all relevant accounting
aspects. IFRS 17 is based on a general model, supplemented by:
• a specific adaptation for contracts with direct participation
features (the variable fee approach)
• a simplified approach (the premium allocation approach) mainly for
short-duration contracts
The new standard had no impact on the Group's consolidated financial
statements.
Definition of Accounting Estimates - Amendments to IAS 8 Accounting Policies,
Changes in Accounting Estimates and Errors ("IAS 8")
The amendments to IAS 8 clarify the distinction between changes in accounting
estimates, changes in accounting policies and the correction of errors. They
also clarify how entities use measurement techniques and inputs to develop
accounting estimates.
The amendments had no impact on the Group's consolidated financial statements.
Disclosure of Accounting Policies - Amendments to IAS 1 Presentation of
Financial Statements ("IAS 1") and IFRS Practice Statement 2: Making
Materiality Judgements ("IFRS Practice Statement 2")
The amendments to IAS 1 and IFRS Practice Statement 2 provide guidance and
examples to help entities apply materiality judgements to accounting policy
disclosures. The amendments aim to help entities provide accounting policy
disclosures that are more useful by replacing the requirement for entities to
disclose their 'significant' accounting policies with a requirement to
disclose their 'material' accounting policies and adding guidance on how
entities apply the concept of materiality in making decisions about accounting
policy disclosures.
The Group adopted the amendments to IAS 1 and IFRS Practice Statement 2 in the
current year in relation to the Group's disclosures of accounting policies.
International Tax Reform-Pillar Two Model Rules - Amendments to IAS 12 Income
Taxes ("IAS 12")
The amendments to IAS 12 have been introduced in response to the OECD's BEPS
Pillar Two rules and include:
• mandatory temporary exception to the recognition and disclosure of
deferred taxes arising from the jurisdictional implementation of the Pillar
Two model rules; and
• disclosure requirements for affected entities to help users of the
financial statements better understand an entity's exposure to Pillar Two
income taxes arising from that legislation, particularly before its effective
date.
The mandatory temporary exception - the use of which is required to be
disclosed - applies immediately. The remaining disclosure requirements apply
for annual reporting periods beginning on or after 1 January 2023.
The amendments had no impact on the Group's consolidated financial statements
as the Group is not in scope of the Pillar Two model rules as its revenue is
less than €750m per year.
A number of new other standards and amendments to standards have been issued
but are not yet effective for the Group and have not been early adopted. The
application of these new standards and amendments is not expected to have a
material impact on the Group's consolidated financial statements.
(c) Going concern
The Group has prepared its going concern assessment for the period to 31
October 2025 (the "going concern period"), a period greater than twelve months
from the approval of the Group financial statements, to align with the
expected timing of the approval of the Company's subsidiary entities financial
statements where a letter of support is expected to be required from the
Company.
The Group's going concern assessment is based on a forecast of the Group's
future cash flows. Management prepares a base case scenario and a severe but
plausible downside scenario where sensitivities are applied to model the
outcome on the occurrence of downside assumptions explained below. It
considers the Group's principal risks and uncertainties and is dependent on a
number of factors including financial performance, continued access to lending
facilities (see note 23) and the ability to continue to operate the Group's
secured and unsecured debt structure within its financial covenants. Within
the going concern period, three of the Group's debt facilities mature, with a
€5.0m tranche of the Schuldschein loan falling due in January 2025 and a
€10.0m tranche falling due in March 2025 and the €12.8m Saarbrücken
Sparkasse facility falling due in February 2025. No further debt of the Group
matures until June 2026.
The severe but plausible scenario models a potential downturn in the Group's
performance, including the potential impact of downside macro-factors such as
geopolitical instability, future energy shortages, further cost increases due
to inflation, pressures from increasing interest rates and outward yield
movements on the Group's financial position and future prospects. The cash
flow projections incorporate assumptions on future trading performance and
potential valuation movements in order to estimate the level of headroom on
the Group's debt facilities and covenants for loan to value, debt service
cover, EPRA net asset value, unencumbered assets ratios, fixed charge ratios
and occupancy ratios set out within the relevant finance agreements.
The impact of the macro-factors above has placed further pressure on the costs
of the business, however this did not result in any deterioration in the
Group's income streams in the year ended 31 March 2023 or in the year ended 31
March 2024 and asset values remained relatively stable throughout. However,
the Directors continue to be mindful of the challenging macro-factors present
in the market and have assessed the potential severity of the falls in
valuations in the severe but plausible downside scenario in the going concern
period.
The base case and severe but plausible downside scenarios include the
following assumptions applied to both the German and UK portfolios:
Base case:
» 5.5% growth per annum in rent roll at 31 March 2024, principally from
contractual increases in rents and organic growth through lease renewals;
» increasing cost levels in line with forecast inflation of 3% per
annum throughout the going concern period;
» continuation of forecast capex investment;
» continuation of forecast dividend payments in line with historic
dividend payouts;
» payment of contractual loan interest and loan amortisation amounts
refinancing of €27.8m of debt facilities as they fall due; and
» only acquisitions and disposals which are contractually committed are
made, which includes three post balance sheet acquisitions amounting to
£50.1m (€58.6m) in Gloucestershire, UK and the €21.4m acquisition in
Klipphausen and the €21.5m acquisition in Cologne, Germany. These
acquisitions completed in April 2024.
Severe but plausible downside scenario:
» reduction in occupancy and rental income of 10% per annum from the
base case assumptions;
» reduction in service charge recovery of 10% per annum from the base
case assumptions;
» reduction in property valuations of 10% per annum;
» continuation of forecast capex investment;
» continuation of forecast dividend payments in line with historic
dividend payouts; and
» payment of contractual loan interest and loan amortisation amounts,
repayment of €27.8m of debt facilities as they fall due; and
» only acquisitions and disposals which are contractually committed are
made, which includes three post balance sheet acquisitions amounting to
£50.1m (€58.6m) in Gloucestershire, UK, the €21.4m acquisition in
Klipphausen and the €21.5m acquisition in Cologne, both in Germany. These
acquisitions completed in April 2024.
The Directors are of the view that there is a remote possibility of a more
severe scenario arising than the above severe but plausible downside scenario
based upon the Group's track record of performance in challenging scenarios,
most recently through the high inflationary environment in both Germany and
the UK, the Covid-19 pandemic and post-pandemic period. In addition, the Group
tapped its €300.0m corporate bond in May 2024 raising an additional €51.3m
in corporate debt which is included in both base case and severe but plausible
downside scenarios, raised €165.3m in capital in November 2023 and had
secured the refinancing of the €58.3m Deutsche Pfandbriefbank AG and
€170.0m Berlin Hyp AG facilities in advance of their maturity dates.
The severe but plausible downside results in cash trap events occurring on the
Group's occupancy covenant. The cash trap event does not have a material
impact to the Group's cash flows. The Group is not forecasting any further
cash trap or defaulting events in the severe but plausible downside scenario.
In the severe but plausible downside scenario, the Group assumes full
repayment of the maturing loan obligations as they fall due, amounting to
€27.8m in the going concern period. The Group forecasts indicate sufficient
free cash would be available to repay these funds in full and maintain
sufficient liquidity to not require the additional mitigating actions as
outlined below available to it, should the severe but plausible downside
scenario come to pass.
The Group also performed a reverse stress test over the impact of a fall in
its property valuations and income reductions during the going concern period.
This showed that the Group could withstand a fall in valuations of 24%, before
there was a loan to value covenant breach and a reduction of 24% of net
operating income before any income related covenants would breach, levels
which the Group has not seen before. These events are considered to be remote
due to the Company's strong performance throughout the most recent economic
headwinds, with the macroeconomic environment pointing towards stability. The
reductions required for the reverse stress test have never been seen by the
Group.
In each of the scenarios considered for going concern, the Group forecasts
having sufficient free cash available and if required, could utilise available
mitigating actions which would be available to the Group in the going concern
review period, which include restricting non-REIT relating dividends, reducing
capital expenditure or the disposal of assets. The restriction of dividends or
reducing capital expenditure are within the control of the Directors and there
is sufficient time to implement these restrictions, if required. The use of
such mitigating factors are not anticipated to be required.
The Directors have not identified any material uncertainties which may cast
significant doubt on the Group's ability to continue as a going concern for
the duration of the going concern period.
The Directors also evaluated potential events and conditions beyond the going
concern period that may cast significant doubt on the Group's ability to
continue as a going concern, with no significant transactions or events of
material uncertainty identified.
After due consideration of the going concern assessment for the period to 31
October 2025, the Board believes it is appropriate to adopt the going concern
basis in preparing its financial statements.
(d) Basis of consolidation
The consolidated financial information comprises the financial information of
the Group as at 31 March 2024. The financial information of the subsidiaries
is prepared for the same reporting period as the Company, using consistent
accounting policies.
All intra-group balances and transactions and any unrealised income and
expenses arising from intra-group transactions are eliminated in preparing the
consolidated financial statements.
Subsidiaries are fully consolidated from the date of acquisition, being the
date on which the Group obtains control, and continue to be consolidated
until the date that such control ceases.
Non-controlling interests represent the portion of profit or loss and net
assets not held by the Group and are presented separately in the consolidated
income statement and the consolidated statement of comprehensive income and
within equity in the consolidated statement of financial position, separately
from the Company's shareholders' equity.
(e) Acquisitions
Where a property is acquired through the acquisition of corporate interests,
management considers the substance of the assets and activities of the
acquired entity in determining whether the acquisition represents the
acquisition of a business.
The Group accounts for an acquisition as a business combination where an
integrated set of activities is acquired in addition to the property (see
policy in note 2(z)). More specifically, consideration is made of the extent
to which substantive processes are acquired and, in particular, the extent of
services provided by the subsidiary. IFRS 3 Business Combinations ("IFRS 3")
sets out an optional concentration test designed to simplify the evaluation of
whether an acquired set of activities and assets is not a business. An
acquired set of activities and assets is not a business if substantially all
of the fair value of the gross assets acquired is concentrated in a single
identifiable asset or group of similar identifiable assets.
Where such acquisitions are not deemed to be an acquisition of a business,
they are not treated as business combinations. Instead, they are treated as
asset acquisitions, with the cost to acquire the corporate entity being
allocated between the identifiable assets and liabilities of the entity based
on their relative fair values on the acquisition date. Accordingly, no
goodwill arises.
(f) Foreign currency translation
The consolidated financial information is presented in euros, which is the
functional and presentational currency of the Parent Company. For each entity,
the Group determines the functional currency and items included in the
financial statements of each entity are measured using the functional
currency.
Transactions in foreign currencies are initially recorded in the functional
currency at the exchange rate ruling at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies are retranslated into
the functional currency at the exchange rate ruling at the statement of
financial position date. All differences are taken to the statement of profit
and loss. Non‑monetary items that are measured in terms of historical cost
in a foreign currency are translated using the exchange rates at the dates
of the initial transactions. Non-monetary items measured at fair value in a
foreign currency are translated using the exchange rates at the date when the
fair value is determined. The gain or loss arising on translation of
non-monetary items measured at fair value is treated in line with the
recognition of the gain or loss on the change in fair value of the item (i.e.
translation differences on items whose fair value gain or loss is recognised
in other comprehensive income ("OCI") or profit or loss are also recognised in
OCI or profit or loss, respectively).
On consolidation, the assets and liabilities of foreign operations are
translated into euros at the rate of exchange prevailing at the reporting date
and their statements of profit or loss are translated at the exchange rates at
the dates of the transactions, or where appropriate, the average exchange
rates for the period. The foreign exchange differences arising on translation
for consolidation are recognised in OCI. On disposal of a foreign operation,
the component of OCI relating to that particular foreign operation is
reclassified to profit or loss.
Any goodwill arising on the acquisition of a foreign operation and any fair
value adjustments to the carrying amounts of assets and liabilities arising
on the acquisition are treated as assets and liabilities of the foreign
operation and translated at the spot rate of exchange at the reporting date.
(g) Revenue recognition
Rental income
Rental income from operating leases and licence agreements containing leases
is recognised on a straight-line basis over the term of the relevant lease
unless another systematic basis is more representative of the time pattern in
which the benefit derived from the leased asset is diminished. Fixed or
determinable rental increases, which can take the form of actual amounts or
agreed percentages, are recognised on a straight-line basis over the term of
material leases. If the increases are related to a price index to cover
inflationary cost increases, then the policy is to apply the price index from
the date it is effective on a straight-line basis.
The value of all lease incentives (including rent free periods, stepped rents,
indexation clauses and other types of incentive)are spread on a straight-line
basis over the lease term. Where there is a reasonable expectation that the
tenant will exercise break options, the value of rent free periods and all
similar lease incentives is booked up to the break date. The above applies to
both revenues generated from investment properties and managed properties.
Revenue from contracts with customers
Revenue from contracts with customers is recognised when control of the goods
or services is transferred to the customer at an amount that reflects the
consideration to which the Group expects to be entitled in exchange for those
goods or services.
(i) Service charge income
The Group mainly generates revenue from contracts with customers for services
rendered to tenants including management charges and other expenses
recoverable from tenants based on the Group's right to recharge tenants for
costs incurred (with or without markup) on a day-to-day basis ("service
charge income"). These services are specified in the lease agreements and
separately invoiced. Service charge income is recognised as revenue when the
performance obligations of the services specified in the lease agreements are
met.
The individual activities vary significantly throughout the day and from day
to day; however, the nature of the overall promise of providing property
management service remains the same each day. Accordingly, the service
performed each day is distinct and substantially the same. These services
represent a series of daily services that are individually satisfied over time
because the tenants simultaneously receive and consume the benefits provided
by the Group. The actual service provided during each reporting period is
determined using cost incurred as the input method.
Transaction prices are regularly updated and are estimated at the beginning of
each year based on previous costs and estimated spend. Service charge budgets
are prepared carefully to make sure that they are realistic and reasonable.
Variable consideration is only included in the transaction price to the
extent it is highly probable that a significant reversal in the amount of
cumulative revenue recognised will not occur. Performance obligations related
to service charge revenue is discharged by the Company continuously and on a
daily basis, through the provision of utilities and other services to tenants.
Changes in service charge revenue are linked to changes in the cost of
fulfilling the obligation or the value to a tenant at a given period of time.
Accordingly, the variable consideration is allocated to each distinct period
of service (i.e. each day) as it meets the variable consideration allocation
exception criteria.
Service charge expenses are based on actual costs incurred and invoiced
together with an estimate of costs to be invoiced in future periods as receipt
of final invoices from suppliers can take up to twelve months after the end of
the financial period. The estimates are based on expected consumption rates
and historical trends and take into account market conditions at the time of
recording.
Service charge income is based on service charge expense and takes into
account recovery rates which are largely derived from estimated occupancy
levels. Service charge costs related to vacant space are irrecoverable.
The Group acts as a principal in relation to these services, and records
revenue on a gross basis, as it controls the specified goods or services
before transferring them to tenants.
Where amounts invoiced to tenants are greater than the revenue recognised at
the period end date, the difference is recognised as unearned revenue when
the Group has unconditional right to consideration, even if the payments are
non-refundable. Where amounts invoiced are less than the revenue recognised at
the period end date, the difference is recognised as contract assets or, when
the Group has a present right to payment, as receivables albeit unbilled.
In addition to the above, the Group has entered into leases and licensing
arrangements (which meet the definition of a lease under IFRS 16 Leases ("IFRS
16")) where the revenue due from the tenant is an all-inclusive price,
representing lease income (recognised in accordance with IFRS 16) and service
charge income (recognised in accordance with IFRS 15 Revenue from Contracts
with Customers ("IFRS 15")). Management has estimated the allocation of the
revenues using the relevant service charge costs incurred and the occupancy of
the properties where all-inclusive lease and licence arrangements are in
place. The allocation resulted in €25.9m (2023: €24.0m) being recorded as
service charge income.
(ii) Other income
(ii) (a) Fee income
The Group has contractual agreements with its investment in associate for the
management of its properties. This generates fee income which is recognised
when the services are provided to the investment in associate at an amount
that reflects the consideration to which the Group expects to be entitled in
exchange for those services. Income relating to managed properties is
accounted for according to revenue recognition accounting policies set out
above. The Group identifies itself as a principal in this arrangement as it
controls and manages the services provided to its customers.
(ii) (b) Conferencing and catering
The group lets vacant spaces to existing tenants for conferencing &
catering activities under separate agreements to the lease arrangements. This
Income is recognised when control of the goods or services is transferred to
the customer at an amount that reflects the consideration to which the Group
expects to be entitled in exchange for those goods or services.
Interest income
Interest income is recognised as it accrues (using the effective interest
method, which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial instrument).
(h) Leases
Group as lessor
Leases where the Group does not transfer substantially all the risks and
benefits of ownership of the asset are classified as operating leases.
Group as lessee
All contracts that give the Group the right to control the use of an
identified asset over a certain period of time in return for consideration are
considered leases within the meaning of IFRS 16.
For all contracts that meet the definition of leases according to IFRS 16, the
Group, at the commencement date of the lease (i.e. the date the underlying
asset is available for use), recognises lease liabilities equal to the present
value of the future lease payments, discounted to reflect the term-specific
incremental borrowing rate if the interest rate implicit in the lease is not
readily determinable. Lease liabilities are subsequently increased by the
periodic interest expenses and reduced by the lease payments made during the
financial year.
Correspondingly, right of use assets are initially recognised at cost under
IFRS 16 which is the amount of the lease liabilities (plus any advance
payments that have already been made or any initial direct costs).
Subsequently, the right of use assets are generally measured at cost, taking
depreciation (calculated straight-line over the lease term) and impairments
into account and are presented separately in the statement of financial
position except for right of use assets that meet the definition of IAS 40
Investment Property ("IAS 40") which are presented as investment property and
subsequently measured at fair value in line with the measurement rules set out
in IAS 40.
Periods resulting from extension or termination options granted on a
unilateral basis are assessed on a case-by-case basis and are only taken into
account if their use is sufficiently probable.
The Group utilises the recognition exemptions provided by IFRS 16 and does not
apply IFRS 16 to leases with a contractual term of twelve months or less or
to leases in which the underlying asset is of low value (on a case-by-case
basis).
Lease payments associated with short-term leases and with leases of low-value
assets are recognised as expenses on a straight-line basis over the lease
term.
Right of use assets relating to office spaces are depreciated on a
straight-line basis over the shorter of the lease term and the estimated
useful lives of the assets.
(i) Income tax
Certain subsidiaries may be subject to foreign taxes in respect of foreign
sources of income. Sirius Real Estate Limited is a UK resident for tax
purposes. The Group's UK property business is a UK Real Estate Investment
Trust ("REIT"). As a result, the Group's UK property business does not pay UK
corporation tax on its profits and gains from the qualifying rental business
in the UK. Non-qualifying UK profits and gains continue to be subject to
corporation tax as normal.
Current income tax
Current income tax assets and liabilities are measured at the reporting date
at the amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the amount are those
that are enacted or substantively enacted by the reporting date.
Deferred income tax
Deferred income tax is recognised on all temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the
consolidated financial statements, with the following exceptions:
• where the temporary difference arises from the initial recognition of
goodwill or of an asset or liability in a transaction that is not a business
combination that, at the time of the transaction, does not give rise to equal
taxable and deductible temporary differences and affects neither accounting
nor taxable profit or loss;
• in respect of taxable temporary differences associated with
investments in subsidiaries and associates, where the timing of the reversal
of the temporary differences can be controlled and it is probable that the
temporary differences will not reverse in the foreseeable future; and
• deferred tax assets are only recognised to the extent that it is
probable that taxable profit will be available against which the deductible
temporary differences, carried forward tax credits or tax losses can be
utilised.
Deferred tax assets and liabilities are only offset if there is a legally
enforceable right to set off, they are levied by the same taxation authority
and the realisation period is the same. In accordance with IAS 12, deferred
tax assets and liabilities are not discounted, based on tax rates (and tax
laws) that have been enacted or substantively enacted at the reporting date.
The Group has applied the exception in IAS 12 to recognising and disclosing
information about deferred tax assets and liabilities related to Pillar Two
income taxes.
For accounting periods beginning on or after 1 January 2023 IASB ED/2019/5
amended the application of the initial recognition exemption for transactions
giving rise to offsetting deferred tax assets and deferred tax liabilities. In
respect of IFRS 16, the Group adopted the amendments to the initial
recognition exemption under IAS 12 already in the year ended 31 March 2022 and
recognises a deferred tax asset in respect of the IFRS 16 lease liabilities
and a deferred tax liability in respect of IFRS 16 right of use, resulting in
a net deferred tax asset for the year ended 31 March 2023.
The Group has applied the exception in IAS 12 to recognising and disclosing
information about deferred tax assets and liabilities related to Pillar Two
income taxes.
(j) Sales tax
Revenues, expenses, assets and liabilities are recognised net of the amount of
sales tax except:
• where the sales tax incurred on a purchase of assets or services is
not recoverable from the taxation authority, in which case the sales tax is
recognised as part of the cost of acquisition of the asset or as part of the
expense item as applicable; and
• receivables and payables that are stated with the amount of sales tax
included.
The net amount of sales tax recoverable from, or payable to, the taxation
authority is included as part of receivables or payables in the statement of
financial position.
(k) Investment properties
Investment properties are properties that are either owned by the Group or
held under a lease which are held for long-term rental income and/or capital
appreciation.
Investment properties owned by the Group are initially recognised at cost,
including transaction costs when the control of the property is transferred.
Where recognition criteria are met, the carrying amount includes subsequent
costs to add to or replace part of an investment property. Subsequent to
initial recognition, investment properties are stated at fair value, which
reflects market conditions at the reporting date as determined by
professional external valuer. Gains or losses arising from changes in
the fair values of investment properties are included in the income statement
in the period in which they arise.
The German properties are valued on the basis of a ten to fourteen year
discounted cash flow model supported by comparable evidence. The discounted
cash flow calculation is a valuation of rental income considering
non-recoverable costs and applying a discount rate for the current income
risk over a ten to fourteen year period. After ten to fourteen years, a
determining residual value (exit scenario) is calculated, discounted to
present value.
The UK properties are valued in accordance with the RICS Traditional Red Book
valuation methodology, where the income being generated is capitalised by an
appropriate yield. Yields are based on comparable evidence of similar quality
assets which have traded in the open market. The yield applied reflects the
age, location, ownership, customer base and agreement type.
Investment properties relating to leased assets are recognised in accordance
with IFRS 16 (see policy in note 2(h)). Subsequent to initial recognition,
investment properties relating to leased assets are stated at fair value,
which reflects market conditions at the reporting date. Gains or losses
arising from changes in the fair values of investment properties are included
in the income statement in the period in which they arise.
The fair value of investment properties relating to leased assets as at 31
March 2024 and 31 March 2023 have been arrived at on the basis of a valuation
carried out at that date by management. The valuation is based upon
assumptions including future rental income and expenditure in accordance with
the conditions of the related lease agreements. The properties are valued on
the basis of a discounted cash flow model with the measurement period equal to
the term of the lease agreements.
(l) Disposals of investment property
Investment property disposals are recognised when control of the property
transfers to the buyer, which typically occurs on the date of completion.
Profit or loss arising on disposal of investment properties is calculated by
reference to the most recent carrying value of the asset adjusted for
subsequent capital expenditure.
(m) Assets held for sale and disposal groups
(i) Investment properties held for sale
Investment properties held for sale are separately disclosed at the asset's
fair value. In order for an investment property held for sale to be
recognised, the following conditions must be met:
• the asset must be available for immediate sale in its present
condition and location;
• the asset is being actively marketed;
• the asset's sale is expected to be completed within twelve months of
classification as held for sale;
• there must be no expectation that the plan for selling the asset
will be withdrawn or changed significantly; and
• the successful sale of the asset must be highly probable.
(ii) Disposal groups
The Group classifies non-current assets and disposal groups as held for sale
if their carrying amounts will be recovered principally through a sale
transaction rather than through continuing use. Non-current assets and
disposal groups classified as held for sale are measured at the lower of
their carrying amount and fair value less costs to sell. Costs to sell are the
incremental costs directly attributable to the disposal of a disposal group,
excluding finance costs and income tax expense.
The criteria for held for sale classification is regarded as met only when the
sale is highly probable and the disposal group is available for immediate sale
in its present condition. Actions required to complete the sale should
indicate that it is unlikely that significant changes to the sale will be made
or that the decision to sell will be withdrawn. Management must be committed
to the plan to sell the asset with the sale expected to be completed within
one year from the date of the classification.
Property, plant and equipment and intangible assets are not depreciated or
amortised once classified as held for sale.
Assets and liabilities classified as held for sale are presented separately in
the statement of financial position.
Additional disclosures are provided in note 14.
(n) Plant and equipment
Recognition and measurement
Items of plant and equipment are stated at historical cost less accumulated
depreciation and any impairment loss.
Depreciation
Where parts of an item of plant and equipment have different useful lives,
they are accounted for as separate items of plant and equipment.
Depreciation is charged in the income statement on a straight-line basis over
the estimated useful lives of an item of the fixed assets. The estimated
useful lives are as follows:
Plant and equipment three to ten years
Fixtures and fittings three to fifteen years
Depreciation methods, useful lives and residual values are reviewed at each
reporting date.
(o) Intangible assets
The Group recognises only acquired intangible assets. These intangibles are
valued at cost.
The Group recognises both internally developed and acquired intangible assets.
These intangibles are valued at cost.
Intangible assets acquired separately are measured on initial recognition at
cost. Following initial recognition, intangible assets are carried at cost
less any accumulated amortisation and accumulated impairment losses.
Intangible assets with a definite useful life are amortised on a straight-line
basis over their respective useful lives. Their useful lives are between three
and five years. Any amortisation of these assets is recognised as such under
administrative expenses in the consolidated income statement.
Intangible assets with an indefinite useful life, including goodwill, are not
amortised.
Development expenditures on an individual project are recognised as an
intangible asset when the Group can demonstrate:
• the technical feasibility of completing the intangible asset so that
the asset will be available for use or sale;
• its intention to complete and its ability and intention to use or
sell the asset;
• how the asset will generate future economic benefits;
• the availability of resources to complete the asset; and
• the ability to measure reliably the expenditure during development.
Following initial recognition of the development expenditure as an asset, the
asset is carried at cost less any accumulated amortisation and accumulated
impairment losses. Amortisation of the asset begins when development is
complete, and the asset is available for use. It is amortised over the period
of expected future benefit. Amortisation is recorded in cost of sales. During
the period of development, the asset is tested for impairment annually.
(p) Trade and other receivables
Rent and service charge receivables and any contract assets do not contain
significant financing components and are measured at the transaction price.
Other receivables are initially measured at fair value plus transaction costs.
Subsequently, trade and other receivables are measured at amortised cost and
are subject to impairment (see note 2(x)). The Group applies the simplified
impairment model of IFRS 9 Financial Instruments in order to determine
expected credit losses in trade and other receivables, including lease
incentives.
The Group assesses on a forward-looking basis the expected credit losses
associated with its trade and other receivables. A provision for impairment
is made for the lifetime expected credit losses on initial recognition of the
receivable. If collection is expected in more than one year, the balance is
presented within non-current assets.
(q) Treasury Shares and shares issued to the Employee Benefit Trust
Own equity instruments are deducted from equity. No gain or loss is recognised
in the income statement on the purchase, sale, issue or cancellation of the
Group's equity instruments.
(r) Share-based payments
The grant date fair value of share-based payment awards granted to employees
is recognised as an employee expense, with a corresponding increase in
equity, over the period that the employees unconditionally become entitled to
the awards.
The amount recognised as an expense is adjusted to reflect the number of
awards for which the related service and non-market vesting conditions are
expected to be met, such that the amount ultimately recognised as an expense
is based on the number of awards that meet the related service and non-market
performance conditions at the vesting date.
(s) Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand, demand deposits
and other short-term, highly liquid investments with original maturities of
three months or less that are readily convertible to a known amount of cash
and are subject to an insignificant risk of change in value. Cash is measured
at amortised cost.
(t) Bank borrowings
Interest-bearing bank loans and borrowings are initially recorded at fair
value net of directly attributable transaction costs.
Subsequent to initial recognition, interest-bearing loans and borrowings are
measured at amortised cost using the effective interest rate method.
When debt refinancing exercises are carried out, existing liabilities will be
treated as being extinguished when the new liability is substantially
different from the existing liability. In making this assessment, the Group
will consider the transaction as a whole, taking into account both qualitative
and quantitative characteristics in order to make the assessment.
(u) Trade payables
Trade payables are initially measured at fair value and are subsequently
measured at amortised cost, using the effective interest rate method.
(v) Equity instruments
Equity instruments issued by the Company are recorded at the proceeds
received, net of direct issue costs.
(w) Dividends
Interim dividend distributions to shareholders are recognised in the financial
statements when paid. Final dividend distributions to the Company's
shareholders are recognised as a liability in the consolidated financial
information in the period in which the dividends are approved by the
shareholders. The final dividend relating to the year ended 31 March 2024 will
be approved and recognised in the financial year ending 31 March 2025.
(x) Impairment excluding investment properties
(i) Financial assets
A financial asset (excluding financial assets at fair value through profit and
loss) is assessed at each reporting date to determine whether there is any
impairment. The Group recognises an allowance for expected credit losses
("ECLs") for all receivables and contract assets held by the Group. ECLs are
based on the difference between the contractual cash flows due in accordance
with the contract and all the cash flows that the Group expects to receive,
discounted at an approximation of the original effective interest rate. The
expected cash flows will include cash flows from the sale of collateral held
or other credit enhancements that are integral to the contractual terms and
that are not recognised separately by the Group.
For rent and service charge receivables and any contract assets, the Group
applies a simplified approach in calculating ECLs. The Group does not track
changes in credit risk, but instead recognises a loss allowance based on
lifetime ECLs at each reporting date (i.e. a loss allowance for credit losses
expected over the remaining life of the exposure, irrespective of the timing
of the default). In determining the ECLs the Group takes into account any
recent payment behaviours and future expectations of likely default events
(i.e. not making payment on the due date) based on individual customer credit
ratings, actual or expected insolvency filings or Company voluntary
arrangements and market expectations and trends in the wider macroeconomic
environment in which our customers operate.
Impairment losses are recognised in the income statement. For more information
refer to note 6. Trade and other receivables are written off once all avenues
to recover the balances are exhausted and there is no expectation of recovery.
(ii) Non-financial assets
The carrying amounts of the Group's non-financial assets, other than
investment property, are reviewed at each reporting date to determine whether
there is any indication of impairment. If any such indication exists, then the
asset's recoverable amount is estimated.
The recoverable amount of an asset or cash-generating unit is the greater of
its value in use and its fair value less costs to sell. In assessing value in
use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset. For the purpose of
impairment testing, assets are grouped together into the smallest group of
assets that generate cash inflows from continuing use that are largely
independent of the cash inflows of other assets or groups of assets (the
"cash-generating unit").
An impairment loss is recognised if the carrying amount of an asset or
cash-generating unit exceeds its estimated recoverable amount. Impairment
losses are recognised in the income statement. Impairment losses recognised in
profit or loss in respect of cash-generating units are allocated first to
reduce the carrying amount of any goodwill allocated to the units and then to
reduce the carrying amount of the other assets in the unit (or group of
units) on a pro rata basis.
(y) Current versus non-current classification
The Group presents assets and liabilities in the statement of financial
position based on current/non-current classification, except for deferred tax
assets and liabilities which are classified as non-current assets and
liabilities. An asset is current when it is:
• expected to be realised or intended to be sold or consumed in the
normal operating cycle;
• held primarily for the purpose of trading;
• expected to be realised within twelve months after the reporting
period; or
• cash or cash equivalent unless restricted from being exchanged or
used to settle a liability for at least twelve months after the reporting
period.
All other assets are classified as non-current.
A liability is current when:
• it is expected to be settled in the normal operating cycle;
• it is held primarily for the purpose of trading;
• it is due to be settled within twelve months after the reporting
period; or
• there is no unconditional right to defer the settlement of the
liability for at least twelve months after the reporting period.
The Group classifies all other liabilities as non-current.
(z) Business combinations
(i) Subsidiary undertakings
Business combinations are accounted for using the acquisition method at the
acquisition date, which is the date on which control is transferred to the
Group. Control is achieved when the Group is exposed, or has rights, to
variable returns from its involvement with the investee and has the ability
to affect those returns through its power over the investee. In assessing
control, the Group takes into consideration potential voting rights that
currently are exercisable, as well as other factors including Board
representation. The financial statements of subsidiaries are included in the
consolidated financial statements from the date that control passes.
(ii) Associates
Associates are those entities over which the Group has significant influence,
but which are not subsidiary undertakings or joint ventures. The results and
assets and liabilities of associates are incorporated in these financial
statements using the equity method of accounting. Investments in associates
are carried in the balance sheet at cost as adjusted by post-acquisition
changes in the Group's share of the net assets of the associate, less any
impairment in the value of individual investments.
(aa) Non-IFRS measures
The Directors have chosen to disclose EPRA earnings, EPRA net asset value
metrics and EPRA loan to value, which are widely used alternative metrics to
their IFRS equivalents (further details on EPRA best practice recommendations
can be found at www.epra.com). Note 11 to the financial statements includes a
reconciliation of basic and diluted earnings to EPRA earnings. Note 12 to the
financial statements includes a reconciliation of net assets to EPRA net asset
value metrics. Note 23 to the financial statements includes a calculation of
EPRA loan to value ratio.
The Directors are required, as part of the JSE Limited Listing Requirements,
to disclose headline earnings; accordingly, headline earnings are calculated
using basic earnings adjusted for revaluation gain/loss and related tax,
gain/loss on disposal of properties and related tax, non-controlling interest
("NCI") relating to revaluation (net of related tax), NCI relating to
gain/loss on disposal properties (net of related tax) and revaluation
gain/loss on investment property relating to associates and related tax. Note
11 to the financial statements includes a reconciliation between IFRS and
headline earnings.
The Directors have chosen to disclose adjusted earnings in order to provide an
alternative indication of the Group's underlying business performance as
disclosed in note 11 of the financial statements.
The Directors have chosen to disclose adjusted profit before tax and funds
from operations in order to provide an alternative indication of the Group's
underlying business performance and to facilitate the calculation of its
dividend pool; a reconciliation between profit before tax and funds from
operations is included within note 28 to the financial statements. Within
adjusted profit before tax are adjusting items as described in note 11 of the
financial statements gross of related tax.
Further details on non-IFRS measures can be found in the Business analysis
section of this document.
3. Significant accounting judgements, estimates, assumptions and other sources
of estimation uncertainty
Judgements
In the process of applying the Group's accounting policies, which are
described in note 2, the Directors have made the following judgements that
have the most significant effect on the amounts recognised in the financial
information:
Acquisition and disposal of properties
Property transactions can be complex in nature and material to the financial
statements. To determine when an acquisition or disposal should be recognised,
management considers whether the Group assumes or relinquishes control of the
property, and the point at which this is obtained or relinquished.
Consideration is given to the terms of the acquisition or disposal contracts
and any conditions that must be satisfied before the contract is fulfilled. In
the case of an acquisition, management must also consider whether the
transaction represents an asset acquisition or business combination.
Estimates and assumptions
Key estimates
The key assumptions concerning the future and other key sources of estimation
uncertainty at the reporting date that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within
the next financial year are discussed below:
Valuation of owned and leased investment properties (including those
recognised within assets held for sale or a disposal group)
The fair value of the Group's owned investment properties was determined by
Cushman & Wakefield LLP (2023: Cushman & Wakefield LLP), an
independent valuer. After adjusting investment properties for lease incentive
accounting, the book value of investment properties excluding assets held for
sale is shown as €2,186.7m (2023: €2,098.5m) as disclosed in note 13.
The Cushman & Wakefield LLP valuation approach is explained in note 2(k).
The fair value of the Group's leased investment properties was determined by
management. The book value of leased investment properties is shown as
€23.9m (2023: €24.5m) as disclosed in note 13.
As a result of the level of estimation used in arriving at the market
valuations, the amounts which may ultimately be realised in respect of any
given property may differ from the valuations shown on the statement of
financial position. Refer to note 13 for further information, including
sensitivity analysis.
Cash flow and covenant compliance forecasts
Cash flow forecasts and covenant compliance forecasts are prepared by
management to assess the going concern assumption and viability of the Group.
Estimations of future revenue and expenditure are made to determine the
expected cash inflows and outflows, considering expectations for occupancy
levels, forecast expenditure and the current market climate. The impact of the
forecasted cash flows and underlying property valuations are considered when
assessing forecast covenant compliance and anticipated levels of headroom on
the Group's debt facilities.
Refer to note 2(c) for further details, which includes the assessment of
forecasted cash flows and covenant compliance in management's going concern
assessment.
Other sources of estimation uncertainty
The following areas of estimation uncertainty are not presented to comply with
the requirements of paragraph 125 of IAS 1 as it is not expected there is a
risk of a material adjustment to the carrying amount of assets and liabilities
within the next financial year. They are presented as additional disclosure of
estimates used in the accounts.
Sustainability
In preparing the financial statements, Management considered the impact of
climate change, taking into account the relevant disclosures in the Strategic
Report, including those made in accordance with the recommendations of the
Taskforce on Climate-related Financial Disclosures. The Group also considered
the work performed to date in preparing its potential net zero pathway for the
German portfolio to 2045 based on the CRREM ("Carbon Risk Real Estate
Monitor") methodology, the leading global standard for operational
decarbonisation of real estate assets, and in line with the Science Based
Target initiative ("SBTi") and the Energy Performance Certificate ("EPC")
regulatory requirements for the UK. At the time of preparing the financial
statements, the Group expects a limited exposure in relation to the investment
properties, based on the current climate-related requirements. On this basis,
the Directors concluded that climate change did not have a material impact on
the financial reporting judgements and estimates for the period, consistent
with this assessment this is not expected to have a significant impact on the
Group's going concern of viability assessment.
4. Operating segments
Information on each operating segment based on the geographical location in
which the Group operates is provided to the chief operating decision maker,
namely the Group's Senior Management Team, on an aggregated basis and
represented as operating profit and expenses.
The investment properties that the Group owns are aggregated into segments
with similar economic characteristics such as the nature of the property, the
products and services it provides, the customer type for the product served,
and the method in which the services are provided. The Group's Senior
Management Team considers that this is best achieved through the operating
segments of the German assets and the UK assets. The Group's investment
properties are considered to be their own segment. The properties at each
location (Germany and the UK) have similar economic characteristics. These
have been aggregated into two operating segments based on location in
accordance with the requirements of IFRS 8 Operating Segments. The Group's
Senior Management Team considers the two locations to be separate segments.
Further disaggregation of the investment properties is disclosed in note 13
owing to the range in values of key inputs and assumptions underpinning the
property valuation. Consequently, the Group is considered to have two
reportable operating segments, as follows:
• Germany; and
• the UK.
Consolidated information by segment is provided on a net operating income
basis, which includes revenues made up of gross rents from third parties and
direct expenses. All of the gains/losses on property valuations, gains/losses
on property disposals, movement in expected credit loss provision,
administrative expenses (with depreciation and amortisation shown separately)
and the Group's share of profit of associates, are separately disclosed as
part of operating profit. Group finance income and expenses (with amortisation
of capitalised finance costs shown separately) and change in fair value
of derivative financial instruments are also disclosed separately.
Income taxes and depreciation are not reported to the Senior Management Team
on a segmented basis. There are no sales between segments.
There is no single tenant that makes up more than 10% of each segment's
revenue or Group revenue.
Year ended Year ended
31 March 2024 31 March 2023
Germany UK Total Germany UK Total
€m €m €m €m €m €m
Rental income from investment properties 127.6 37.4 165.0 121.9 32.6 154.5
Rental income from managed properties - - - 5.6 - 5.6
Other income from investment properties 3.9 0.9 4.8 3.6 0.7 4.3
Service charge income from investment properties 73.4 25.9 99.3 66.6 24.0 90.6
Other income from managed properties 4.6 - 4.6 5.3 - 5.3
Service charge income from managed properties 15.1 - 15.1 9.8 - 9.8
Revenue 224.6 64.2 288.8 212.8 57.3 270.1
Direct costs (99.3) (23.7) (123.0) (96.7) (20.0) (116.7)
Net operating income 125.3 40.5 165.8 116.1 37.3 153.4
Gain/(loss) on revaluation of investment properties 40.8 (28.6) 12.2 (3.9) (5.9) (9.8)
Gain on disposal of properties 0.9 (0.0) 0.9 - 4.7 4.7
Depreciation and amortisation (4.1) (1.0) (5.1) (4.2) (1.3) (5.5)
Movement in expected credit loss provision 0.9 (0.0) 0.9 (1.0) - (1.0)
Other administrative expenses (34.9) (9.7) (44.6) (36.1) (6.7) (42.8)
Share of profit of associates 0.6 - 0.6 2.6 - 2.6
Operating profit 129.5 1.2 130.7 73.5 28.1 101.6
Finance income 5.5 1.1 6.6 2.5 0.3 2.8
Amortisation of capitalised finance costs (3.5) - (3.5) (3.3) - (3.3)
Other finance expense (13.0) (4.3) (17.3) (10.8) (4.2) (15.0)
Change in fair value of derivative financial instruments (1.3) - (1.3) 0.9 - 0.9
Net finance costs (12.3) (3.2) (15.5) (10.7) (3.9) (14.6)
Segment profit/(loss) for the year before tax 117.2 (2.0) 115.2 62.8 24.2 87.0
31 March 2024 31 March 2023
Germany UK Total Germany UK Total
€m €m €m €m €m €m
Segment assets
Investment properties 1,735.0 475.6 2,210.6 1,691.6 431.4 2,123.0
Investment in associates 25.2 - 25.2 26.7 - 26.7
Other non-current assets(1) 20.8 2.9 23.7 21.9 3.8 25.7
Total segment non-current assets 1,781.0 478.5 2,259.5 1,740.2 435.2 2,175.4
(1) Consists of plant and equipment, intangible assets and right of use
assets.
5. Revenue
Year ended Year ended
31 March 2024 31 March 2023
€m €m
Rental income from investment properties 165.0 154.5
Rental income from managed properties - 5.6
Other income from investment properties 4.8 4.3
Service charge income from investment properties 99.3 90.6
Other income from managed properties 4.6 5.3
Service charge income from managed properties 15.1 9.8
Total revenue 288.8 270.1
The Group manages properties for the investment in associate. As part of this,
service charge income from managed properties is generated which relates to
costs the Group incur to provide the investment with associate with necessary
services.
A reconciliation of the revenue from contracts with customers with the amounts
disclosed in the segment information (see note 4) is as follows:
Year ended Year ended
31 March 2024 31 March 2023
Germany UK Total Germany UK Total
€m €m €m €m €m €m
Rental income from investment properties 127.6 37.4 165.0 121.9 32.6 154.5
Rental income from managed properties - - - 5.6 - 5.6
Total rental income 127.6 37.4 165.0 127.5 32.6 160.1
Other income from investment properties 3.9 0.9 4.8 3.6 0.7 4.3
Service charge income from investment properties 73.4 25.9 99.3 66.6 24.0 90.6
Other income from managed properties 4.6 - 4.6 5.3 - 5.3
Service charge income from managed properties 15.1 - 15.1 9.8 - 9.8
Total revenue from contracts with customers 97.0 26.8 123.8 85.3 24.7 110.0
Total revenue 224.6 64.2 288.8 212.8 57.3 270.1
6. Operating profit
The following items have been charged in arriving at operating profit:
Direct costs
Year ended Year ended
31 March 2024 31 March 2023
€m €m
Service charge costs relating to investment properties 99.6 92.8
Costs relating to managed properties 16.3 17.4
Non-recoverable maintenance costs 7.1 6.5
Direct costs 123.0 116.7
Movement in expected credit loss provision
Year ended Year ended
31 March 2024 31 March 2023
€m €m
Expected credit loss recognised 7.8 8.7
Expected credit loss reversed (8.7) (7.7)
Movement in expected credit loss provision (see note 24) (0.9) 1.0
The expected credit loss provision has decreased during the year mainly due to
the decrease of gross trade receivables.
Administrative expenses
Year ended Year ended
31 March 2024 31 March 2023
€m €m
Audit and non-audit fees to audit firm 1.4 1.7
Legal and professional fees 5.5 6.0
Other administration costs(1) 4.1 5.7
Share-based payments 5.0 5.5
Employee costs 23.8 19.4
Director fees and expenses 0.7 0.7
Depreciation of plant and equipment (see note 15) 1.8 2.1
Amortisation of intangible assets (see note 16) 1.5 1.3
Depreciation of right of use assets (see note 17) 1.8 2.1
Marketing 3.2 3.1
Other expenses not included in FFO 0.9 0.7
Administrative expenses 49.7 48.3
(1) In Other administration costs the Group recognised €0.2m related to
losses from disposal of PPE (see note 15).
Other administration costs include net foreign exchange gains of €3.4m as a
result of increasing British pound sterling ("GBP") rates throughout the year
(2023: €0.2m loss as a result of declining GBP rates throughout the year).
Employee costs as stated above relate to costs which are not recovered through
service charge.
Other expenses not included in FFO relate to the following:
Year ended Year ended
31 March 2024 31 March 2023
€m €m
Other fees for projects(1) - 2.4
Legal case costs(2) 0.9 0.4
Lease agreement termination fees(3) - 0.9
Decrease in tax liabilities recognised on acquisition of the BizSpace Group(4) - (3.0)
Total 0.9 0.7
Other expenses not included in FFO are items outside the normal course of
business and therefore have been identified as expenses not included in the
FFO calculation.
(1) The other fees for projects amounting to €2.4m for the year ended 31
March 2023 were related to capital management measures undertaken by the
Group.
(2) The legal case costs amounting to €0.9m relate to the legal case
mentioned in note 22 (2023: €0.4m).
(3) The lease agreement termination fee amounting to €0.9m for the twelve
month period ended 31 March 2023 relate to what was paid in compensation for
early termination of a rental contract at the end of July 2022 within the UK
segment of the Group.
(4) In the prior year, the Group identified an error in the accrual of tax
liabilities arising in the BizSpace Group as at 31 March 2022, resulting in an
overstatement of the tax liability of €5.0m, of which €3.0m arose on
acquisition. These were assessed as not being material to the 31 March 2022
financial statements and the reduction in the liability was recorded in the 31
March 2023 financial statements. The amounts were recorded within other
expenses not included in FFO and the taxation (see note 10) lines of the
income statement.
Audit fees
The following services have been provided by the Group's auditor:
Year ended Year ended
31 March 2024 31 March 2023
€m €m
Audit fees to audit firm:
Audit of consolidated financial statements 1.0 1.0
Audit of subsidiary undertakings 0.3 0.2
Total audit fees 1.3 1.2
Audit related assurance services 0.1 0.1
Other assurance services - 0.4
Total assurance services 0.1 0.5
Total fees for non-audit services 0.1 0.5
Total fees 1.4 1.7
7. Employee costs and numbers
Year ended Year ended
31 March 2024 31 March 2023
€m €m
Wages and salaries 33.9 30.7
Social security costs 5.0 4.3
Defined contribution pension scheme 0.4 0.5
Other employment costs 0.9 0.9
Total 40.2 36.4
Included in the costs related to wages and salaries for the year are expenses
of €5.0m (2023: €5.5m) relating to the granting or award of shares (see
note 8). The costs for all periods include those relating to Executive
Directors.
All employees are employed directly by one of the following Group subsidiary
companies: Sirius Facilities GmbH, Sirius Facilities (UK) Limited, Curris
Facilities & Utilities Management GmbH, SFG NOVA GmbH, Sirius Finance
(Cyprus) Limited, BizSpace Limited, BizSpace II Limited, M25 Business Centres
Limited and Sirius Corporate Services B.V. The average number of people
employed by the Group during the year was 428 (2023: 421), expressed in
full-time equivalents. In addition, as at 31 March 2024, the Board of
Directors consists of six Non-Executive Directors (2023: six) and two
Executive Directors (2023: two).
8. Employee schemes
Equity-settled share-based payments
2018 LTIP
The LTIP for the benefit of the Executive Directors and the Senior Management
Team was approved in 2018. Awards granted under the LTIP are made in the form
of nil-cost options which vest after the three year performance period with
vested awards being subject to a further holding period of two years. Awards
are split between ordinary and outperformance awards. Ordinary awards carry
both adjusted net asset value per share ("TNR") (two-thirds of award) and
relative total shareholder return ("TSR") (one-third of award) performance
conditions and outperformance awards carry a sole TNR performance condition.
Awards are equity settled. The employees' tax obligation will be determined
upon the vesting date of the share issue.
The following assumptions were used in calculating the fair value per share
for the TNR and TSR elements of the awards that were granted:
June 2019 June 2020
grant
grant
TNR TSR TNR TSR
Valuation methodology Black-Scholes Monte-Carlo Black-Scholes Monte-Carlo
Calculation for 2/3 ordinary award/ 1/3 ordinary 2/3 ordinary 1/3 ordinary award
outperformance award award award
Total charge for the award - €m 2.1 2.3
Expected lapse rate 0% 0% 0% 0%
Share price at grant date - € 0.73 0.73 0.84 0.84
Exercise price - € nil nil nil nil
Expected volatility - %(1) 23.8 23.8 38.5 38.5
Performance projection period - years 2.80 2.67 2.79 2.67
Expected dividend yield - % 4.56 4.56 4.28 4.28
Risk-free rate based on European (0.695) p.a. (0.695) p.a. (0.68) p.a. (0.68) p.a.
Expected outcome of performance conditions - % 100/25 100 88.8 n/a
Fair value per share - € 0.643 0.340 0.745 0.564
Weighted average fair value of share - €(2) 0.54 0.68
Number of shares granted 2,506,667/690,000 1,253,333(3) 2,400,000 1,200,000
Forfeited during the performance period - 500,000
(1) Assumptions considered in this model include: expected volatility of
the Company's share price, as determined by calculating the historical
volatility of the Company's share price over the period immediately prior to
the date of grant and commensurate with the expected life of the awards;
dividend yield based on the actual dividend yield as a percentage of the share
price at the date of grant; performance projection period; risk-free rate; and
correlation between comparators.
(2) Charges for the awards are based on fair values calculated at the
grant date and expensed on a straight-line basis over the period that
individuals are providing service to the Group in respect of the awards.
(3) Another 93,039 share awards have been granted throughout the
performance period as part of dividend equivalents.
The June 2019 grant vested on 18 July 2022. Vesting was at partial level for
all participants resulting in the exercise of 1,620,093 shares with a weighted
average share price of €1.02 at the date of exercise. 1,391,585 shares have
been surrendered in relation to the partial settlement of certain
participants' tax liabilities arising in respect of the vesting. An amount of
€1.7m was paid for the participants' tax liabilities.
The remaining 1,531,361 shares vested on 23 November 2022. Final vesting
resulted in the exercise of 811,621 shares with a weighted average share price
of €1.02 at the date of exercise. 719,740 shares have been surrendered in
relation to the settlement of certain participants' tax liabilities arising in
respect of the vesting. An amount of €0.8m was paid for the participants'
tax liabilities in the year ended 31 March 2024.
The June 2020 grant vested on 22 May 2023. Vesting resulted in the exercise of
1,859,000 shares with a weighted average share price of €1.02 at the date of
exercise. 1,241,000 shares have been surrendered in relation to the partial
settlement of certain participants' tax liabilities arising in respect of the
vesting. An amount of €1.3m was paid for the participants' tax liabilities.
2021 LTIP
The LTIP for the benefit of the Executive Directors and the Senior Management
Team was approved in 2021. Awards granted under the LTIP are made in the form
of nil-cost options which vest after the three year performance period with
vested awards being subject to a further restricted period of two years when
shares acquired on exercise cannot be sold. Awards are subject to TNR
(two-thirds of award) and relative TSR (one-third of award) performance
conditions. Awards are equity settled. The employees' tax obligation will be
determined upon the vesting date of the share issue.
The following assumptions were used in calculating the fair value per share
for the TNR and TSR elements of the awards that were granted:
August 2021 July 2022 June 2023 September 2023
grant
grant grant grant
TNR TSR TNR TSR TNR TSR TNR TSR
Valuation methodology Black-Scholes Monte-Carlo Black-Scholes Monte-Carlo Black-Scholes Monte-Carlo Black-Scholes Monte-Carlo
Calculation for 2/3 ordinary award 1/3 ordinary award 2/3 ordinary award 1/3 ordinary award 2/3 ordinary award 1/3 ordinary award 2/3 ordinary award 1/3 ordinary award
Total charge for the award - €m 4.7 2.6 2.9 0.8
Expected lapse rate 0% 0% 0% 0% 0% 0% 0% 0%
Share price at grant date - € 1.39 1.39 1.05 1.05 1.04 1.04 1.03 1.03
Exercise price - € nil nil nil nil nil nil nil nil
Expected volatility - %(1) 40.5 40.5 41.2 41.2 32.7 32.7 31.4 31.4
Expected life - years 2.91 2.91 2.95 2.95 2.97 2.97 2.68 2.68
Performance projection period - years 2.66 2.66 2.70 2.70 2.81 2.81 2.52 2.52
Expected dividend yield - % 2.79 2.79 4.21 4.21 5.52 5.52 5.47 5.47
Risk-free rate based on European treasury bonds rate of return - % (0.817) p.a. (0.817) p.a. 0.609 p.a. 0.609 p.a. 2.65 p.a. 2.65 p.a. 3.05 p.a. 3.05 p.a.
Fair value per share - € 1.28 (2) 0.84 (3) 0.93 (2) 0.40 (3) 0.88(2) 0.59(3) 0.89 (2) 0.71 (3)
Weighted average fair value of share - €(4) 1.13 0.75 0.77 0.83
Number of shares granted 2,769,413 1,384,706 2,320,019 1,160,009 2,462,171 1,231,086 604,001 302,001
Forfeited during the performance period 725,000 635,000 - -
(1) Expected volatility of the Company's share price was determined by
calculating the historical volatility of the Company's share price over the
period immediately prior to the date of grant, commensurate with the term to
the end of the performance period.
(2) In accordance with IFRS 2 Share-based Payment ("IFRS 2"), TNR is classed
as a non-market performance condition. As such, the fair value has been
calculated using a Black-Scholes model and does not take the expected outcome
of the performance condition into account. The Company currently estimates the
expected vesting outcome for the TNR award to be 100%.
(3) In accordance with IFRS 2, relative TSR is classed as a market-based
performance condition. As such, projected performance and the likelihood of
achieving the condition have been taken into account when calculating the fair
value using a Monte-Carlo model. The model also uses assumptions for the
expected volatility of comparator companies, the pairwise correlation between
comparator companies and TSR performance between the start of the performance
period and the date of grant.
(4) Charges for the awards are based on fair values calculated at the grant
date and expensed on a straight-line basis over the period that individuals
are providing service to the Group in respect of the awards.
2021 SIP
A SIP for the benefit of senior employees was approved in 2021. Awards granted
under the SIP are made in the form of a conditional right to receive a
specified number of shares for nil cost which vest after the three year
performance period with vested awards being subject to a further restricted
period of one year when shares cannot be sold. Awards are subject to TNR
(two-thirds of award) and relative TSR (one-third of award) performance
conditions. Awards are equity settled. The employees' tax obligation will be
determined upon the vesting date of the share issue.
The following assumptions were used in calculating the fair value per share
for the TNR and TSR elements of the awards that were granted:
September 2021 April 2022 August 2022
grant grant grant
TNR TSR TNR TSR TNR TSR
Valuation methodology Black-Scholes Monte-Carlo Black-Scholes Monte-Carlo Black-Scholes Monte-Carlo
Calculation for 2/3 ordinary 1/3 ordinary 2/3 ordinary award 1/3 ordinary award 2/3 ordinary award 1/3 ordinary award
award award
Total charge for the award - €m 3.7 0.03 1.5
Expected lapse rate 0% 0% 0% 0% 0% 0%
Share price at grant date - € 1.49 1.49 1.51 1.51 1.13 1.13
Exercise price - € n/a n/a n/a n/a n/a n/a
Expected volatility - %(1) 40.7 40.7 32.5 32.5 29.7 29.7
Expected life - years 3.48 3.48 2.92 2.92 2.58 2.58
Performance 2.56 2.56 2.00 2.00 1.66 1.66
projection period - years
Expected dividend yield - % 2.60 2.60 2.93 2.93 3.96 3.96
Risk-free rate based on European treasury bonds rate of return - % (0.737) p.a. (0.737) p.a. (0.074) p.a. (0.074) p.a. 0.184 p.a. 0.184 p.a.
Fair value per share - € 1.36 (2) 0.92 (3) 1.39 (2) 0.89 (3) 1.02 (2) 0.46 (3)
Weighted average fair value of share - €(4) 1.21 1.22 0.83
Number of shares granted 2,049,667 1,024,833 20,000 10,000 1,166,667 583,333
Forfeited during the performance period 558,500 30,000 380,000
June 2023(UK) June 2023 September 2023
grant grant grant
TNR TSR TNR TSR TNR TSR
Valuation methodology Black-Scholes Monte-Carlo Black-Scholes Monte-Carlo Black-Scholes Monte-Carlo
Calculation for 2/3 ordinary 1/3 ordinary 2/3 ordinary 1/3 ordinary 2/3 ordinary 1/3 ordinary
award award award award award award
Total charge for the award - €m 1.5 0.4 0.4
Expected lapse rate 0% 0% 0% 0% 0% 0%
Share price at grant date - € 1.04 1.04 1.04 1.04 1.03 1.03
Exercise price - € n/a n/a n/a n/a n/a n/a
Expected volatility - %(1) 32.7 32.7 32.7 32.7 31.3 31.3
Expected life - years 3.73 3.73 2.97 2.97 3.49 3.49
Performance 2.81 2.81 2.81 2.81 2.57 2.57
projection period - years
Expected dividend yield - % 5.52 5.52 5.52 5.52 5.60 5.60
Risk-free rate based on European treasury bonds rate of return - % 2.65 p.a. 2.65 p.a. 2.65 p.a. 2.65 p.a. 2.82 p.a. 2.82 p.a.
Fair value per share - € 0.85 (2) 0.56(3) 0.88 (2) 0.60(3) 0.85 (2) 0.6 5(3)
Weighted average fair value of share - €(4) 0.77 0.77 0.78
Number of shares granted 1,333,333 666,667 333,333 166,667 426,667 213,333
Forfeited during the performance period - - -
(1) Expected volatility of the Company's share price was determined by
calculating the historical volatility of the Company's share price over the
period immediately prior to the date of grant, commensurate with the term to
the end of the performance period.
(2) In accordance with IFRS 2, TNR is classed as a non-market performance
condition. As such, the fair value has been calculated using a Black-Scholes
model and does not take the expected outcome of the performance condition into
account. The Company currently estimates the expected vesting outcome for the
TNR award to be 100%.
(3) In accordance with IFRS 2, relative TSR is classed as a market-based
performance condition. As such, projected performance and the likelihood of
achieving the condition have been taken into account when calculating the fair
value using a Monte-Carlo model. The model also uses assumptions for the
expected volatility of comparator companies, the pairwise correlation between
comparator companies and TSR performance between the start of the performance
period and the date of grant.
(4) Charges for the awards are based on fair values calculated at the grant
date and expensed on a straight-line basis over the period that individuals
are providing service to the Group in respect of the awards.
Deferred Bonus Plan
The Deferred Bonus Plan ("DBP") is subject to rules approved by the Board and
to the Directors' Remuneration Policy (approved by shareholders triennially)
for Executive Directors of Sirius Real Estate Limited and two members of the
Senior Management Team within the Group.
The participants are subject to annual performance bonus conditions and
objectives to be agreed by the Remuneration Committee. At the end of the
applicable financial year, and on receipt of an annual performance bonus, as
determined by the Remuneration Committee, 50% or 65% depending on the
participants are awarded as cash with the remainder transferred into shares in
the Company. Of the remaining 50% or 35% for certain participants to be
transferred in shares, half is deferred for one year and the remaining half is
deferred for two years.
On 6 June 2023 an amount of 194,194 shares vested with a weighted average
share price of €1.02 at the date of exercise. 109,477 shares have been
surrendered in relation to the partial settlement of certain participants' tax
liabilities arising in respect of the vesting. An amount of €0.1m was paid
for the participants' tax liabilities.
On 7 July 2023 an amount of 6,347 shares vested with a weighted average share
price of €1.02 at the date of exercise. No shares have been surrendered in
relation to the settlement of tax liabilities arising in respect of the
vesting.
Number of share awards
Movements in the number of awards outstanding are as follows:
Year ended Year ended
31 March 2024
31 March 2023
Number of Weighted Number of Weighted
share awards average share awards average
exercise exercise
price price
€m €m
Balance outstanding as at the beginning of the year (nil exercisable) 14,478,647 - 15,278,619 -
Maximum granted during the year 9,410,131 - 5,353,067 -
Forfeited during the year (1,218,500) - (1,610,000) -
Exercised during the year (2,059,541) - (2,431,714) -
Shares surrendered to cover employee tax obligations (1,350,477) - (2,111,325) -
Balance outstanding as at year end (nil exercisable) 19,260,260 - 14,478,647 -
The weighted average remaining contractual life for the share awards
outstanding as at 31 March 2024 was 1.42 years (2023: 1.91 years).
Employee benefit schemes
A reconciliation of share-based payments and employee benefit schemes and
their impact on the consolidated income statement is as follows:
Year ended Year ended
31 March 2024 31 March 2023
€m €m
Charge relating to 2018 LTIP - June 2020 grant - 0.8
Charge relating to 2021 LTIP - August 2021 grant 1.0 1.6
Charge relating to 2021 LTIP - July 2022 grant 0.6 0.6
Charge relating to 2021 LTIP - June 2023 grant 0.8 -
Charge relating to 2021 LTIP - September 2023 grant 0.1 -
Charge relating to 2021 SIP - September 2021 grant 0.6 1.1
Charge relating to 2021 SIP - April 2022 grant 0.0 0.0
Charge relating to 2021 SIP - August 2022 grant 0.4 0.4
Charge relating to 2021 SIP - June 2023 grant 0.4 -
Charge relating to 2021 SIP - September 2023 grant 0.1 -
DBP 1.0 1.0
Total consolidated income statement charge relating to share-based payments 5.0 5.5
An amount of €5.0m (2023: €5.5m) is recognised in other distributable
reserves as per the consolidated statement of changes in equity. In addition,
an amount of €2.2m (2023: €1.7m) has been paid for participants' tax
liabilities in relation to share-based payment schemes.
9. Finance income, finance expense and change in fair value of derivative
financial instruments
Year ended Year ended
31 March 2024 31 March 2023
€m €m
Bank interest income 4.4 0.6
Finance income from associates 2.2 2.2
Finance income 6.6 2.8
Bank loan interest expense (15.9) (13.6)
Interest expense related to lease liabilities (see note 17) (1.1) (1.1)
Amortisation of capitalised finance costs (3.5) (3.3)
Total interest expense (20.5) (18.0)
Bank charges (0.3) (0.3)
Other finance costs (0.3) (0.3)
Finance expense (20.8) (18.3)
Change in fair value of derivative financial instruments (1.3) 0.9
Net finance expense (15.5) (14.6)
The change in fair value of derivative financial instruments of €1.3m (2023:
€0.9m) reflects the change in the market valuation of these financial
instruments.
10. Taxation
Consolidated income statement
Year ended Year ended
31 March 2024 31 March 2023
€m €m
Current income tax
Current income tax charge (3.7) (4.8)
Current income tax charge relating to disposals of investment properties (1.0) -
Adjustments in respect of prior periods(1) (0.1) 1.8
Total current income tax (4.8) (3.0)
Deferred tax
Relating to origination and reversal of temporary differences (2.5) (4.3)
Total deferred tax (2.5) (4.3)
Income tax charge reported in the income statement (7.3) (7.3)
(1) In the prior year, the Group identified an error in the accrual of tax
liabilities arising in the BizSpace Group as at 31 March 2022, resulting in an
overstatement of the tax liability of €5.0m of which €3.0m arose on
acquisition. These were assessed as not being material to the 31 March 2022
financial statements and the reduction in the liability was recorded in the 31
March 2023 financial statements. The amounts were recorded within other
expenses not included in FFO (see note 6) and the taxation lines of the income
statement.
The German corporation tax rate of 15.825% is used in the tax reconciliation
for the Group. Taxation for other jurisdictions is calculated at the rates
prevailing in each jurisdiction.
The reconciliation of the effective tax rate is explained below:
Year ended Year ended
31 March 2024 31 March 2023
€m €m
Profit before tax 115.2 87.0
Current tax using the German corporation tax rate of 15.825% (2023: 15.825%) 18.2 13.8
Effects of:
Deductible interest on internal financing(1) (5.3) (4.4)
Tax exempt loss/(gain) from selling of investments and dividends(2) 0.2 (0.4)
Non-deductible expenses 0.5 (0.3)
Change in unrecognised deferred tax - tax effect of utilisation of tax losses (8.5) 2.8
not previously recognised(3)
Adjustments in respect of prior periods(4) 0.1 (1.8)
German trade tax 0.2 0.4
Tax exempt income under REIT regime(5) 1.8 (3.7)
Difference in foreign tax rates(6) 0.1 0.9
Total income tax charge in the income statement 7.3 7.3
(1) The item refers to intra-group financing and also includes the difference
in foreign tax rates within the jurisdiction of the recipient of the interest
income and the German corporation tax rate.
(2) The tax exempt gain from selling of investments and dividends in the prior
year relates to the profits of associates only. Within the current year, there
will be a tax payable on a gain realised within a restructuring within the
Group.
(3) Due to merging companies within the current year, the Group could utilise
€5.3m available tax losses to offset profits. On 27 March 2024 the Growth
Opportunities Act was enacted which improves the deduction of tax losses.
Accordingly, the Group could utilise additional amounts of unrecognised tax
losses.
(4) To align with tax returns filed for previous years, an adjustment
(primarily arising on tax gains on disposal of investment properties) has been
made within the prior financial year.
(5) The BizSpace Group has entered into the UK REIT regime effective from 1
April 2022 which exempts income from property rental business and profits from
disposal of assets from UK tax charge. On the other hand, losses from
revaluation are not tax deductible which resulted in an increase of the
current year tax charge.
(6) As the UK corporation tax rate at 31 March 2024 was 25% (2023: 19%), this
item shows the difference between this rate and the German corporation tax
rate of 15.825% used in the above reconciliation.
Deferred tax assets and liabilities
Recognised deferred tax assets and liabilities are attributable to the
following:
Consolidated statement of financial position Consolidated income statement
31 March 2024 31 March 2023 Year ended Year ended
31 March 2024 31 March 2023
€m €m €m €m
Revaluation of investment property (107.3) (99.5) (7.8) (4.1)
Lease incentives (0.7) (0.7) 0.0 (0.1)
Fixed asset temporary differences (0.0) (0.1) 0.1 (0.2)
Financial instruments - (0.2) 0.2 (0.2)
Fair value adjustment on leased investment properties (assets) 3.6 3.9 (0.3) (0.2)
Fair value adjustment on leased investment properties (liabilities) (3.4) (3.8) 0.4 0.5
Recognised tax losses set-off against temporary differences 25.1 20.2 4.9 (0.1)
Deferred tax income/(expense) (2.5) (4.3)
Deferred tax liabilities (82.7) (80.2)
The Group has not recognised a deferred tax asset on €191.2m (2023:
€240.2m) of tax losses carried forward and future share scheme deductions as
it is not considered probable that future profits will be available to offset
the deferred tax asset against. There is no expiration date on the losses and
future share scheme tax deductions will convert to tax losses on realisation.
A change in ownership of the Group may result in restriction on the Group's
ability to use tax losses in certain tax jurisdictions.
A deferred tax liability is recognised on temporary differences of €nil
(2023: €nil) relating to the unremitted earnings of overseas subsidiaries as
the Group is able to control the timing of the reversal of these temporary
differences and it is probable that they will not reverse in the foreseeable
future.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets against current tax liabilities
and when they relate to income taxes levied by the same taxation authority and
the Group intends to settle its current tax assets and liabilities on a net
basis.
The following is the analysis of the deferred tax balances (after offset) by
jurisdiction:
Assets Liabilities Net
31 March 2024 31 March 2023 31 March 2024 31 March 2023 31 March 2024 31 March 2023
€m €m €m €m €m €m
UK - - - - - -
Germany 28.7 24.1 (111.4) (104.4) (82.7) (80.2)
Cyprus - - - - - -
Deferred tax assets/(liabilities) 28.7 24.1 (111.4) (104.4) (82.7) (80.2)
Current tax assets and liabilities
The following is the analysis of the current tax balances (after offset) by
jurisdiction:
Assets Liabilities Net
31 March 2024 31 March 2023 31 March 2024 31 March 2023 31 March 2024 31 March 2023
€m €m €m €m €m €m
UK - - - (0.4) - (0.4)
Germany - - (6.5) (4.6) (6.5) (4.6)
Cyprus - - (0.5) (0.4) (0.5) (0.4)
Current tax liabilities - - (7.0) (5.4) (7.0) (5.4)
11. Earnings per share
The calculations of the basic, diluted, EPRA, headline and adjusted earnings
per share are based on the following data:
Year ended Year ended
31 March 2024 31 March 2023
€m €m
Earnings attributable to the owners of the Company
Basic earnings 107.8 79.6
Diluted earnings 107.8 79.6
EPRA earnings 101.1 88.2
Diluted EPRA earnings 101.1 88.2
Headline earnings 100.0 89.0
Diluted headline earnings 100.0 89.0
Adjusted
Basic earnings 107.8 79.6
(Deduct gain)/add loss on revaluation of investment properties (12.2) 9.8
Deduct gain on disposal of properties (0.9) (4.7)
Tax in relation to the revaluation gains/losses of investment properties and 3.7 4.2
gains/losses on disposal of properties above less REIT related tax effects
NCI relating to revaluation (net of related tax) 0.0 -
NCI relating to gain on disposal of properties (net of related tax) 0.0 -
Add loss on revaluation of investment property relating to associates 1.6 0.5
Tax in relation to the revaluation gains/losses on investment property (0.0) (0.4)
relating to associates above
Headline earnings after tax 100.0 89.0
Add/(deduct) change in fair value of derivative financial instruments (net of 1.1 (0.8)
related tax and NCI)
Deduct revaluation loss relating to leased investment properties (net of (0.8) (1.5)
related tax)
Add adjusting items (net of related tax and NCI) 5.9 6.2
Adjusted earnings after tax 106.2 92.9
Number of shares
Weighted average number of ordinary shares for the purpose of basic, headline, 1,231,991,541 1,167,757,975
adjusted and basic EPRA earnings per share
Weighted average number of ordinary shares for the purpose of diluted 1,249,500,420 1,183,626,763
earnings, diluted headline earnings, diluted adjusted earnings and diluted
EPRA earnings per share
Basic earnings per share 8.75c 6.82c
Diluted earnings per share 8.63c 6.73c
Basic EPRA earnings per share 8.21c 7.55c
Diluted EPRA earnings per share 8.10c 7.45c
Headline earnings per share 8.12c 7.62c
Diluted headline earnings per share 8.01c 7.52c
Adjusted earnings per share 8.62c 7.96c
Adjusted diluted earnings per share 8.50c 7.85c
Adjusting items in the above table are made up from the following (as stated
within administrative expenses):
Notes Year ended Year ended
31 March 2024 31 March 2023
€m €m
Other expenses not included in FFO 6 0.9 0.7
Share-based payments 6 5.0 5.5
Adjusting items 5.9 6.2
The following table shows the reconciliation of basic to headline earnings,
separately disclosing the impact before tax (gross column) and after tax (net
column):
Year ended Year ended
31 March 2024 31 March 2023
Gross Net Gross Net
€m €m €m €m
Basic earnings 107.8 79.6
(Deduct gain)/add loss on revaluation of investment properties (12.2) (9.5) 9.8 14.0
(Deduct gain)/add loss on disposal of properties (0.9) 0.1 (4.7) (4.7)
NCI relating to revaluation 0.0 0.0 0.1 -
NCI relating to gain on disposal of properties 0.0 0.0 - -
Add loss on revaluation of investment property relating to associates 1.6 1.6 0.5 0.1
Headline earnings 100.0 89.0
EPRA earnings
Year ended Year ended
31 March 2024 31 March 2023
€m €m
Basic and diluted earnings attributable to owners of the Company 107.8 79.6
(Deduct gain)/add loss on revaluation of investment properties (12.2) 9.8
Add loss/(deduct gain) on disposal of properties (net of related tax) 0.1 (4.7)
Change in fair value of derivative financial instruments 1.3 (0.9)
Deferred tax in respect of EPRA earnings adjustments 2.5 4.3
NCI relating to revaluation (net of related tax) 0.0 -
NCI relating to gain on disposal of properties (net of related tax) 0.0 -
Add loss on revaluation of investment property relating to associates 1.6 0.5
Tax in relation to the revaluation gains/losses on investment property (0.0) (0.4)
relating to associates
EPRA earnings 101.1 88.2
For more information on EPRA earnings refer to Annex 1.
For the calculation of basic, headline, adjusted, EPRA and diluted earnings
per share the number of shares does not include 7,292,222 own shares held
(2023: 7,492,763 shares), which are held by an Employee Benefit Trust on
behalf of the Group.
The weighted average number of shares for the purpose of diluted, diluted
EPRA, diluted headline and adjusted diluted earnings per share is calculated
as follows:
Year ended Year ended
31 March 2024 31 March 2023
Weighted average number of ordinary shares for the purpose of basic, basic 1,231,991,541 1,167,757,975
EPRA, headline and adjusted earnings per share
Weighted average effect of grant of share awards 17,508,879 15,868,789
Weighted average number of ordinary shares for the purpose of diluted, diluted 1,249,500,420 1,183,626,764
EPRA, diluted headline and adjusted diluted earnings per share
12. Net asset value per share
31 March 2024 31 March 2023
€m €m
Net asset value
Net asset value for the purpose of assets per share (total equity attributable 1,407.3 1,197.1
to the owners of the Company)
Deferred tax liabilities (see note 10) 82.7 80.2
Derivative financial instruments at fair value - (1.3)
Adjusted net asset value attributable to the owners of the Company 1,490.0 1,276.0
Number of shares
Number of ordinary shares for the purpose of net asset value per share and 1,340,848,147 1,168,371,222
adjusted net asset value per share
Number of ordinary shares for the purpose of EPRA NRV, NTA and NDV per share 1,360,108,407 1,182,849,869
Net asset value per share 104.96c 102.46c
Adjusted net asset value per share 111.12c 109.21c
31 March 2024 EPRA NRV EPRA NTA EPRA NDV
€m €m €m
Net asset value as at year end (basic) 1,407.3 1,407.3 1,407.3
Diluted EPRA net asset value at fair value 1,407.3 1,407.3 1,407.3
Group
Derivative financial instruments at fair value - - n/a
Deferred tax in respect of EPRA fair value movements on investment properties 82.7 82.7 (1) n/a
Intangibles as per note 16 n/a (3.3) n/a
Fair value of fixed interest rate debt n/a n/a 114.7
Real estate transfer tax 170.3 n/a n/a
Investment in associate
Deferred tax in respect of EPRA fair value movements on investment properties 7.0 7.0(1) n/a
Fair value of fixed interest rate debt n/a n/a 6.7
Real estate transfer tax 9.4 n/a n/a
Total EPRA NRV, NTA and NDV 1,676.7 1,493.7 1,528.7
EPRA NRV, NTA and NDV per share 123.28c 109.82c 112.40c
31 March 2023 EPRA NRV EPRA NTA EPRA NDV
€m €m €m
Net asset value as at year end (basic) 1,197.1 1,197.1 1,197.1
Diluted EPRA net asset value at fair value 1,197.1 1,197.1 1,197.1
Group
Derivative financial instruments at fair value (1.3) (1.3) n/a
Deferred tax in respect of EPRA fair value movements on investment properties 80.2 80.1 (1) n/a
Intangibles as per note 16 n/a (4.1) n/a
Fair value of fixed interest rate debt n/a n/a 99.2
Real estate transfer tax 164.4 n/a n/a
Investment in associate
Deferred tax in respect of EPRA fair value movements on investment properties 7.0 7.0(1) n/a
Fair value of fixed interest rate debt n/a n/a 9.9
Real estate transfer tax 9.3 n/a n/a
Total EPRA NRV, NTA and NDV 1,456.7 1,278.8 1,306.2
EPRA NRV, NTA and NDV per share 123.15c 108.11c 110.43c
(1) The Group intends to hold and does not intend in the long term to sell any
of the investment properties and has excluded such deferred taxes for the
whole portfolio as at year end.
For more information on adjusted net asset value and EPRA NRV, NTA and NDV,
refer to Annex 1.
The number of ordinary shares for the purpose of EPRA NRV, NTA and NDV per
share is calculated as follows:
31 March 2024 31 March 2023
Number of ordinary shares for the purpose of net asset value per share and 1,340,848,147 1,168,371,222
adjusted net asset value per share
Effect of grant of share awards 19,260,260 14,478,647
Number of ordinary shares for the purpose of EPRA NRV, NTA and NDV per share 1,360,108,407 1,182,849,869
The number of shares does not include 7,292,222 own shares held (2023:
7,492,763 shares), which are held by an Employee Benefit Trust on behalf of
the Group.
13. Investment properties
The movement in the book value of investment properties is as follows:
31 March 2024 3 March 2023
€m €m
Total investment properties at book value as at the beginning of the year 2,123.0 2,100.0
Additions - owned investment properties 74.1 44.7
Additions - leased investment properties - 1.4
Capital expenditure and broker fees 37.7 29.9
Disposals (48.9) (17.1)
Reclassified as investment properties held for sale (see note 14) - (8.8)
Gain on revaluation above capex and broker fees 12.4 (7.7)
Adjustment in respect of lease incentives 0.7 (0.6)
Loss on revaluation relating to leased investment properties (0.9) (1.5)
Foreign exchange differences 12.5 (17.3)
Total investment properties at book value as at year end(1) 2,210.6 2,123.0
(1) Excluding assets held for sale.
The reconciliation of the valuation carried out by the external valuer to the
carrying values shown in the consolidated statement of financial position is
as follows:
31 March 2024 31 March 2023
€m €m
Owned investment properties at market value per valuer's report(1) 2,190.6 2,103.1
Adjustment in respect of lease incentives (3.9) (4.6)
Leased investment property market value 23.9 24.5
Total investment properties at book value as at year end(1) 2,210.6 2,123.0
(1) Excluding assets held for sale.
The fair value (market value) of the Group's owned investment properties as at
year end has been arrived at on the basis of a valuation carried out at that
date by Cushman & Wakefield LLP (2023: Cushman & Wakefield LLP), an
independent valuer accredited by the Royal Institute of Chartered Surveyors
("RICS"). The fee arrangement with Cushman & Wakefield LLP for the
valuation of the Group's properties is fixed, subject to an adjustment for
acquisitions and disposals.
The value of each of the properties has been assessed in accordance with the
RICS valuation standards on the basis of market value. The methodology and
assumptions used to determine the fair values of the properties are consistent
with the previous year.
The weighted average lease expiry remaining across the owned portfolio in
Germany as at year end was 2.7 years (2023: 2.8 years). The weighted average
lease expiry remaining across the owned portfolio in the UK as at year end was
1.17 years (2023: 1.01 years). Licence agreements in the UK are rolling and
are included in the valuation.
The fair value (market value) of the Group's leased investment properties as
at year end has been arrived at on the basis of a valuation carried out by
management using discounted cash flows similar to the approach of Cushman
& Wakefield LLP. A sensitivity analysis is not provided on the lease
investment properties as the balance is not considered material to the
financial statements.
The reconciliation of loss or gain on revaluation above capex as per the
consolidated income statement is as follows:
Year ended Year ended
31 March 2024 31 March 2023
€m €m
Gain/(loss) on revaluation above capex and broker fees 12.4 (7.7)
Adjustment in respect of lease incentives 0.7 (0.6)
Loss on revaluation relating to leased investment properties (0.9) (1.5)
Gain/(loss) on revaluation of investment properties reported in the income 12.2 (9.8)
statement
Included in the loss or gain on revaluation of investment properties reported
in the income statement are gross gains of €76.4m and gross losses of
€64.2m (2023: gross gains of €39.2m and gross losses of €49.0m).
Other than the capital commitments disclosed in note 31, the Group is under no
contractual obligation to purchase, construct or develop any investment
property. The Group is responsible for routine maintenance of the investment
properties.
All investment properties are categorised as Level 3 fair values as they use
significant unobservable inputs. There have not been any transfers between
levels during the year. Investment properties have been classed according to
their asset type. Information on these significant unobservable inputs per
class of investment property is disclosed below (excluding leased investment
properties).
The valuation for owned investment properties (including assets classified as
held for sale) is performed on a lease-by-lease basis due to the mixed-use
nature of the sites using the discounted cash flow technique for the German
portfolio and on a capitalised income basis (where income is capitalised by an
appropriate yield which reflects the age, location, ownership, customer base
and agreement type) for the UK portfolio. This gives rise to large ranges in
the inputs.
Market Current rental rate Market rental rate Occupancy Gross initial yield Net initial yield % Discount factor Void period months
value per sqm per sqm % % %
€m € €
31 March 2024 Low High Low High Low High Low High Low High Low High Low High
Traditional business parks
Mature 392.4 2.88 9.09 2.75 7.99 89.5 100.0 4.9 9.9 4.1 7.6 4.4 7.1 6 15
Value add 572.0 3.81 8.56 3.85 7.82 57.1 98.4 4.5 9.2 1.7 6.3 4.5 7.3 9 18
Total traditional business parks 964.4 2.88 9.09 2.75 7.99 57.1 100.0 4.5 9.9 1.7 7.6 4.4 7.3 6 18
Modern business parks
Mature 230.6 5.67 11.20 4.30 10.35 94.4 100.0 5.5 9.7 4.6 8.8 4.3 5.4 6 12
Value add 258.5 4.69 10.84 4.22 8.65 58.0 87.3 5.3 8.6 4.0 6.9 5.3 6.8 9 18
Total modern business parks 489.1 4.69 11.20 4.22 10.35 58.0 100.0 5.3 9.7 4.0 8.8 4.3 6.8 6 18
Office
Mature 46.9 12.27 15.52 9.66 11.14 90.9 93.5 7.4 8.7 6.2 7.3 4.9 4.9 9 9
Value add 228.6 7.47 12.46 6.60 12.20 54.4 89.2 4.0 9.4 2.3 6.9 5.3 7.1 9 15
Total office 275.5 7.47 15.52 6.60 12.20 54.4 93.5 4.0 9.4 2.3 7.3 4.9 7.1 9 15
Total Germany 1,729.0 2.88 15.52 2.75 12.20 54.4 100.0 4.0 9.9 1.7 8.8 4.3 7.3 6 18
Market Current Market rental Occupancy Net initial yield Void period
rental rate
rate
value
% % months
per sqm per sqm
€m
€ €
31 March 2024 Low High Low High Low High Low High Low High
Total mixed-use schemes 153.2 0.56 28.74 5.69 47.89 46.6 96.6 1.4 13.3 4 12
Total office 136.5 1.28 45.29 8.16 26.23 46.7 100.0 1.3 16.0 4 12
Total industrial 171.9 2.12 12.70 3.40 14.14 56.2 99.9 4.4 11.9 4 12
Total UK 461.6 0.56 45.29 3.40 47.89 46.6 100.0 1.3 16.0 4 12
Market Current rental rate Market rental rate Occupancy Gross initial yield Net initial yield % Discount factor Void period months
value per sqm per sqm % % %
€m € €
31 March 2023 Low High Low High Low High Low High Low High Low High Low High
Traditional business parks
Mature 362.0 2.88 8.58 2.67 7.80 64.7 100.0 4.7 9.9 3.7 7.6 4.1 5.8 6 15
Value add 607.6 2.25 6.64 3.58 8.46 26.9 97.4 2.9 9.8 0.8 7.5 4.5 7.1 9 18
Total traditional business parks 969.6 2.25 8.58 2.67 8.46 26.9 100.0 2.9 9.9 0.8 7.6 4.1 7.1 6 18
Modern business parks
Mature 200.4 5.38 8.64 3.93 8.15 94.3 100.0 3.6 10.5 2.4 9.3 4.1 5.4 6 15
Value add 250.1 2.92 9.76 3.91 10.35 54.5 92.8 5.5 9.4 3.8 7.4 4.8 7.3 9 24
Total modern business parks 450.5 2.92 9.76 3.91 10.35 54.5 100.0 3.6 10.5 2.4 9.3 4.1 7.3 6 24
Office
Mature 37.5 14.34 14.34 10.78 10.78 92.6 92.6 8.7 8.7 7.3 7.3 4.9 4.9 9 9
Value add 236.4 4.05 10.27 6.42 12.19 49.7 87.5 4.4 9.3 2.4 6.8 5.0 6.9 9 18
Total office 273.9 4.05 14.34 6.42 12.19 49.7 92.6 4.4 9.3 2.4 7.3 4.9 6.9 9 18
Total Germany 1,694.0 2.25 14.34 2.67 12.19 26.9 100.0 2.9 10.5 0.8 9.3 4.1 7.3 6 24
Market Current Market rental Occupancy Net initial yield Void period
rental rate
rate
value
% % months
per sqm per sqm
€m
€ €
31 March 2023 Low High Low High Low High Low High Low High
Total mixed-use schemes 102.4 2.09 20.25 5.46 23.58 42.0 93.3 4.0 10.8 4 12
Total office 143.7 5.42 33.89 7.94 24.68 50.5 100.0 4.9 23.2 4 12
Total industrial 171.6 2.23 8.19 2.55 12.99 64.1 100.0 3.8 12.4 4 12
Total UK 417.7 2.09 33.89 2.55 24.68 42.0 100.0 3.8 23.2 4 12
As a result of the level of judgement and estimates used in arriving at the
market valuations, the amounts which may ultimately be realised in respect of
any given property may differ from valuations shown in the statement of
financial position. Key inputs are considered to be inter-related whereby
changes in one key input can result in changes in other key inputs. The impact
of changes in relation to the key inputs is also shown in the table below:
Market Change of 5% Change of 0.25% Change of 0.5% Change of 0.5%
value in market rental rates in discount rates in gross initial yield in net initial yield
€m
€m €m €m €m
31 March 2024 Increase Decrease Increase Decrease Increase Decrease Increase Decrease
Total traditional 964.4 48.0 (47.7) (18.8) 19.1 (72.0) 85.1 (91.9) 115.5
business parks
Total modern business parks 489.1 23.2 (23.3) (9.7) 9.8 (33.7) 39.3 (41.0) 49.4
Total office 275.5 13.7 (14.1) (5.3) 5.6 (19.4) 22.9 (25.5) 32.2
Market value 1,729.0 84.9 (85.1) (33.8) 34.5 (125.1) 147.3 (158.4) 197.1
Germany
Market Change of 5% Change of 0.5%
value in market rental rates in net initial yield
€m €m €m
31 March 2024 Increase Decrease Increase Decrease
Total mixed-use schemes 153.2 5.7 (5.8) (8.8) 9.8
Total office 136.5 3.9 (4.3) (5.8) 6.1
Total industrial 171.9 6.8 (6.9) (10.6) 12.0
Market value UK 461.6 16.4 (17.0) (25.2) 27.9
Market Change of 5% Change of 0.25% Change of 0.5% Change of 0.5%
value in market rental rates in discount rates in gross initial yield in net initial yield
€m
€m €m €m €m
31 March 2023 Increase Decrease Increase Decrease Increase Decrease Increase Decrease
Total traditional 969.6 48.9 (49.2) (19.3) 19.1 (73.1) 86.8 (106.6) 109.0
business parks
Total modern business parks 450.5 22.0 (21.7) (8.5) 9.3 (32.2) 37.9 (41.5) 47.4
Total office 273.9 14.0 (14.1) (5.6) 5.6 (20.8) 24.8 (28.3) 36.8
Market value 1,694.0 84.9 (85.0) (33.4) 34.0 (126.1) 149.5 (176.4) 193.2
Germany
Market Change of 5% Change of 0.5%
value in market rental rates in net initial yield
€m €m €m
31 March 2023 Increase Decrease Increase Decrease
Total mixed-use schemes 102.4 (6.2) 7.5 3.8 (3.6)
Total office 143.7 (6.8) 7.8 4.7 (4.5)
Total industrial 171.6 (10.8) 12.7 7.0 (6.6)
Market value UK 417.7 (23.8) 28.0 15.5 (14.7)
14. Assets held for sale
Investment properties held for sale
31 March 2024 31 March 2023
€m €m
Wuppertal - 8.8
Balance as at year end - 8.8
The disclosures regarding valuation in note 13 are also applicable to assets
held for sale.
As at 31 March 2023, an amount of €8.8m relating to the sale of the
Wuppertal asset was received prior to the completion date of 1 April 2023
and was included in the cash at bank per note 21. As a result, an equal and
opposite position within other payables was recognised. See note 22 for
further details.
15. Plant and equipment
Plant and Fixtures Total
equipment and fittings €m
€m €m
Cost
As at 31 March 2023 2.7 10.1 12.8
Additions in year 1.3 1.0 2.3
Disposals in year (0.2) (0.2) (0.4)
Foreign exchange differences 0.1 0.1 0.2
As at 31 March 2024 3.9 11.0 14.9
Depreciation
As at 31 March 2023 (1.0) (4.6) (5.6)
Charge for year (0.7) (1.1) (1.8)
Disposals in year 0.1 0.1 0.2
Foreign exchange differences 0.2 (0.1) 0.1
As at 31 March 2024 (1.4) (5.7) (7.1)
Net book value as at 31 March 2024 2.5 5.3 7.8
Cost
As at 31 March 2022 2.7 8.4 11.1
Additions in year 0.8 3.3 4.1
Disposals in year (0.8) (1.4) (2.2)
Foreign exchange differences - (0.2) (0.2)
As at 31 March 2023 2.7 10.1 12.8
Depreciation
As at 31 March 2022 (1.1) (4.5) (5.6)
Charge for year (0.6) (1.5) (2.1)
Disposals in year 0.8 1.3 2.1
Foreign exchange differences (0.1) 0.1 -
As at 31 March 2023 (1.0) (4.6) (5.6)
Net book value as at 31 March 2023 1.7 5.5 7.2
16. Intangible assets
Software and Total
licences with €m
definite useful life
€m
Cost
As at 31 March 2023 11.6 11.6
Additions in year 0.8 0.8
Disposals in year - -
Foreign exchange differences (0.1) (0.1)
As at 31 March 2024 12.3 12.3
Amortisation
As at 31 March 2023 (7.5) (7.5)
Charge for year (1.5) (1.5)
Disposals in year - -
Foreign exchange differences 0.0 0.0
As at 31 March 2024 (9.0) (9.0)
Net book value as at 31 March 2024(1) 3.3 3.3
Cost
As at 31 March 2022 10.5 10.5
Additions in year 1.1 1.1
Disposals in year - -
Foreign exchange differences - -
As at 31 March 2023 11.6 11.6
Amortisation
As at 31 March 2022 (6.2) (6.2)
Charge for year (1.3) (1.3)
Disposals in year - -
Foreign exchange differences - -
As at 31 March 2023 (7.5) (7.5)
Net book value as at 31 March 2023(1) 4.1 4.1
(1) Included in the net book value is an amount of €1.3m relating to
intangible assets under development not yet amortised (2023: €1.1m). This
position primarily consists of €0.9m in relation to the upgrade of the IT
system which will be finalised in the first quarter of 2025. All other
development projects are expected to finalise in the next financial year.
17. Right of use assets and lease liabilities
Set out below are the carrying amounts of right of use assets (excluding those
disclosed under investment properties) recognised and the movements during the
year:
Office Total
€m €m
As at 31 March 2022 15.0 15.0
Additions 1.5 1.5
Depreciation expense (2.1) (2.1)
As at 31 March 2023 14.4 14.4
Depreciation expense (1.8) (1.8)
Foreign exchange differences 0.0 0.0
As at 31 March 2024 12.6 12.6
In addition to office spaces the Group is also counterparty to long-term
leasehold agreements and head leases relating to commercial property. Right of
use assets amounting to €23.9m (2023: €24.5m) are classified as investment
properties, of which €2.1m (2023: €2.8m) relate to commercial property.
Set out below are the carrying amounts of lease liabilities and the movements
during the year:
31 March 2024 31 March 2023
€m €m
Balance as at the beginning of the year (39.6) (38.7)
Accretion of interest (1.1) (1.1)
Additions - (2.8)
Payments 3.3 2.3
Foreign exchange differences (0.4) 0.7
Balance as at year end (37.8) (39.6)
Current lease liabilities as at year end (2.3) (2.2)
Non-current lease liabilities as at year end (35.5) (37.4)
The following table sets out the carrying amount, by maturity, of the Group's
lease liabilities:
31 March 2024 Within 1 year 1-5 years 5+ years Total
€m €m €m €m
Commercial property(1) (0.2) (1.0) - (1.2)
Long-term leasehold(1) (0.2) (1.1) (20.5) (21.8)
Office space (1.9) (7.5) (5.4) (14.8)
Total (2.3) (9.6) (25.9) (37.8)
31 March 2023 Within 1 year 1-5 years 5+ years Total
€m €m €m €m
Commercial property(1) (0.2) (1.0) (0.3) (1.5)
Long-term leasehold(1) (0.2) (1.0) (20.4) (21.6)
Office space (1.8) (7.5) (7.2) (16.5)
Total (2.2) (9.5) (27.9) (39.6)
(1) These lease liabilities relate to right of use assets recorded as
investment properties.
Maturity analysis of lease liabilities using contractual undiscounted payments
is disclosed in note 24.
The overall weighted average discount rate used for the year is 2.8% (2023:
2.7%).
During the year expenses paid for leases of low-value assets and short-term
leases which are recognised straight-line over the lease term (included in the
administrative expenses) amounted to €0.5m (2023: €0.6m).
In addition to leases of low-value assets and payments resulting from
short-term leases that are included in the cash flow from operating
activities, interest payments and repayments of lease liabilities totalling
€3.3m (2023: €2.3m) were incurred for the year and are included in the
cash flow from financing activities.
18. Other non-current financial assets
31 March 2024 31 March 2023
€m €m
Deposits 4.0 4.1
Loans to associates 45.1 44.3
Balance as at year end 49.1 48.4
Loans to associates relate to shareholder loans granted to associates by the
Group. The loans terminate on 31 December 2026 and are charged at a fixed
interest rate. The expected credit loss has been considered based on multiple
factors such as history of repayments, forward-looking budgets and
forecasts. Based on the assessment the expected credit loss was immaterial.
19. Investment in associates
The principal activity of the associates is the investment in, and development
of, commercial property located in Germany and to provide conventional and
flexible workspace. Since the associates are individually immaterial the Group
is disclosing aggregated information of the associates.
The following table illustrates the summarised financial information of the
Group's investment in associates:
31 March 2024 31 March 2023
€m €m
Current assets 29.7 28.4
Non-current assets 360.7 354.7
Current liabilities (24.9) (15.6)
Non-current liabilities (298.7) (296.1)
Equity 66.8 71.4
Unrecognised accumulated losses 5.3 4.9
Subtotal 72.1 76.3
Group's share in equity - 35% 25.2 26.7
The accumulated losses of the investment in associates are not recognised,
this is in line with the accounting policy as outlined in note 2.
Year ended Year ended
31 March 2024 31 March 2023
€m €m
Net operating income 21.7 21.1
Loss on revaluation of investment properties (7.0) (0.7)
Administrative expense (3.8) (3.7)
Operating profit 10.9 16.7
Net finance costs (8.7) (8.8)
Profit before tax 2.2 7.9
Taxation (0.6) (1.9)
Unrecognised loss 0.2 1.3
Total profit and comprehensive income for the year after tax 1.8 7.3
Group's share of profit for the year - 35% 0.6 2.6
Included within the non-current liabilities are shareholder loans amounting to
€128.8m (2023: €126.8m). As at year end no contingent liabilities existed
(2023: none). The associates had contracted capital expenditure for
development and enhancements of €3.0m as at year end (2023: €3.4m).
The following table illustrates the movement in investment in associates:
31 March 2024 31 March 2023
€m €m
Balance as at the beginning of the year 26.7 24.1
Dividend received (2.1) -
Share of profit 0.6 2.6
Balance as at year end 25.2 26.7
20. Trade and other receivables
31 March 2024 31 March 2023
€m €m
Gross trade receivables 20.7 22.4
Expected credit loss provision (see note 24) (7.8) (8.7)
Net trade receivables 12.9 13.7
Other receivables 20.6 14.1
Prepayments 8.9 2.7
Balance as at year end 42.4 30.5
Other receivables include primarily accrued income of €4.5m (2023: €2.6m),
lease incentives of €3.9m (2023: €4.6m), accrued income from investment in
associates of €3.7m (2023: €2.2m), a receivable regarding the Stoke
disposal of €3.5m (2023: €0.0m).
For the year ended 31 March 2024, prepayments included costs of €7.1m
relating to the acquisitions of new sites in Dresden, Germany (€1.0m),
Klipphausen, Germany (€1.4m) and Gloucestershire, UK (€4.7m).
21. Cash and cash equivalents
31 March 2024 31 March 2023
€m €m
Cash at bank 125.3 99.2
Short-term investments 89.2 -
Cash restricted under contractual terms:
Deposit for bank guarantees 3.0 1.3
Deposits received from tenants 26.7 23.8
Balance as at year end 244.2 124.3
Cash at bank earns interest at floating rates based on daily bank deposit
rates. The fair value of cash as at year end is €244.2m (2023: €124.3m).
Short-term investments are an investment in Money Market Funds. The Group
invests only in highly liquid products with short maturities, which are
readily convertible to a known amount of cash and that are subject to an
insignificant risk of changes in value.
Tenants' deposits are legal securities of tenants retained by the Group
without the right to use these cash deposits for purposes other than strictly
tenant related transactions (e.g. move-out costs, costs due to non-compliance
with certain terms of the lease agreement or late rent/service charge
payments). The tenants' deposits meet the definition of cash as the Group can
access these deposits on demand.
Cash is held by reputable banks and the Group assessed the expected credit
loss to be immaterial.
22. Trade and other payables
31 March 2024 31 March 2023
€m €m
Trade payables 14.6 12.0
Accrued expenses 43.9 28.6
Provisions(1) 3.1 3.3
Interest and amortisation payable 6.2 5.6
Tenant deposits 26.8 23.8
Unearned revenue 11.5 10.6
Other payables 8.6 17.6
Balance as at year end 114.7 101.5
(1) For the Annual Report and Accounts 2023, as at 31 March 2023, the
provision amount of €3.3m was included in accrued expenses split between
costs relating to non-recurring projects €2.8m and other costs €0.5m.
The Group have recognised a provision of €3.1m (2023: €3.3m) for an
ongoing legal claim in relation to a property which was sold during 2017. The
recognised provision as at 31 March 2023 has been reassessed and the provision
has been increased by €0.6m as at 31 March 2024. Some €0.8m has been
reclassed to costs relating to non-recurring projects as shown in the table of
break down of the balance of accrued expenses below. This amount has been
settled in April 2024. The remaining provision amount represents the Directors
best estimate of the potential outflow at the present time, however, the
Directors recognise there is uncertainty relating to this amount. The expected
timing of settlement of this provision is less than 12-months and is not
discounted due to the expected timing of settlement. At this stage, the
Directors do not expect to incur a liability over and above what has already
been recognised in the financial statements. To align to the current year
presentation, the provisions has been shown as a separate line and this is a
reallocation from accrued expenses as at 31 March 2023 of €3.3m.
Unearned revenue includes service charge amounts of €2.5m (2023: €3.1m).
Service charge income is only recognised as income when the performance
obligations are met. All unearned revenue of the prior year was recognised as
revenue in the current year.
Included within other payables are credit balances due to tenants in relation
to over collections of service charge in amount of €4.7m (2023: €3.6m).
As at 31 March 2023, other payables included €8.8m of proceeds relating to
the sale of the Wuppertal asset that is categorised as an asset held for sale
as at 31 March 2023 in advance of the completion date of 1 April 2023. See
note 14 for details of assets held for sale.
The following table breaks down the balance of accrued expenses:
31 March 2024 31 March 2023
€m €m
Costs relating to service charge 23.2 16.4
Bonuses 6.8 4.5
Costs relating to non-recurring projects 0.8 -
Administrative costs 5.4 2.4
Other costs 7.7 5.3
Balance as at year end 43.9 28.6
23. Interest-bearing loans and borrowings
Interest rate Loan maturity date 31 March 2024 31 March 2023
% €m €m
Current
Berlin Hyp AG
- fixed rate facility 1.48 31 October 2023 - 58.2
- fixed rate facility 0.90 31 October 2023 - 110.4
- fixed rate facility 4.26 31 October 2030 2.6 -
Saarbrücken Sparkasse
- fixed rate facility 1.53 28 February 2025 13.5 0.7
Deutsche Pfandbriefbank AG
- hedged floating rate facility Hedged (1) 31 December 2023 - 51.1
- floating rate facility Floating (1) 31 December 2023 - 6.2
- fixed rate facility 4.25 31 December 2030 1.3 -
Schuldschein
- fixed rate facility 1.60 3 July 2023 - 20.0
- fixed rate facility Floating(2) 6 January 2025 5.0 -
- fixed rate facility 1.70 3 March 2025 10.0 -
Capitalised finance charges on all loans (2.8) (2.9)
29.6 243.7
Non-current
Berlin Hyp AG
- fixed rate facility 4.26 31 October 2030 166.3 -
Saarbrücken Sparkasse
- fixed rate facility 1.53 28 February 2025 - 13.5
Deutsche Pfandbriefbank AG
- fixed rate facility 4.25 31 December 2030 56.7 -
Schuldschein
- floating rate facility Floating(2) 6 January 2025 - 5.0
- fixed rate facility 1.70 3 March 2025 - 10.0
Corporate bond I
- fixed rate 1.125 22 June 2026 400.0 400.0
Corporate bond II
- fixed rate 1.75 24 November 2028 300.0 300.0
Capitalised finance charges on all loans (7.5) (7.8)
915.5 720.7
Total 945.1 964.4
(1) Tranche 1 of this facility is fully hedged with a swap charged at a
rate of 1.40%; tranche 2 of this facility is fully hedged with a swap charged
at a rate of 1.25%; and €19.1m of tranche 3 of this facility is fully hedged
with a swap charged at a rate of 0.91%. A €6.5m extension and the tranche 3
related €0.5m arrangement fee are charged with a floating rate of 1.20% over
three-month EURIBOR (not less than 0%). The Group has not adopted any hedge
accounting.
(2) This unsecured facility has a floating rate of 1.70% over six month
EURIBOR (not less than 0%).
The movement of loans and borrowings for the year comprised of €248.1m
repayment of loans, loan drawdowns of €228.3m and €0.4m capitalisation of
finance charges (2023: €20.4m, €nil and €3.4m respectively).
The borrowings (excluding capitalised loan issue cost) are repayable as
follows:
31 March 2024 31 March 2023
€m €m
On demand or within one year 32.4 246.6
In the second year 4.0 28.5
In the third to tenth years inclusive 919.0 700.0
Total 955.4 975.1
The Group has pledged 15 (2023: 15) investment properties to secure several
separate interest-bearing debt facilities granted to the Group. The 15 (2023:
15) properties had a combined valuation of €528.3m as at year end (2023:
€510.7m).
Group debt covenants
A summary of the Group's debt covenants is set out below:
31 March 2024 31 March 2023
€m €m
Carrying amount of interest-bearing loans and borrowings 945.1 964.4
Unamortised borrowing costs 10.3 10.7
Total 955.4 975.1
Book value of owned investment properties(1) 2,186.7 2,107.3
Gross loan to value ratio 43.7% 46.3%
(1) Includes assets held for sale.
The Group's loans are subject to various covenants, which include interest
cover ratio, loan to value, debt service cover, occupancy, etc. as stipulated
in the loan agreements.
During the year, the Group did not breach any of its loan covenants, nor did
it default on any of its obligations under its loan agreements and the Group
has a sufficient level of headroom as at year end.
Refer to note 2(c) where the Group discloses forecast covenant compliance with
regard to management's going concern assessment.
Berlin Hyp AG
In the current year two existing loan facilities amounting to €168.6m have
been fully repaid by 31 October 2023 and have been replaced by a new loan
facility amounting to €170.0m. The new loan facility is a separate financial
instrument to the existing facilities and came into effect on 1 November
2023. The loan terminates on 31 October 2030. Amortisation is 1.5% per annum
with the remainder due in the six years. The loan facility is charged at
a fixed interest rate of 4.26%. This facility is secured over nine property
assets.
Saarbrücken Sparkasse
On 28 March 2018, the Group agreed to a facility agreement with Saarbrücken
Sparkasse for €18.0m. The loan terminates on 28 February 2025. Amortisation
is 4.00% per annum with the remainder due in one instalment on the final
maturity date. The facility is charged with an all-in fixed interest rate of
1.53%. The facility is secured over one property asset. No changes to the
terms of the facility have occurred during the twelve month period ended 31
March 2024.
Deutsche Pfandbriefbank AG
In the current year two existing loan facilities amounting to €57.3m have
been fully repaid by 31 December 2023 and have been replaced by a new loan
facility amounting to €58.3m. The new loan facility is a separate financial
instrument to the existing facilities and came into effect on 1 January 2024.
The loan terminates on 31 December 2030. Amortisation is 2.1% per annum with
the remainder due in the 6 year. The loan facility is charged at
a fixed interest rate of 4.25%. This facility is secured over five property
assets.
Schuldschein
On 2 December 2019, the Group agreed to new loan facilities in the form of
unsecured Schuldschein for €20.0m. On 25 February 2020, the Group agreed new
loan facilities in the form of unsecured Schuldschein for €30.0m. In total
the unsecured facility amounts to €50.0m spread over five tranches and is
charged at a blended interest rate of 1.60% and average maturity of 2.6 years
with no amortisation. The first and second tranches totalling €15.0m were
repaid during the twelve month period ended 31 March 2023.
On 30 June 2023, the Group repaid an amount of €20.0m resulting in a
remaining €15.0m for the loan facility. No changes to the terms of the
facility have occurred during the twelve month period ended 31 March 2024.
Corporate bond I
On 22 June 2021, the Group raised its inaugural corporate bond for €400.0m.
The bond, which is listed at the Luxembourg Stock Exchange, has a term of five
years and an interest rate of 1.125% due annually on its anniversary date,
with the principal balance coming due on 22 June 2026. No changes to the terms
of the facility have occurred during the twelve month period ended 31 March
2024.
Corporate bond II
On 24 November 2021, the Group issued its second corporate bond for €300.0m.
The bond, which is listed at the Luxembourg Stock Exchange, has a term of
seven years and an interest rate of 1.75% due annually on its anniversary
date, with the principal balance coming due on 24 November 2028. No changes to
the terms of the facility have occurred during the twelve month period ended
31 March 2024.
EPRA loan to value ("LTV")
Proportionate
consolidation
Group Investment Total
in associates
31 March 2024 €m €m €m
Interest-bearing loans and borrowings(1) 245.1 52.2 297.3
Corporate bonds 700.0 - 700.0
Net payables(2) 75.3 5.9 81.2
Cash and cash equivalents (244.2) (7.4) (251.6)
Net debt (a) 776.2 50.7 826.9
Investment properties 2,210.6 126.2 2,336.8
Plant and equipment 7.8 - 7.8
Intangible assets 3.3 - 3.3
Loan to associates 45.1 - 45.1
Total property value (b) 2,266.8 126.2 2,393.0
EPRA LTV (a/b) 34.2% 40.2% 34.6%
Proportionate
consolidation
Group Investment Total
in associates
31 March 2023 €m €m €m
Interest-bearing loans and borrowings(1) 264.4 52.1 316.5
Corporate bonds 700.0 - 700.0
Net payables(2) 71.0 4.5 75.5
Cash and cash equivalents (124.3) (8.6) (132.9)
Net debt (a) 911.1 48.0 959.1
Investment properties 2,123.0 124.2 2,247.2
Assets held for sale 8.8 - 8.8
Plant and equipment 7.2 - 7.2
Intangible assets 4.1 - 4.1
Loan to associates 44.3 - 44.3
Total property value (b) 2,187.4 124.2 2,311.6
EPRA LTV (a/b) 41.7% 38.6% 41.5%
(1) Excludes corporate bonds as shown as a separate line.
(2) This is made up of deposits, trade and other receivables, derivative
financial instruments, trade and other payables and current tax liabilities.
24. Financial risk management objectives and policies
The Group's principal financial liabilities comprise bank loans, derivative
financial instruments and trade payables. The main purpose of these financial
instruments is to raise finance for the Group's operations. The Group has
various financial assets, such as trade receivables and cash, which arise
directly from its operations.
The main risks arising from the Group's financial instruments are credit risk,
liquidity risk, market risk, currency risk and interest rate risk.
Credit risk
Credit risk arises when a failure by counterparties to discharge their
obligations could reduce the amount of future cash inflows from financial
assets on hand at the reporting date. The credit risk on liquid funds is
limited because the counterparties are banks with high credit ratings assigned
by international credit rating agencies. The risk management policies employed
by the Group to manage these risks are discussed below.
In the event of a default by an occupational tenant, the Group will suffer a
rental shortfall and incur additional costs, including expenses incurred to
try and recover the defaulted amounts and legal expenses in maintaining,
insuring and marketing the property until it is re-let. During the year, the
Group monitored the tenants in order to anticipate and minimise the impact of
defaults by occupational tenants, as well as to ensure that the Group has a
diversified tenant base. The credit risk on tenants is also addressed through
the performance of credit checks, collection of deposits and regular
communication with the tenants.
Included in loans to associates are loans provided to associate entities from
Group entities. During the year the Group assessed credit risk relating to
loans to associates by reviewing business plans and monitoring cash collection
rates and the operational performance of each associate in order to anticipate
and minimise the impact of any impairment.
Included in other receivables are lease incentives. During the year the Group
monitored tenants in order to anticipate and minimise the impact of defaults
and move-outs from tenants which received lease incentives. The other
receivables in the maximum exposure to credit risk table below excludes those
lease incentives.
The carrying amount of financial assets represents the maximum credit
exposure. The maximum exposure to credit risk at the reporting date was:
31 March 2024 31 March 2023
€m €m
Net trade receivables 12.9 13.7
Other receivables(1) 20.6 13.6
Loans to associates 45.1 44.3
Derivative financial instruments - 1.3
Cash and cash equivalents 244.2 124.3
Total 322.8 197.2
(1) Other receivables includes deposits of €4.0m (2023: €4.1m) and a
receivable regarding the Stoke disposal of €3.5m (2023: €0.0m). It
excludes leases incentives of €3.9m (2023: €4.6m).
The ageing of trade receivables at the statement of financial position date
was:
31 March 2024 31 March 2023
Gross Impairment Gross Impairment
€m €m €m €m
0-30 days 8.4 (1.0) 13.9 (4.3)
31-120 days (past due) 1.1 (0.2) 1.3 (0.5)
More than 120 days 11.2 (6.6) 7.2 (3.9)
Total 20.7 (7.8) 22.4 (8.7)
The movement in the expected credit loss provision for impairment in respect
of trade receivables during the year was as follows:
31 March 2024 31 March 2023
€m €m
Balance as at the beginning of the year (8.7) (7.7)
Expected credit loss recognised (7.8) (8.7)
Expected credit loss reversed 8.7 7.7
Balance as at year end (7.8) (8.7)
The expected credit loss provision account for trade receivables is used to
record impairment losses unless the Group believes that no recovery of the
amount owing is possible; at that point the amounts considered irrecoverable
are written off against the trade receivables directly.
Most trade receivables are generally due one month in advance. The exception
is service charge balancing billing, which is due ten days after it has been
invoiced. Included in the Group's trade receivables are debtors with carrying
amounts of €12.9m (2023: €13.7m) that are past due at the reporting date
for which the Group has not provided significant impairment as there has not
been a significant change in credit quality and the amounts are still
considered recoverable.
No significant impairment has been recognised relating to non-current
receivables in the period due to unchanged credit quality and the amounts are
still considered recoverable.
Liquidity risk
Liquidity risk is the risk that arises when the maturity of assets and
liabilities does not match. An unmatched position potentially enhances
profitability but can also increase the risk of losses. The Group has
procedures with the objective of minimising such losses, such as maintaining
sufficient cash and other highly liquid current assets and having available an
adequate amount of committed credit facilities. The Group prepares cash flow
forecasts and continually monitors its ongoing commitments compared
to available cash. Cash and cash equivalents are placed with financial
institutions on a short-term basis which allows immediate access. This
reflects the Group's desire to maintain a high level of liquidity in order to
meet any unexpected liabilities that may arise due to the current financial
position. Similarly, accounts receivable are due either in advance (e.g. rents
and recharges) or within ten days (e.g. service charge reconciliations),
further bolstering the Group's management of liquidity risk.
The table below summarises the maturity profile of the Group's financial
liabilities, based on contractual undiscounted payments:
31 March 2024 Interest-bearing Derivative Trade Lease Total
loans financial and other liabilities €m
€m instruments payables €m
€m €m
Undiscounted amounts payable in:
6 months or less (12.3) - (56.2) (1.7) (70.2)
6 months-1 year (40.0) - - (1.7) (41.7)
1-2 years (23.2) - - (3.4) (26.6)
2-5 years (755.0) - - (9.9) (764.9)
5-10+ years (220.3) - - (93.6) (313.9)
(1,050.8) - (56.2) (110.3) (1,217.3)
Interest 95.4 - - 72.5 167.9
(955.4) - (56.2) (37.8) (1,049.4)
31 March 2023 Interest-bearing Derivative Trade Lease Total
loans financial and other liabilities €m
€m instruments payables €m
€m €m
Undiscounted amounts payable in:
6 months or less (28.5) (0.8) (59.0) (1.6) (89.9)
6 months-1 year (229.4) (0.4) - (1.7) (231.5)
1-2 years (38.8) - - (3.3) (42.1)
2-5 years (421.3) - - (10.0) (431.3)
5-10+ years (303.4) - - (94.7) (398.1)
(1,021.4) (1.2) (59.0) (111.3) (1,192.9)
Interest 46.3 1.2 - 71.7 119.2
(975.1) - (59.0) (39.6) (1,073.7)
Foreign currency risk
The Group's exposure to currency risk relates primarily to the Group's
exposure to the GBP and to a lesser extent the South African rand. This
exposure is driven primarily by the UK operating segments (BizSpace Group). In
addition thereto, the Group has dividend obligations in both the GBP and South
African rand. The foreign currency risk in relation to the GBP is mitigated as
a result of the BizSpace Group generating GBP denominated income in order to
fund its obligations when they come due and, in addition, the Group's GBP
dividend obligations. The Group holds small deposits in South African rand for
the purposes of working capital and dividend obligations.
Interest rate risk
The Group's exposure to interest rate risk relates primarily to the Group's
long-term floating rate debt obligations. The Group's policy is to mitigate
interest rate risk by ensuring that a minimum of 80% of its total borrowing is
at fixed or capped interest rates by taking out fixed rate loans or derivative
financial instruments to hedge interest rate exposure, or interest rate caps.
A change in interest will only have an impact on loans fixed by a swap. An
increase of 100 bps in interest rate would result in a decreased post tax
profit in the consolidated income statement of €0.05m (2023: €0.04m)
(excluding the movement on derivative financial instruments) and a decrease of
100 bps in interest rate would result in an increased post tax profit in the
consolidated income statement of €0.05m (2023: €0.04m) (excluding the
movement on derivative financial instruments).
The following table sets out the carrying amount, by maturity, of the Group's
financial instruments that are exposed to interest rate risk:
31 March 2024 Within 1 year 1-2 years 2-3 years 3-4 years 4+ years Total
€m €m €m €m €m €m
Schuldschein (5.0) - - - - (5.0)
31 March 2023 Within 1 year 1-2 years 2-3 years 3-4 years 4+ years Total
€m €m €m €m €m €m
Deutsche Pfandbriefbank AG (6.2) - - - - (6.2)
Schuldschein - (5.0) - - - (5.0)
The other financial instruments of the Group that are not included in the
above tables have fixed interest rates and are therefore not subject to
interest rate risk.
Market risk
The Group's activities are within the real estate market, exposing it to very
specific industry risks.
The yields available from investments in real estate depend primarily on the
amount of revenue earned and capital appreciation generated by the relevant
properties, as well as expenses incurred. If properties do not generate
sufficient revenues to meet operating expenses, including debt service and
capital expenditure, the yield is affected, and it can have an impact on the
decision of our investors and banks.
Revenues from properties may be adversely affected by: the general economic
climate; local conditions, such as an oversupply of properties, or a reduction
in demand for properties, in the market in which the Group operates; the
attractiveness of the properties to the tenants; the quality of the
management; competition from other available properties; and increased
operating costs.
In addition, the Group's profit would be adversely affected if a significant
number of tenants were unable to pay rent or its properties could not be
rented on favourable terms. Certain significant expenditures associated with
each equity investment in real estate (such as external financing costs, real
estate taxes and maintenance costs) are generally not reduced when
circumstances cause a reduction in revenue from properties. By diversifying
in product, risk categories and tenants, the Group expects to lower the risk
profile of the portfolio.
Capital management
For the purpose of the Group's capital management, capital includes all equity
reserves attributable to the equity holders of the parent. The Group seeks to
enhance shareholder value both by investing in the business so as to improve
the return on investment and by managing the capital structure. The Group
manages its capital structure and in doing so takes into consideration the
impact of changes in economic conditions. The Group assesses its capital
management through the total shareholder accounting return which was 7.2% as
at 31 March 2024 (2023: 5.3%) and the net loan to value which was 33.9% as at
31 March 2024 (2023: 41.6%) as set out in the tables below:
The calculation of total shareholder accounting return:
31 March 2024 31 March 2023
€ €
Movement in adjusted NAV per share 1.91c 0.70c
Dividend paid per share, six months ended 30 September 3.00c 2.70c
Dividend paid per share, six months ended 31 March 2.98c 2.37c
Total 7.89c 5.77c
Adjusted NAV per share for prior year 109.21c 108.51c
Total shareholder accounting return % 7.2% 5.3%
The calculation of net loan to value:
31 March 2024 31 March 2023
€m €m
Carrying amount of interest-bearing loans and borrowings 945.1 964.4
Unamortised borrowing costs 10.3 10.7
Less cash and cash equivalents (not including cash restricted under (214.5) (99.2)
contractual terms)
Total 740.9 875.9
Book value of owned investment properties(1) 2,186.7 2,107.3
Net loan to value ratio 33.9% 41.6%
(1) Includes assets held for sale.
To maintain or adjust the capital structure, the Group may undertake a number
of actions including but not limited to share issuances and changes to its
distribution policy to shareholders. The transfer of amounts recorded in share
capital to other distributable reserves is to increase the equity reserves
attributable to the owners of the Company. The Group's distribution policy
takes into account the concept of solvency under The Companies (Guernsey)
Law, 2008. The Group is not subject to externally imposed capital requirements
other than those related to the covenants of the bank loan facilities. There
have been no breaches of the financial covenants of any interest-bearing loans
and borrowings in the current year (note 2(c)).
25. Financial instruments
Fair values
Set out below is a comparison by category of carrying amounts and fair values
of all of the Group's financial instruments that are carried in the financial
statements (excluding assets held for sale and liabilities directly associated
with assets held for sale):
Fair value 31 March 2024 31 March 2023
hierarchy level
Carrying Fair Carrying Fair
amount value amount value
€m €m €m €m
Financial assets
Cash and cash equivalents 244.2 244.2 124.3 124.3
Trade and other receivables(1) 33.5 33.5 27.3 27.3
Loans to associates 2 45.1 45.1 44.3 44.3
Derivative financial instruments 2 - - 1.3 1.3
Financial liabilities
Trade and other payables 56.2 56.2 59.0 59.0
Interest-bearing loans and borrowings(2)
Floating rate borrowings 2 5.0 5.0 11.2 11.2
Floating rate borrowings - hedged(3) 2 - - 51.1 51.1
Fixed rate borrowings 2 950.4 835.7 912.8 813.6
All amounts in the table above are carried at amortised cost except for
derivative financial instruments which are held at fair value.
(1) This is made up of net trade receivables, other receivables (excluding
lease incentives) and deposits.
(2) Excludes loan issue costs.
(3) The Group held interest rate swap contracts designed to manage the
interest rate and liquidity risks of expected cash flows of its borrowings
with the variable rate facilities with Deutsche Pfandbriefbank AG. Please
refer to note 23 for details of swap contracts.
Fair value hierarchy
For financial assets or liabilities measured at amortised cost and whose
carrying value is a reasonable approximation to fair value there is no
requirement to analyse their value in the fair value hierarchy.
The below analyses financial instruments measured at fair value into a fair
value hierarchy based on the valuation technique used to determine fair
value:
Level 1: quoted prices (unadjusted) in active markets for identical assets
or liabilities;
Level 2: inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3: inputs for the asset or liability that are not based on observable
market data (unobservable inputs).
The Group holds interest rate swap contracts which are reset on a quarterly
basis. The fair value of interest rate swaps is based on broker quotes. Those
quotes are tested for reasonableness by discounting estimated future cash
flows based on the terms and maturity of each contract and using market
interest rates for a similar instrument at the measurement date. The average
interest rate is based on the outstanding balances at the end of the
reporting period. The interest rate swap is measured at fair value with
changes recognised in profit or loss.
The fair values of the loans and borrowings have been calculated based on a
discounted cash flow model using the prevailing market rates of interest.
26. Issued share capital
Authorised Number Share
of shares capital
€m
Ordinary shares of no par value Unlimited -
As at 31 March 2024 and 31 March 2023 Unlimited -
Issued and fully paid Number Share
of shares capital
€m
As at 31 March 2022 1,166,880,684 -
Issued ordinary shares 3,702,993 1.4
Transfer of share capital to other distributable reserves - (1.4)
Shares issued to Employee Benefit Trust (2,500,000) -
Shares allocated by the Employee Benefit Trust 287,545 -
As at 31 March 2023 1,168,371,222 -
Issued ordinary shares 172,276,384 164.1
Transfer of share capital to other distributable reserves - (164.1)
Shares issued to Employee Benefit Trust - -
Shares allocated by the Employee Benefit Trust 200,541 -
As at 31 March 2024 1,340,848,147 -
Holders of the ordinary shares are entitled to receive dividends and other
distributions and to attend and vote at any general meeting. Shares held in
treasury are not entitled to receive dividends or to vote at general meetings.
Pursuant to an equity raise of €165.3m on 24 November 2023, the Company
issued 170,417,384 ordinary shares at an issue price of £0.86, resulting in
the Company's overall issued share capital being 1,348,140,369 ordinary
shares. Costs associated with the equity raise amounted to €3.3m.
In addition, during the year the Company issued 1,859,000 shares in relation
to the exercise of the LTIP 2018 (June 2020 grant) as per note 8. These shares
were issued at nil-cost, and the fair value of these shares recorded in the
share capital account has been transferred back to the other distributable
reserves.
Treasury shares held by the Employee Benefit Trust are disclosed as own shares
held. During the year nil shares were acquired and 200,541 were allocated by
the Employee Benefit Trust in relation to the issue of DBP shares as per note
8. A total of 7,292,222 own shares purchased at an average share price of
€1.1108 are held by the Employee Benefit Trust (2023: 7,492,763 own shares
purchased at an average share price of €1.1185). The total number of shares
with voting rights was 1,348,140,369 (2023: 1,175,863,985). No votes are cast
in respect of the shares held in the Employee Benefit Trust in connection
with the Company's share plans and dividends paid and payable are subject to
a standing waiver.
All shares issued in the year were issued under general authority. No shares
were bought back in the year (2023: none) and there are no Treasury Shares
held directly by the Company at the year end (2023: none).
27. Other reserves
Other distributable reserve
This reserve comprises of amounts in relation to scrip dividend transfers from
share capital, share-based payment transactions and share buy-backs. The
balance of €605.7m in total at year end (2023: €516.4m) is considered
distributable.
Foreign currency translation reserve
The Group holds a foreign currency translation reserve which relates to
foreign currency translation effect during the course of the business with the
UK segment.
The following table illustrates the movement in the foreign currency
translation reserve:
31 March 2024 31 March 2023
€m €m
Balance as at the beginning of the year (18.9) (1.7)
Foreign currency translation 12.9 (17.2)
Balance as at year end (6.0) (18.9)
The movement in the year of €12.9m gain is a result of an increasing GBP/EUR
rate which is higher at current year end compared with 31 March 2023 (2023:
€17.2m loss).
28. Dividends
On 20 November 2023, the Company announced a dividend of 3.00c per share, with
a record date of 15 December 2023 for UK shareholders and 14 December 2023 for
South African ("SA") shareholders and payable on 25 January 2024. On the
record date, 1,348,140,369 shares were in issue. Since there were no shares
held in treasury, 1,348,140,369 shares (including shares held by the Employee
Benefit Trust) were entitled to participate in the dividend. The Company's
Employee Benefit Trust waived its rights to the dividend. The Company offered
a dividend reinvestment plan ("DRIP") to shareholders as an alternative to a
cash dividend. DRIP allows shareholders to reinvest the dividend to purchase
additional shares in the Company in the open market, not newly issued shares
by the Company. Holders of 2,401,799 shares elected to receive the dividend in
ordinary shares under the DRIP alternative representing 157,365 shares from
the UK share register with an average amount of £0.857 per share and
2,244,434 shares from the South African register with an average amount of R
21.473 while the remaining shares opted for a cash dividend with a value of
€40.3m.
On 5 June 2023, the Company announced a dividend of 2.98c per share, with a
record date of 14 July 2023 for the UK and SA shareholders and payable on 17
August 2023. On the record date, 1,177,722,985 shares were in issue. Since
there were no shares held in treasury, 1,177,722,985 shares (including shares
held by the Employee Benefit Trust) were entitled to participate in the
dividend. The Company's Employee Benefit Trust waived its rights to the
dividend, reducing the total dividend (payable in cash) from €35.1m to
€34.9m (€35.0m as at settlement date).
On 21 November 2022, the Company announced a dividend of 2.70c per share, with
a record date of 9 December 2022 for the UK and SA shareholders and payable on
19 January 2023. On the record date, 1,175,863,985 shares were in issue. Since
there were no shares held in treasury, 1,175,863,985 shares (including shares
held by the Employee Benefit Trust) were entitled to participate in the
dividend. The Company's Employee Benefit Trust waived its rights to the
dividend, reducing the total dividend (payable in cash) from €31.7m to
€31.5m (€31.5m as at settlement date).
On 13 June 2022, the Company announced a dividend of 2.37c per share, with a
record date of 8 July 2022 for the UK and SA shareholders and payable on 18
August 2022. On the record date, 1,172,160,992 shares were in issue. Since
there were no shares held in treasury, 1,172,160,992 shares (including shares
held by the Employee Benefit Trust) were entitled to participate in the
dividend. Holders of 61,453,275 shares elected to receive the dividend in
ordinary shares under the scrip dividend alternative, representing a dividend
of €1.4m (€1.4m as at settlement date) while holders of 1,110,707,717
shares opted for a cash dividend with a value of €26.3m. The Company's
Employee Benefit Trust waived its rights to the dividend, reducing the cash
payable to €26.2m (€26.3m as at settlement date). The total dividend was
€27.7m (€27.7m as at settlement date).
The Group's profit attributable to the equity holders of the Company for the
year was €122.4m (2023: €77.2m). The Board has authorised a dividend in
respect of the second half of the financial year ended 31 March 2024 of 3.05c
per share representing 69% of FFO, an increase of 2.2% on the equivalent
dividend last year, which represented 65% of FFO ((1)). The total dividend for
the year is 6.05c, an increase of 6.5% on the 5.68c total dividend for the
year ended 31 March 2023.
It is expected that, for the dividend authorised relating to the six month
period ended 31 March 2024, the ex-dividend date will be 27 June 2024 for
shareholders on the SA register and 26 June 2024 for shareholders on the UK
register. It is further expected that for shareholders on both registers the
record date will be 28 June 2024 and the dividend will be paid on 25 July
2024. A detailed dividend announcement was made on 3 June 2024.
The dividend paid per the statement of changes in equity is the value of the
cash dividend.
(1) Adjusted profit before tax adjusted for foreign exchange effects,
depreciation and amortisation (excluding depreciation relating to IFRS 16),
amortisation of financing fees, adjustments in respect of IFRS 16 and current
tax receivable/incurred excluding tax on disposals.
The dividend per share was calculated as follows:
Year ended Year ended
31 March 2024 31 March 2023
€m €m
Reported profit before tax 115.2 87.0
Adjustments for:
(Gain)/loss on revaluation of investment properties (12.2) 9.8
Loss on revaluation relating to leased investment properties (0.9) (1.5)
Gain of disposals of properties (0.9) (4.7)
Loss on revaluation of investment property from associates and related tax 1.6 0.1
Other adjusting items(1) 5.9 6.2
Change in fair value of financial derivatives 1.3 (0.9)
Adjusted profit before tax 110.0 96.0
Adjustments for:
Foreign exchange effects(2) (3.4) 0.2
Depreciation and amortisation (excluding depreciation relating to IFRS 16) 3.3 3.4
Amortisation of financing fees 3.5 3.3
Adjustment in respect of IFRS 16 0.6 2.2
Current taxes incurred (see note 10) (4.8) (3.0)
Add back current tax relating to disposals 1.0 -
Funds from operations, year ended 31 March 110.2 102.1
Funds from operations, six months ended 30 September 53.0 48.5
Funds from operations, six months ended 31 March 57.2 53.6
Dividend pool, six months ended 30 September 35.1 31.5
Dividend pool, six months ended 31 March(3) 40.9 34.8
Dividend per share, six months ended 30 September 3.00c 2.70c
Dividend per share, six months ended 31 March 3.05c 2.98c
(1) Includes the effect of other expenses not included in FFO and share
awards. See note 11 for details.
(2) Management decided to exclude foreign exchange effects from the funds from
operations calculation of €3.4m (2023: (0.2)m).
(3) Calculated as 69% of FFO of 4.42c per share (2023: 4.59c per share using
65% of FFO) based on average number of shares outstanding of 1,294,286,020
(2023: 1,168,134,871).
For more information on adjusted profit before tax and funds from operations,
refer to Annex 1.
Calculations contained in this table are subject to rounding differences.
29. Notes to cash flow
Changes in liabilities arising from financing activities
Reconciliation of movements of liabilities arising from financing activities:
31 March Cash flows New leases Changes in Other(1] 31 March
2023 €m €m fair values €m 2024
€m €m €m
Interest-bearing loans and borrowings 964.4 (22.8) - - 3.5 945.1
Lease liabilities 39.6 (3.3) - - 1.5 37.8
Derivative financial instruments (1.3) - - 1.3 -
Total 1,002.7 (26.1) - 1.3 5.0 982.9
31 March Cash flows New leases Changes in Other(1] 31 March
2022 €m €m fair values €m 2023
€m €m €m
Interest-bearing loans and borrowings 981.5 (20.4) - - 3.3 964.4
Lease liabilities 38.7 (2.3) 2.8 - 0.4 39.6
Derivative financial instruments (0.3) - - (0.9) (0.1) (1.3)
Total 1,019.9 (22.7) 2.8 (0.9) 3.60 1,002.7
(1) Changes in the capitalised finance charges on all loans, foreign exchange
differences and accretion of interest on lease liabilities.
30. Related parties
Related parties are defined as those persons and companies that control the
Group, or that are controlled, jointly controlled or subject to significant
influence by the Group.
Key management personnel
Fees paid to people considered to be key management personnel (the Company
Board of Directors (excluding the Senior Independent Director) and the
Executive Committee members) of the Group during the year include:
Consolidated income statement Year ended Year ended
31 March 2024 31 March 2023
€m €m
Directors' fees 0.5 0.5
Salary and employee benefits 6.4 5.0
Share-based payments 3.0 3.0
Total 9.9 8.5
Included within salary and employee benefits are pension contributions
amounting to €0.2m (2023: €0.2m).
There are no payables as at 31 March 2024 from Directors' fees and salary and
employee benefits (2023: €nil).
Directors' emoluments have been disclosed in the Annual report in the
Remuneration report under the 'Single figure table' and in the additional
disclosures in respect of the single figure table section on pages 114 and
115.
Associates
The following balances and transactions with associates exist as at the
reporting date:
Consolidated statement of financial position 31 March 2024 31 March 2023
€m €m
Loans to associates 45.1 44.3
Trade and other receivables 4.6 4.0
Total 49.7 48.3
Trade and other receivables relate to amounts owed from the services supplied
to the associates and are due to be settled in the normal course of business.
As a result of unchanged credit quality, no material expected credit losses
have been recognised in the year.
Consolidated income statement Year ended Year ended
31 March 2024 31 March 2023
€m €m
Services supplied 19.7 15.1
Interest income 2.2 2.2
Total 21.9 17.3
Services provided to associates primarily relate to the provision of property
and asset management services. Providing these services, the Group generated
service charge income from managed properties and other income from managed
properties of €19.7m (2023: €15.1m) as set out in note 5.
A performance fee arrangement is in place between the associates and the
Group. Within services supplied, the performance fee was €0.8m during the
year (2023: €nil).
For details regarding the investment in associates, including dividends
received, see note 19.
31. Capital and other commitments
As at year end, the Group had contracted capital expenditure for development
and enhancements on existing properties of €20.9m (2023: €14.9m) and
capital commitments amounting to €nil (2023: €nil).
The above noted were committed but not yet provided for in the financial
statements.
32. Operating lease arrangements
Group as lessor
All properties leased by the Group are under operating leases and the future
minimum lease payments receivable under non‑cancellable leases are as
follows:
31 March 2024 31 March 2023
€m €m
Less than 1 year 147.9 125.3
1-2 years 92.5 98.2
2-3 years 62.7 76.6
3-4 years 44.2 58.7
4-5 years 25.6 36.7
More than 5 years 50.9 68.1
Total 423.8 463.6
The Group leases out its investment properties under operating leases. Most
operating leases are for terms of one to ten years.
33. List of subsidiary undertakings and investments in associates
The Group consists of 118 subsidiary companies (2023: 122 subsidiary
companies). All subsidiaries are consolidated in full in accordance with IFRS.
The principal activity of the subsidiaries is the investment in, and
development of, commercial property to provide conventional and flexible
workspace in Germany and the UK.
Company name Country Ownership at Ownership at
of incorporation 31 March 2024 31 March 2023
% %
BizSpace Acquisitions Ltd Jersey 100.00 100.00
BizSpace Developments Ltd(1) UK 100.00 100.00
BizSpace Green Holdings Ltd UK 100.00 100.00
BizSpace Green Operations Ltd UK 100.00 100.00
BizSpace Holdings Ltd UK 100.00 100.00
BizSpace II Ltd UK 100.00 100.00
BizSpace Ltd UK 100.00 100.00
BizSpace Property 100 Ltd Jersey 100.00 100.00
BizSpace Property I Ltd UK 100.00 100.00
BizSpace Property SSP Ltd UK 100.00 100.00
Curris Facilities & Utilities Management GmbH Germany 100.00 100.00
DDS Aspen B.V. Netherlands 100.00 100.00
DDS Bagnut B.V. Netherlands 100.00 100.00
DDS Business Centres B.V. Netherlands 100.00 100.00
DDS Coconut B.V. Netherlands 100.00 100.00
DDS Conferencing & Catering GmbH Germany 100.00 100.00
DDS Elm B.V. Netherlands 100.00 100.00
DDS Fir B.V. Netherlands 100.00 100.00
DDS Hawthorn B.V. Netherlands 100.00 100.00
DDS Hazel B.V. Netherlands 100.00 100.00
DDS Hyacinth B.V. Netherlands 100.00 100.00
DDS Lark B.V. Netherlands 100.00 100.00
DDS Mulberry B.V. Netherlands 100.00 100.00
DDS Rose B.V. Netherlands 100.00 100.00
DDS Walnut B.V. Netherlands 100.00 100.00
DDS Yew B.V. Netherlands 100.00 100.00
Helix FinCo Ltd Jersey 100.00 100.00
Helix Investments Ltd(2) Jersey 100.00 100.00
Helix Property Ltd Jersey 100.00 100.00
LB² Catering and Services GmbH Germany 100.00 100.00
M25 Business Centres Ltd UK 100.00 100.00
Marba Apple B.V. Netherlands 100.00 100.00
Marba Bamboo B.V. Netherlands 100.00 100.00
Marba Cherry B.V. Netherlands 100.00 100.00
Marba Daffodil B.V. Netherlands 100.00 100.00
Marba Holland B.V.(2) Netherlands 100.00 100.00
Marba Lavender B.V. Netherlands 100.00 100.00
Marba Mango B.V. Netherlands 100.00 100.00
Marba Olive B.V. Netherlands 100.00 100.00
Marba Sunflower B.V. Netherlands 100.00 100.00
Marba Violin B.V. Netherlands 100.00 100.00
Marba Willstätt B.V. Netherlands 100.00 100.00
SFG NOVA Construction and Services GmbH Germany 100.00 100.00
Sirius Alder B.V.(3) Netherlands 100.00 100.00
Sirius Aloe GmbH & Co. KG Germany 100.00 100.00
Sirius Aster GmbH & Co. KG Germany 100.00 100.00
Sirius Beech B.V. Netherlands 100.00 100.00
Sirius Birch GmbH & Co. KG Germany 100.00 100.00
Sirius Coöperatief B.A.(2) Netherlands 100.00 100.00
Sirius Dahlia GmbH & Co. KG Germany 100.00 100.00
Sirius Facilities (UK) Ltd(2) UK 100.00 100.00
Sirius Facilities GmbH Germany 100.00 100.00
Sirius Finance (Cyprus) Ltd(2, 4) Cyprus 100.00 100.00
Sirius Four B.V. Netherlands 100.00 100.00
Sirius Frankfurt Erste GmbH & Co. KG Germany 100.00 100.00
Sirius Frankfurt Zweite GmbH & Co. KG Germany 100.00 100.00
Sirius Gum B.V. Netherlands 100.00 100.00
Sirius Jasmine GmbH & Co. KG Germany 100.00 100.00
Sirius Juniper B.V. Netherlands 100.00 100.00
Sirius Kale GmbH & Co. KG Germany 100.00 100.00
Sirius Krefeld Erste GmbH & Co. KG Germany 100.00 100.00
Sirius Lily B.V. Netherlands 100.00 100.00
Sirius Lotus GmbH & Co. KG Germany 100.00 100.00
Sirius Management One GmbH Germany 100.00 100.00
Sirius Management Two GmbH Germany 100.00 100.00
Sirius Management Three GmbH Germany 100.00 100.00
Sirius Management Four GmbH Germany 100.00 100.00
Sirius Management Five GmbH Germany 100.00 100.00
Sirius Management Six GmbH Germany 100.00 100.00
Sirius Management Seven GmbH Germany 100.00 100.00
Sirius Management Eight GmbH Germany 100.00 100.00
Sirius Management Nine GmbH Germany 100.00 100.00
Sirius Management Ten GmbH Germany 100.00 100.00
Sirius Narcissus GmbH & Co. KG Germany 100.00 100.00
Sirius Oak B.V.(5) Netherlands 100.00 100.00
Sirius One B.V. Netherlands 100.00 100.00
Sirius Orange B.V. Netherlands 100.00 100.00
Sirius Palm B.V. Netherlands 100.00 100.00
Sirius Pepper GmbH & Co. KG Germany 100.00 100.00
Sirius Pine B.V. Netherlands 100.00 100.00
Sirius Renewable Energy GmbH Germany 100.00 100.00
Sirius Tamarack B.V. Netherlands 100.00 100.00
Sirius Three B.V. Netherlands 100.00 100.00
Sirius Thyme B.V. Netherlands 100.00 100.00
Sirius Tulip B.V. Netherlands 100.00 100.00
Sirius Two B.V. Netherlands 100.00 100.00
Sirius UK1 Ltd((2)) UK 100.00 100.00
Sirius UK2 Ltd(1, 2) UK 100.00 100.00
Sirius Willow B.V. Netherlands 100.00 100.00
Marba Bonn B.V. Netherlands 99.73 99.73
Marba Bremen B.V. Netherlands 99.73 99.73
Marba Brinkmann B.V.(6) Netherlands 99.73 99.73
Marba Cedarwood B.V. Netherlands 99.73 99.73
Marba Chestnut B.V. Netherlands 99.73 99.73
Marba Dutch Holdings B.V. Netherlands 99.73 99.73
Marba Foxglove B.V. Netherlands 99.73 99.73
Marba HAG B.V. Netherlands 99.73 99.73
Marba Hornbeam B.V. Netherlands 99.73 99.73
Marba Königswinter B.V. Netherlands 99.73 99.73
Marba Maintal B.V. Netherlands 99.73 99.73
Marba Marigold B.V. Netherlands 99.73 99.73
Marba Merseburg B.V. Netherlands 99.73 99.73
Marba Mimosa B.V. Netherlands 99.73 99.73
Marba Regensburg B.V. Netherlands 99.73 99.73
Marba Saffron B.V. Netherlands 99.73 99.73
Marba Troisdorf B.V. Netherlands 99.73 99.73
Sirius Acerola GmbH & Co. KG Germany 99.73 99.73
Sirius Almond GmbH & Co. KG Germany 99.73 99.73
Sirius Bluebell GmbH & Co. KG Germany 99.73 99.73
Sirius Cypress GmbH & Co. KG Germany 99.73 99.73
Sirius Grape GmbH & Co. KG Germany 99.73 99.73
Sirius Hibiscus GmbH & Co. KG Germany 99.73 99.73
Sirius Indigo GmbH & Co. KG Germany 99.73 99.73
Sirius Mayflower GmbH & Co. KG Germany 99.73 99.73
Sirius Oyster GmbH & Co. KG Germany 99.73 99.73
Sirius Administration One GmbH & Co KG Germany 94.80 94.80
Sirius Administration Two GmbH & Co KG Germany 94.80 94.80
Verwaltungsgesellschaft Gewerbepark Bilderstöckchen GmbH Germany 94.15 94.15
(1) During the twelve month period ended 31 March 2024 BizSpace Developments
Ltd issued 20,744,551 preference shares of nominal value £1.00 (€1.15) each
that were fully subscribed to by Sirius UK2 Ltd. The funds raised were used to
finance the acquisition of assets to the investment property portfolio.
(2) Subsidiary company directly held by the parent entity, Sirius Real Estate
Limited.
(3) Sirius Alder B.V. merged with Sirius Ivy B.V. on 29 December 2023. For tax
and accounting purposes the merger is effective retrospectively from 1 April
2023.
(4) During the twelve month period ended 31 March 2024 Sirius Finance (Cyprus)
Ltd issued 63,000,000 ordinary shares of nominal value €1.00 each that were
fully subscribed to by the parent entity, Sirius Real Estate Limited. The
funds raised were used to enable the acquisition of assets to the investment
property portfolio.
(5) Sirius Oak B. V. merged with Sirius Ash B.V. and Sirius Mannheim B.V. on
22 November 2023. For tax and accounting purposes the merger is effective
retrospectively from 1 April 2023.
(6) Marba Brinkmann B.V. merged with Marba Catalpa B.V. on 30 March 2024. For
tax and accounting purposes the merger is effective retrospectively from 1
January 2024.
Investment in associates which are accounted for with the equity method:
Company name Country Ownership at Ownership at
of incorporation 31 March 2024 31 March 2023
% %
DDS Daisy B.V. Netherlands 35.00 35.00
DDS Edelweiss B.V. Netherlands 35.00 35.00
DDS Lime B.V. Netherlands 35.00 35.00
DDS Maple B.V. Netherlands 35.00 35.00
Sirius Boxwood B.V. Netherlands 35.00 35.00
Sirius Laburnum B.V. Netherlands 35.00 35.00
Sirius Orchid B.V. Netherlands 35.00 35.00
Sirius Pear B.V. Netherlands 35.00 35.00
34. Post balance sheet events
On 9 February 2024, the Group notarised the acquisition of an asset in
Göppingen, for €21.4m. The mixed-use multi-tenanted business park which
comprises 35,160 sqm of storage, industrial and office space is 86% occupied.
The transaction completed in April 2024.
On 28 February 2024, the Group notarised the acquisition of an asset in
Klipphausen, for €14.6m. The mixed-use single-tenanted business park which
comprises 17,683 sqm of storage, industrial and office space is 100% occupied.
The transaction completed in April 2024.
On 23 January 2024, the Group notarised the acquisition of an asset in
Dresden, for €1.1m. The mixed-use site which comprises 1,183 sqm of storage,
residential and office space is 41% occupied. The transaction completed in
April 2024.
On 27 March 2024, the Group notarised the acquisition of an asset in
Gloucestershire, UK, for £50.1m (€58.6m). The mixed-use site which
comprises 139,400 sqm of storage, industrial and office space is 81% occupied.
The transaction completed in April 2024.
On 30 April 2024, the Group performed a tap issue for its €300.0m corporate
bond issued in November 2021 resulting in approximately €51.3m additional
debt, such bonds carry a coupon of 1.75% and were issued at 86.67cents. The
coupon of 1.75% is due annually on its anniversary date, with the principal
balance coming due on 24 November 2028. The Group intends to utilise these
proceeds for fuelling its acquisition pipeline and corporate purposes.
BUSINESS ANALYSIS (UNAUDITED INFORMATION)
Non-IFRS measures
Year ended Year ended
31 March 2024 31 March 2023
€m €m
Total profit for the year attributable to the owners of the Company 107.8 79.6
(Deduct gain)/add loss on revaluation of investment properties (12.2) 9.8
Add loss/(deduct gain) on disposal of properties (net of related tax) 0.1 (4.7)
Change in fair value of derivative financial instruments 1.3 (0.9)
Deferred tax in respect of EPRA earnings adjustments 2.5 4.3
NCI relating to revaluation (net of related tax) 0.0 -
NCI relating to gain on disposal of properties (net of related tax) 0.0 -
Add loss on revaluation of investment property relating to associates 1.6 0.5
Tax in relation to the revaluation gains/losses on investment property (0.0) (0.4)
relating to associates
EPRA earnings 101.1 88.2
Add/(deduct) change in deferred tax relating to derivative financial 0.2 (0.1)
instruments
(Deduct)/add change in fair value of derivative financial instruments (1.3) 0.9
NCI in respect of the above - -
Headline earnings after tax 100.0 89.0
Add/(deduct) change in fair value of derivative financial instruments (net of 1.1 (0.8)
related tax and NCI)
Deduct revaluation loss relating to leased investment properties (net of (0.8) (1.5)
related tax)
Add adjusting items(1) (net of related tax and NCI) 5.9 6.2
Adjusted earnings after tax 106.2 92.9
(1) See note 11 to the financial statements.
For more information on EPRA earnings refer to Annex 1.
Year ended Year ended
31 March 2024 31 March 2023
€m €m
EPRA earnings 101.1 88.2
Weighted average number of ordinary shares 1,231,991,541 1,167,757,975
EPRA earnings per share (cents) 8.21 7.55
Headline earnings after tax 100.0 89.0
Weighted average number of ordinary shares 1,231,991,541 1,167,757,975
Headline earnings per share (cents) 8.12 7.62
Adjusted earnings after tax 106.2 92.9
Weighted average number of ordinary shares 1,231,991,541 1,167,757,975
Adjusted earnings per share (cents) 8.62 7.96
Geographical property analysis - owned investment properties
Germany
March 2024 No. of owned Total sqm Occupancy Rate psqm Annualised % of Value Gross Net WALE WALE
properties 000 € rent roll portfolio by €m (2) yield yield rent sqm
€m annualised
rent roll
Frankfurt 16 339 85.8% 7.76 27.1 21% 344.1 7.9% 7.2% 2.6 2.5
Berlin 4 104 95.7% 9.00 10.7 8% 171.2 6.3% 6.3% 2.4 2.4
Stuttgart 9 330 91.5% 5.63 20.4 16% 256.0 8.0% 7.5% 3.1 3.2
Cologne 8 147 89.7% 8.87 14.0 11% 183.1 7.7% 7.3% 2.7 2.8
Munich 3 123 81.9% 8.89 10.8 8% 194.6 5.5% 4.8% 1.3 1.3
Düsseldorf 15 371 78.0% 6.92 24.0 19% 308.0 7.8% 6.6% 3.0 3.3
Hamburg 4 92 83.6% 5.63 5.2 4% 63.2 8.2% 7.5% 1.5 1.4
Other 9 246 82.2% 7.21 17.5 13% 205.0 8.5% 7.9% 2.6 2.4
Total Germany 68 1,752 85.2% 7.24 129.7 100% 1,725.2 7.5% 6.8% 2.7 2.7
UK
March 2024 No. of owned Total sqm Occupancy Rate psqm Annualised % of Value Net WALE WALE
properties 000 €(1) rent roll portfolio by €m(2) yield rent sqm
€m(1) annualised
rent roll
Midlands 10 50 84.0% 15.68 9.4 14% 61.8 9.6% 1.1 1.5
North 13 72 91.0% 11.41 9.9 15% 65.1 9.3% 0.8 1.0
North East and North 14 95 89.3% 7.12 8.1 12% 66.6 8.3% 1.6 2.1
North West 13 88 86.6% 10.82 11.4 18% 85.5 9.7% 1.1 1.0
South East 13 35 81.1% 27.31 11.6 18% 103.8 6.9% 1.5 1.5
South West 11 62 82.3% 19.84 14.6 23% 78.8 12.8% 1.0 1.0
Total UK 74 402 86.6% 15.58 65.0 100% 461.6 9.3% 1.2 1.4
(1) The Group's UK business charges licence customers an all-inclusive rate,
which includes an implicit element of service charge.
(2) Book value of owned investment properties including assets held for sale.
Usage analysis
Germany
Usage Total % of total Occupied % of occupied Annualised % of annualised Vacant Rate psqm
sqm sqm sqm sqm rent roll rent roll sqm €
€m
Office 588,698 33.6% 475,059 31.8% 49.9 38.5% 113,639 8.76
Storage 573,721 32.8% 497,058 33.3% 32.4 25.0% 76,663 5.42
Production 354,537 20.2% 335,588 22.5% 21.4 16.5% 18,949 5.32
Smartspace 110,519 6.3% 77,566 5.2% 8.8 6.8% 32,953 9.51
Other(1) 124,123 7.1% 107,785 7.2% 17.2 13.2% 16,338 13.27
Total Germany 1,751,598 100.0% 1,493,056 100.0% 129.7 100.0% 258,542 7.24
UK
Usage Total % of total Occupied % of occupied Annualised % of annualised Vacant Rate psqm
sqm sqm sqm sqm rent roll rent roll Sqm € (3)
€m(3)
Office 132,050 32.9% 106,689 30.7% 39.8 61.2% 25,361 31.09
Workshop 253,135 63.0% 227,725 65.5% 23.1 35.5% 25,410 8.45
Storage 2,098 0.5% 1,412 0.4% 0.3 0.5% 686 17.60
Other(2) 14,243 3.6% 11,731 3.4% 1.8 2.8% 2,512 12.97
Total UK 401,526 100.0% 347,557 100.0% 65.0 100.0% 53,969 15.58
(1) Other includes: catering, other usage, residential and technical space,
land and car parking.
(2) Other includes: aerials, car parking, retail units, yards, catering and
residential.
(3) The Group's UK business charge licences customers an all-inclusive rate,
which includes an implicit element of service charge.
Lease expiry profile of future minimum lease payments receivable under
non-cancellable leases
Germany by income
Office Production Storage Smartspace Other(1) Adjustments Total
€m €m €m €m €m in relation to €m
lease incentives
€m
Less than 1 year 44.7 20.5 29.7 4.3 14.8 (0.6) 113.4
Between 1 and 5 years 78.3 40.1 50.0 1.2 26.1 (0.2) 195.5
More than 5 years 12.7 10.4 10.0 - 7.0 - 40.1
Total 135.7 71.0 89.7 5.5 47.9 (0.8) 349.0
Germany by sqm
Office Production Storage Smartspace Other(1) Total
sqm sqm sqm sqm sqm sqm
Less than 1 year 119,975 48,950 118,151 68,474 18,918 374,468
Between 1 and 5 years 278,742 209,940 317,046 9,057 73,157 887,941
More than 5 years 76,342 76,698 61,862 35 15,710 230,647
Total 475,059 335,588 497,059 77,566 107,785 1,493,056
(1) Other includes: catering, other usage, residential and technical
space, land and car parking.
UK by income
Office Workshop Storage Other (2) Adjustments Total
€m €m €m €m in relation to €m
lease incentives
€m
Less than 1 year 11.9 6.2 0.1 0.5 - 18.7
Between 1 and 5 years 21.7 12.4 - 0.8 - 34.9
More than 5 years 11.0 9.0 - 2.9 - 22.9
Total 44.6 27.6 0.1 4.2 - 76.5
UK by sqm
Office Workshop Storage Other(2) Total
sqm sqm sqm sqm sqm
Less than 1 year 71,399 147,308 1,412 8,176 228,295
Between 1 and 5 years 30,962 61,233 - 3,553 95,748
More than 5 years 4,328 19,184 - 2 23,514
Total 106,689 227,725 1,412 11,731 347,557
(2) Other includes: aerials, car parking, retail units, yards, catering
and residential.
The Group's UK business provides flexible leases that represent approximately
72% of annualised rent roll and conventional leases that represent 28% of
annualised rent roll.
Escalation profile per usage
Germany
The Group's German business' primary source of revenue relates to leasing
contracts with tenants. The Group's German business realises escalations as a
result of renewals, inflation linked indexations and contractually agreed
uplifts. Approximately 31.9% of contracts in place at 31 March 2024 are
subject to contractual uplifts. The average contractual uplift over the coming
twelve months split by usage are detailed as follows:
Usage Increase in %
Office 4.39%
Storage 4.52%
Production 4.15%
Smartspace 9.91%
Other(1) 5.25%
Total 4.63%
(1) Other includes: catering, other usage, residential and technical
space, land and car parking.
UK
The Group's UK business' primary source of revenue relates to leasing
contracts and licence fee agreements with tenants. The Group's UK business
realises escalations as a result of renewals, inflation linked indexations and
contractually agreed uplifts. Of the lease contracts in place at 31 March
2024, approximately 42.2% are subject to contractual uplifts. The average
contractual lease contract uplifts over the coming twelve months split by
usage are detailed as follows:
Usage Increase in %
Office 4.70%
Workshop 9.35%
Total 6.97%
Property profile March 2024*
Germany
Property and location Total Office Storage Production Other(1) Rate psqm
sqm sqm sqm sqm sqm €
Aachen I 24,443 12,955 2,246 5,510 3,732 9.54
Aachen II 9,725 1,402 6,669 1,511 143 6.78
Alzenau 66,471 27,702 7,451 24,087 7,231 7.38
Bochum 55,589 12,690 36,027 3,965 2,907 5.13
Bochum II 4,249 3,502 479 12 256 9.33
Bonn 9,004 3,087 2,403 477 3,037 9.00
Bonn - Dransdorf 19,064 5,367 6,891 1,665 5,141 7.81
Buxtehude 28,238 1,120 10,831 13,420 2,867 4.43
Cölln Parc 13,482 6,514 3,386 2,867 715 11.23
Cologne 30,134 2,628 13,021 3,125 11,360 6.38
Dreieich 12,769 7,313 2,929 - 2,527 8.33
Dreieich II 5,512 549 4,537 - 426 5.61
Dresden 57,658 25,431 17,803 11,170 3,254 8.78
Dusseldorf - Sud 21,420 2,814 12,376 1,970 4,260 7.23
Düsseldorf II 9,839 4,433 4,949 - 457 8.60
Düsseldorf III 33,974 21,694 10,614 171 1,495 11.41
Erfurt 23,237 7,585 11,980 - 3,672 3.95
Essen 15,251 5,772 4,806 2,367 2,306 7.10
Essen II 11,614 8,556 1,829 627 602 8.98
Fellbach 26,181 1,752 16,173 340 7,916 6.14
Fellbach II 9,736 4,574 274 - 4,888 10.57
Frankfurt 4,260 2,260 484 68 1,448 11.67
Frankfurt III 10,107 4,903 1,369 - 3,835 13.76
Frankfurt Röntgenstraße 5,496 3,846 555 36 1,059 12.34
Freiburg Teningen 20,796 7,140 6,131 5,578 1,947 5.32
Frickenhausen 27,859 6,516 8,499 10,743 2,101 5.77
Friedrichsdorf 17,572 6,492 5,475 3,199 2,406 8.60
Gartenfeld 25,473 5,375 10,821 3,297 5,980 9.42
Grasbrunn 14,254 7,254 4,743 - 2,257 12.94
Hallbergmoss 18,358 12,276 2,995 - 3,087 11.35
Hamburg Lademannbogen 10,305 8,081 1,049 - 1,175 10.39
Hanover 22,733 8,113 3,966 6,344 4,310 7.17
Heidenheim 46,843 8,415 15,420 13,828 9,180 4.86
Heiligenhaus 44,629 20,089 7,534 12,364 4,642 4.68
Köln Porz 21,089 15,207 2,319 279 3,284 12.60
Köln Rodenkirchen 19,861 9,918 6,689 2,178 1,076 8.03
Krefeld 11,318 7,131 2,520 594 1,073 8.66
Krefeld II 6,101 2,893 325 2,171 712 8.38
Krefeld III 9,666 4,918 3,342 924 482 8.60
Ludwigsburg 28,229 7,392 10,036 3,585 7,216 7.16
Mahlsdorf 29,355 11,613 10,796 1,963 4,983 8.77
Mahlsdorf II 12,737 5,765 1,263 1,906 3,803 8.48
Maintal Mitte 11,016 462 4,523 5,685 346 5.83
Mannheim 68,789 13,378 20,821 27,913 6,677 5.42
Mannheim II 14,235 6,260 3,986 586 3,403 6.74
Mannheim III 3,033 2,276 741 - 16 7.58
Markgröningen 57,728 4,532 30,853 20,337 2,006 3.81
Munich - Neuaubing 90,765 12,606 32,330 32,184 13,645 8.08
Nabern II 5,578 1,620 491 2,376 1,091 9.07
Neckartenzlingen 51,577 15,295 19,465 14,087 2,730 4.92
Neu-Isenburg 8,239 5,752 1,244 - 1,243 13.30
Neuruppin 22,959 1,404 7,629 13,133 793 5.67
Neuss 17,589 13,397 1,284 153 2,755 13.44
Neuss II 33,338 7,959 17,198 6,058 2,123 6.15
Norderstedt 12,627 3,052 7,507 172 1,896 5.48
Nürnberg 14,106 2,323 3,241 7,532 1,010 7.56
Oberhausen 82,896 41,174 29,966 1,739 10,017 6.38
Offenbach Carl Legien-Strasse 45,596 10,249 9,316 17,678 8,353 6.43
Offenbach I 15,028 3,474 2,475 2,351 6,728 7.40
Öhringen 18,761 1,969 7,448 8,772 572 6.05
Pfungstadt 32,614 6,692 12,259 9,786 3,877 6.51
Potsdam 35,862 12,490 12,720 4,956 5,696 9.05
Potsdam II 244 165 71 - 8 13.90
Rastatt 19,043 4,898 7,279 2,199 4,667 5.64
Rostock 18,617 8,230 1,956 6,606 1,825 6.94
Saarbrücken 46,912 28,707 9,846 2,270 6,089 9.27
Schenefeld 40,250 10,283 26,500 1,961 1,506 5.29
Solingen 13,332 2,475 4,409 4,925 1,523 2.88
Stuttgart - Kirchheim 57,863 20,168 12,897 18,737 6,061 6.64
Wiesbaden 18,370 14,371 1,261 - 2,738 17.05
Total 1,751,598 588,698 573,721 354,537 234,642 7.24
UK
Property and location Total Office Workshop Storage Other(2) Rate psqm
sqm sqm sqm sqm sqm €(3)
Albion Mills Business Centre 15,001 5,425 5,371 865 3,340 9.08
Altrincham 4,498 1,442 2,768 - 288 19.53
Ashford 1,824 1,823 - - 1 45.87
Barnsley 6,702 687 5,930 - 85 8.88
Barnsley Carlton 3,367 1,172 2,000 - 195 19.93
Basingstoke 10,314 10,183 - - 131 31.02
Birmingham Tyseley 12,335 854 9,820 1,233 428 9.94
Bradford - Dudley Hill 11,218 1,099 9,962 - 157 8.91
Bristol Equinox 1,304 1,303 - - 1 54.39
Bury 3,911 3,911 - - - 16.27
Camberwell - Lomond 2,039 1,266 546 - 227 38.83
Cardiff 4,106 4,105 - - 1 35.53
Cheadle 1,628 1,600 - - 28 41.15
Christchurch 2,663 2,058 605 - - 32.71
Consett 3,094 - 3,094 - - 4.74
Coventry 1,621 1,621 - - - 18.35
Design Works 4,777 3,437 555 - 785 17.16
Didcot 1,021 491 510 - 20 35.32
Dinnington 3,788 1,000 2,648 - 140 11.87
Doncaster 2,778 2,777 - - 1 31.99
Dorking 2,148 1,406 715 - 27 47.08
Egham 1,002 927 - - 75 39.99
Fareham 1,758 1,758 - - - 47.00
Gateshead 13,160 - 11,927 - 1,233 5.41
Gloucester 20,751 2,989 16,669 - 1,093 6.51
Gloucester - Barnwood 3,402 3,378 24 - - 53.86
Hartlepool - Oakesway 2,585 - 2,585 - - 2.55
Hebburn 5,463 - 5,462 - 1 8.11
Hemel Hempstead 4,387 4,384 - - 3 37.56
Hooton 1,376 1,230 - - 146 28.31
Hove 2,939 2,160 695 - 84 35.87
Huddersfield (Linthwaite) 2,365 - 2,364 - 1 8.58
Islington Studio 3,138 2,936 201 - 1 39.91
Leeds - Brooklands 2,076 2,042 - - 34 25.46
Leeds - Wortley 3,735 - 3,734 - 1 7.65
Letchworth 3,037 2,368 661 - 8 18.48
Littlehampton 1,993 1,992 - - 1 41.32
Liverpool 3,488 1,324 2,164 - - 18.34
London Colney 1,887 1,767 - - 120 36.27
M25 Business Centre 3,282 2,151 1,085 - 46 37.13
Maidstone 1,645 1,644 - - 1 45.54
Manchester - Trafford Park 8,815 - 8,675 - 140 10.65
Manchester - Newton Heath 5,660 2,273 3,353 - 34 18.96
Manchester - Old Trafford 4,579 1,703 2,806 - 70 26.44
Milton Keynes 3,591 3,529 14 - 48 33.15
New Addington - Croydon 6,621 379 6,158 - 84 15.14
Newcastle - Amber Court 4,296 4,296 - - - 24.97
Northampton - K2 4,689 57 4,631 - 1 13.75
Northampton - KG 12,617 910 11,609 - 98 10.42
Nottingham - Arnold 5,523 1,313 4,009 - 201 10.20
Nottingham - Park Row 4,128 4,110 - - 18 42.86
Nottingham - Roden 4,545 9 4,533 - 3 8.37
Oldham - Hollinwood 5,525 5,495 - - 30 25.19
Perivale 2,147 542 1,604 - 1 32.49
Peterlee 18,307 - 18,306 - 1 4.66
Poole 6,707 6,558 - - 149 27.33
Preston 5,319 1,741 3,577 - 1 19.31
Rochdale (Fieldhouse) 23,179 527 22,329 - 323 4.48
Rochdale (Moss Mill) 16,226 - 14,441 - 1,785 4.45
Rotherham 4,482 1,369 3,112 - 1 14.98
Sandy Business Park 9,373 108 9,152 - 113 9.25
Sheffield (Cricket) 1,927 - 1,927 - - 11.19
Shipley 2,238 2,238 - - - 14.05
Solihull 1,715 1,714 - - 1 57.70
Spectrum House 4,279 4,109 169 - 1 35.40
Stanley 3,775 - 3,775 - - 6.44
Sunderland - North Sands 2,819 2,818 - - 1 19.95
Swindon 6,824 339 6,380 - 105 18.52
The Ivories 2,300 - 2,299 - 1 37.93
Theale 2,602 2,544 - - 58 65.96
Wakefield 20,759 619 18,443 - 1,697 5.21
Warrington - Craven Court 3,829 - 3,829 - - 12.55
Wimbledon 3,309 1,459 1,569 - 281 38.63
Wolverhampton - Willenhall 5,215 581 4,340 - 294 10.93
Total 401,526 132,050 253,135 2,098 14,243 15.58
* Excluding commercial leased investment properties.
(1) Other includes: Smartspace, catering, other usage, residential and
technical space, land and car parking.
(2) Other includes: aerials, car parking, retail units, yards, catering and
residential.
(3) The Group's UK business charges licence customers an all-inclusive rate,
which includes an implicit element of service charge.
ANNEX 1 - NON-IFRS MEASURES
Basis of preparation
The Directors of Sirius Real Estate Limited have chosen to disclose additional
non-IFRS measures; these include EPRA earnings, adjusted net asset value, EPRA
net reinstatement value, EPRA net tangible assets, EPRA net disposal value,
EPRA loan to value, adjusted profit before tax and funds from operations
(collectively, "Non-IFRS Financial Information").
The Directors have chosen to disclose:
• EPRA earnings in order to assist in comparisons with similar
businesses in the real estate sector. EPRA earnings is a definition of
earnings as set out by the European Public Real Estate Association. EPRA
earnings represents earnings after adjusting for (where applicable)
gains/losses on revaluation of investment properties, gains/losses on disposal
of properties (net of related tax), recoveries from prior disposals of
subsidiaries (net of related tax), refinancing costs, exit fees and prepayment
penalties, goodwill impairment, acquisition costs in relation to business
combinations, changes in fair value of derivative financial instruments
(collectively, the "EPRA earnings adjustments"), deferred tax in respect of
the EPRA earnings adjustments, NCI relating to revaluation (net of related
tax), NCI relating to gains/losses on disposal properties (net of related
tax), gains/losses on revaluation of investment property relating to
associates and the related tax thereon. The reconciliation between basic and
diluted earnings and EPRA earnings is detailed in table A below.
• Adjusted net asset value in order to assist in comparisons with
similar businesses. Adjusted net asset value represents net asset value after
adjusting for derivative financial instruments at fair value and net deferred
tax asset/liability. The reconciliation for adjusted net asset value is
detailed in table B below.
• EPRA net reinstatement value ("EPRA NRV") in order to assist in
comparisons with similar businesses in the real estate sector. EPRA NRV is a
definition of net asset value as set out by the European Public Real Estate
Association. EPRA NRV represents net asset value after adjusting for
derivative financial instruments at fair value, deferred tax relating to
valuation movements and derivative financial instruments and real estate
transfer tax presented in the Valuation Certificate (for the entire
consolidated Group including wholly owned entities and investment in
associates). The reconciliation for EPRA NRV is detailed in table C below.
• EPRA net tangible assets ("EPRA NTA") in order to assist in
comparisons with similar businesses in the real estate sector. EPRA NTA is a
definition of net asset value as set out by the European Public Real Estate
Association. EPRA NTA represents net asset value after adjusting for (where
applicable) derivative financial instruments at fair value, deferred tax
relating to valuation movements (excluding that relating to assets held for
sale) and derivative financial instruments, goodwill and intangible assets as
per the note reference in the audited consolidated statement of financial
position (for the entire consolidated Group including wholly owned entities
and investment in associates). The reconciliation for EPRA NTA is detailed in
table C below.
• EPRA net disposal value ("EPRA NDV") in order to assist in
comparisons with similar businesses in the real estate sector. EPRA NDV is a
definition of net asset value as set out by the European Public Real Estate
Association. EPRA NDV represents net asset value after adjusting for (where
applicable) goodwill and the fair value of fixed interest rate debt (for the
entire consolidated Group including wholly owned entities and investment in
associates). The reconciliation for EPRA NDV is detailed in table C below.
• EPRA loan to value ("EPRA LTV") in order to assist in comparisons
with similar businesses in the real estate sector. EPRA LTV is a definition of
loan to value ratio as set out by the European Public Real Estate Association.
EPRA LTV represents net debt to total property value as defined in note 23. It
includes all capital which is not equity as debt, irrespective of its IFRS
classification, and is based upon proportional consolidation, therefore
including the Group's share in the net debt and net assets of associates.
Assets are included at fair value, net debt at nominal value. The
reconciliation for EPRA LTV is detailed in table D below.
• Adjusted profit before tax in order to provide an alternative
indication of the Group's underlying business performance. Accordingly, it
adjusts for the effect of the gains/losses on revaluation of investment
properties, gains/losses on revaluation relating to leased investment
properties, gains/losses on disposal of properties, gains/losses on
revaluation of investment property from associates and related tax, other
adjusting items and change in fair value of derivative financial instruments.
The reconciliation for adjusted profit before tax is detailed in table E
below.
• Funds from operations in order to assist in comparisons with similar
businesses and to facilitate the Group's dividend policy which is derived from
is adjusted profit before tax. Accordingly, funds from operations exclude
depreciation and amortisation (excluding depreciation relating to IFRS 16),
net foreign exchange differences, amortisation of financing fees, adjustment
in respect of IFRS 16 and current tax excluding tax on disposals. The
reconciliation for funds from operations is detailed in table E below.
The Non-IFRS Financial Information is presented in accordance with the JSE
Limited Listings Requirements and The Guide on Pro forma Financial
Information, issued by SAICA. The Non-IFRS Financial Information is the
responsibility of the Directors. The Non-IFRS Financial Information has been
presented for illustrative purposes and, due to its nature, may not fairly
present the Group's financial position or result of operations. The Non-IFRS
Financial Information required by the JSE Limited Listings Requirements solely
relates to Headline Earnings Per Share and not EPRA.
Ernst & Young Inc have issued an independent auditor report on the
Non-IFRS Financial Information for the year ended 31 March 2024 which is
available for inspection at the Group's registered office. The starting point
for all the Non-IFRS Financial Information has been extracted, without
adjustment, from the audited Group's consolidated financial statements for the
year ended 31 March 2024 (the "consolidated financial statements").
Table A - EPRA earnings
Year ended Year ended
31 March 2024 31 March 2023
€m €m
Basic and diluted earnings attributable to owners of the Company(1) 107.8 79.6
(Deduct gain)/add loss on revaluation of investment properties(2) (12.2) 9.8
Add loss/(deduct gain) on disposal of properties (net of related tax)(3) 0.1 (4.7)
Change in fair value of derivative financial instruments(4) 1.3 (0.9)
Deferred tax in respect of EPRA earnings adjustments(5) 2.5 4.3
NCI relating to revaluation (net of related tax)(6) 0.0 -
NCI relating to gain on disposal of properties (net of related tax)(7) 0.0 -
Add loss on revaluation of investment property relating to associates(8) 1.6 0.5
Tax in relation to the revaluation gains/losses on investment property (0.0) (0.4)
relating to associates(9)
EPRA earnings(10) 101.1 88.2
Notes:
(1) Presents the profit attributable to owners of the Company which has been
extracted from the consolidated income statement within the consolidated
financial statements.
(2) Presents the gain or loss on revaluation of investment properties which
has been extracted from the consolidated income statement within the
consolidated financial statements.
(3) Presents the gain or loss on disposal of properties (net of related tax)
which has been extracted from note 11 within the consolidated financial
statements.
(4) Presents the change in fair value of derivative financial instruments
which has been extracted from the consolidated income statement within the
consolidated financial statements.
(5) Presents deferred tax relating EPRA earning adjustments which has been
extracted from note 11 within the consolidated financial statements.
(6) Presents the non-controlling interest relating to revaluation (net of
related tax) which has been extracted from note 11 within the consolidated
financial statements.
(7) Presents the non-controlling interest relating to gain or loss on disposal
of properties (net of related tax) which has been extracted from note 11
within the consolidated financial statements.
(8) Presents the gain or loss on revaluation of investment property relating
to associates which has been extracted from note 11 within the consolidated
financial statements.
(9) Presents tax in relation to the revaluation gains/losses on investment
property relating to associates which has been extracted from note 11 within
the consolidated financial statements.
(10)Presents the EPRA earnings for the year.
Table B - Adjusted net asset value
31 March 2024 31 March 2023
€m €m
Net asset value
Net asset value for the purpose of assets per share (total equity attributable 1,407.3 1,197.1
to the owners of the Company)(1)
Deferred tax liabilities(2) 82.7 80.2
Derivative financial instruments at fair value(3) - (1.3)
Adjusted net asset value attributable to owners of the Company(4) 1,490.0 1,276.0
Notes:
(1) Presents the net asset value for the purpose of assets per share (total
equity attributable to the owners of the Company) which has been extracted
from the consolidated statement of financial position within the consolidated
financial statements.
(2) Presents the net deferred tax liabilities or assets which have been
extracted from the note 10 within the consolidated financial statements.
(3) Presents current derivative financial instrument assets which have been
extracted from the consolidated statement of financial position within the
consolidated financial statements.
(4) Presents the adjusted net asset value attributable to the owners of the
Company as at year end.
Table C - EPRA net asset measures
31 March 2024 EPRA NRV EPRA NTA EPRA NDV
€m €m €m
Net asset value as at year end (basic)(1) 1,407.3 1,407.3 1,407.3
Diluted EPRA net asset value at fair value 1,407.3 1,407.3 1,407.3
Group
Derivative financial instruments at fair value(2) - - n/a
Deferred tax in respect of EPRA fair value movements on investment 82.7 82.7 (*) n/a
properties(3)
Intangibles(4) n/a (3.3) n/a
Fair value of fixed interest rate debt(5) n/a n/a 114.7
Real estate transfer tax(6) 170.3 n/a n/a
Investment in associate
Deferred tax in respect of EPRA fair value movements on investment 7.0 7.0(*) n/a
properties(3)
Fair value of fixed interest rate debt(5) n/a n/a 6.7
Real estate transfer tax(6) 9.4 n/a n/a
Total EPRA NRV, NTA and NDV(7) 1,676.7 1,493.7 1,528.7
31 March 2023 EPRA NRV EPRA NTA EPRA NDV
€m €m €m
Net asset value as at year end (basic)(1) 1,197.1 1,197.1 1,197.1
Diluted EPRA net asset value at fair value 1,197.1 1,197.1 1,197.1
Group
Derivative financial instruments at fair value(2) (1.3) (1.3) n/a
Deferred tax in respect of EPRA fair value movements on investment 80.2 80.1* n/a
properties(3)
Intangibles(4) n/a (4.1) n/a
Fair value of fixed interest rate debt(5) n/a n/a 99.2
Real estate transfer tax(6) 164.4 n/a n/a
Investment in associate
Deferred tax in respect of EPRA fair value movements on investment 7.0 7.0* n/a
properties(3)
Fair value of fixed interest rate debt(5) n/a n/a 9.9
Real estate transfer tax(6) 9.3 n/a n/a
Total EPRA NRV, NTA and NDV(7) 1,456.7 1,278.8 1,306.2
* The Group intends to hold and does not intend in the long term to sell
any of the investment properties and has excluded such deferred taxes for the
whole portfolio as at year end.
Notes:
(1) Presents the net asset value for the purpose of assets per share (total
equity attributable to the owners of the Company) which has been extracted
from the consolidated statement of financial position within the consolidated
financial statements.
(2) Presents current derivative financial instrument assets which have been
extracted from the consolidated statement of financial position within the
consolidated financial statements.
(3) Presents for the Group the net deferred tax liabilities or assets which
have been extracted from note 10 within the consolidated financial statements
and for EPRA NTA only the additional credit adjustment for the deferred tax
expense relating to assets held for sale of €nil (2023: €0.1m). For
investment in associates the deferred tax income/(expense) arising on
revaluation losses/gains amounted to €nil (2023: €0.4m).
(4) Presents the net book value of software and licences with definite useful
life which has been extracted from note 16 within the consolidated financial
statements.
(5) Presents the fair value of financial liabilities and assets on the
consolidated statement of financial position, net of any related deferred tax.
(6) Presents the add-back of purchasers' costs in order to reflect the value
prior to any deduction of purchasers' costs, as shown in the Valuation
Certificate of Cushman & Wakefield LLP.
(7) Presents the EPRA NRV, EPRA NTA and EPRA NDV, respectively, as at year
end.
Table D - EPRA LTV metric
Proportionate
consolidation
31 March 2024 Group Investment in Total
€m associates €m
€m
Interest-bearing loans and borrowings(1) 245.1 52.2 297.3
Corporate bonds(2) 700.0 - 700.0
Net payables(3) 75.3 5.9 81.2
Cash and cash equivalents(4) (244.2) (7.4) (251.6)
Net debt (a)(5) 776.2 50.7 826.9
Investment properties(6) 2,210.6 126.2 2,336.8
Plant and equipment(8) 7.8 - 7.8
Intangible assets(9) 3.3 - 3.3
Loan to associates(10) 45.1 - 45.1
Total property value (b)(11) 2,266.8 126.2 2,393.0
EPRA LTV (a/b)(12) 34.2% 40.2% 34.6%
Proportionate
consolidation
31 March 2023 Group Investment in Total
€m associates €m
€m
Interest-bearing loans and borrowings(1) 264.4 52.1 316.5
Corporate bonds(2) 700.0 - 700.0
Net payables(3) 71.0 4.5 75.5
Cash and cash equivalents(4) (124.3) (8.6) (132.9)
Net debt (a)(5) 911.1 48.0 959.1
Investment properties(6) 2,123.0 124.2 2,247.2
Assets held for sale(7) 8.8 - 8.8
Plant and equipment(8) 7.2 - 7.2
Intangible assets(9) 4.1 - 4.1
Loan to associates(10) 44.3 - 44.3
Total property value (b)(11) 2,187.4 124.2 2,311.6
EPRA LTV (a/b)(12) 41.7% 38.6% 41.5%
Notes:
(1) Presents the interest-bearing loans and borrowings which have been
extracted from the consolidated statement of financial position within the
consolidated financial statements less the corporate bonds which have been
extracted from note 23 within the consolidated financial statements.
(2) Presents the corporate bonds which have been extracted from note 23 within
the consolidated financial statements.
(3) Presents the net payables, which is the sum of trade and other
receivables, derivative financial instruments, trade and other payables,
current tax liabilities (all of which have been extracted from the
consolidated statement of financial position within the consolidated financial
statements) and deposits which have been extracted from note 18 within the
consolidated financial statements.
(4) Presents the cash and cash equivalents which have been extracted from the
consolidated statement of financial position within the consolidated financial
statements.
(5) Presents the net debt, which is the sum of interest-bearing loans and
borrowings, corporate bonds, and net payables, less cash and cash equivalents.
(6) Presents the investment properties values which have been extracted from
the consolidated statement of financial position within the consolidated
financial statements.
(7) Presents the assets held for sale which have been extracted from the
consolidated statement of financial position within the consolidated financial
statements.
(8) Presents the plant and equipment which have been extracted from the
consolidated statement of financial position within the consolidated financial
statements.
(9) Presents the intangible assets which have been extracted from the
consolidated statement of financial position within the consolidated financial
statements.
(10)Presents the loan to associates which has been extracted from note 24
within the consolidated financial statements.
(11)Presents the total property value, which is the sum of investment
properties, assets held for sale, plant and equipment, intangible assets and
loan to associates.
(12)Presents the EPRA LTV which is net debt divided by total property value in
percentage.
Table E - Adjusted profit before tax and funds from operations
Year ended Year ended
31 March 2024 31 March 2023
€m €m
Reported profit before tax(1) 115.2 87.0
Adjustments for:
(Gain)/loss on revaluation of investment properties(2) (12.2) 9.8
Loss on revaluation relating to leased investment properties(3) (0.9) (1.5)
Gain on disposals of properties(4) (0.9) (4.7)
Loss on revaluation of investment property from associates and related tax(5) 1.6 0.1
Other adjusting items(6) 5.9 6.2
Change in fair value of financial derivatives(7) 1.3 (0.9)
Adjusted profit before tax(8) 110.0 96.0
Adjustments for:
Foreign exchange effects(9) (3.4) 0.2
Depreciation and amortisation (excluding depreciation relating to IFRS 16)(10) 3.3 3.4
Amortisation of financing fees(11) 3.5 3.3
Adjustment in respect of IFRS 16(12) 0.6 2.2
Current taxes incurred(13) (4.8) (3.0)
Add back current tax relating to disposals(14) 1.0 -
Funds from operations(15) 110.2 102.1
Notes:
(1) Presents profit before tax which has been extracted from the consolidated
income statement within the consolidated financial statements.
(2) Presents the gain or loss on revaluation of investment properties which
has been extracted from the consolidated income statement within the
consolidated financial statements.
(3) Presents the gain or loss on revaluation relating to leased investment
properties which has been extracted from note 13 within the consolidated
financial statements.
(4) Presents the gain or loss on disposal of properties which has been
extracted from the consolidated income statement within the consolidated
financial statements.
(5) Presents the gain or loss on revaluation of investment property relating
to associates and related tax which has been extracted from note 10 within the
consolidated financial statements.
(6) Presents the total adjusting items which have been extracted from note 11
within the consolidated financial statements.
(7) Presents the change in fair value of derivative financial instruments
which has been extracted from the consolidated income statement within the
consolidated financial statements.
(8) Presents the adjusted profit before tax for the year.
(9) Presents the net foreign exchange gains or losses as included in other
administration costs in note 6 within the consolidated financial statements.
(10)Presents depreciation of plant and equipment and amortisation of
intangible assets which have been extracted from note 6 within the
consolidated financial statements.
(11)Presents amortisation of capitalised finance costs which has been
extracted from note 9 within the consolidated financial statements.
(12)Presents the differential between the expense recorded in the consolidated
income statement for the year relating to head leases in accordance with IFRS
16 amounting to €3.9m (2023: €4.5m) and the actual cash expense recorded
in the consolidated statement of cash flows for the year amounting to €3.3m
(2023: €2.3m).
(13)Presents the total current income tax which has been extracted from note
10 within the consolidated financial statements.
(14)Presents the current income tax charge relating to disposals of investment
properties which has been extracted from note 10 within the consolidated
financial statements.
(15)Presents the funds from operations for the year.
GLOSSARY OF TERMS
Adjusted earnings after tax is the earnings attributable to the owners of the Company, adjusted for the
effect of the gains/losses on revaluation of investment properties and related
tax, (also to associates net of related tax), gains/losses on disposal of
properties and related tax, NCI relating to revaluation (net of related tax),
NCI relating to gains/losses on disposal properties (net of related tax),
changes in fair value of derivative financial instruments (net of related tax
and NCI), revaluation gains/losses relating to leased investment properties
(net of related tax) and adjusting items (net of related tax and NCI)
Adjusted net asset value is the total equity attributable to the owners of the Company adjusted for
derivative financial instruments at fair value and net deferred tax
liabilities/assets
Adjusted profit before tax is the reported profit before tax adjusted for the effect of gains/losses on
revaluation of investment properties, gains/losses on revaluation relating to
lease investment properties, gains/losses on disposal of properties,
gains/losses on revaluation of investment property from associates and related
tax, other adjusting items and changes in fair value of derivative financial
instruments
Annualised acquisition net operating income is the income generated by a property less directly attributable costs at the
date of acquisition expressed in annual terms. Please see "annualised rent
roll" definition below for further explanatory information
Annualised acquisition rent roll is the contracted rental income of a property at the date of acquisition
expressed in annual terms. Please see "annualised rent roll" definition below
for further explanatory information
Annualised rent roll is the contracted rental income of a property at a specific reporting date
expressed in annual terms. Unless stated otherwise the reporting date is 31
March 2024. Annualised rent roll should not be interpreted or used as a
forecast or estimate. Annualised rent roll differs from rental income
described in note 5 of the Annual Report and reported within revenue in the
audited consolidated income statement for reasons including:
• annualised rent roll represents contracted rental income at a
specific point in time expressed in annual terms;
• rental income as reported within revenue represents rental income
recognised in the period under review; and
• rental income as reported within revenue includes accounting
adjustments including those relating to lease incentives
Capital value is the market value of a property divided by the total sqm of a property
Company is Sirius Real Estate Limited, a company incorporated in Guernsey and resident
in the United Kingdom for tax purposes, whose shares are publicly traded on
the Main Market of the London Stock Exchange (primary listing) and the Main
Board of the Johannesburg Stock Exchange (primary listing)
Cumulative total return is the return calculated by combining the movement in investment property
value net of capex with the total net operating income less bank interest over
a specified period of time
EPRA European Public Real Estate Association
EPRA earnings is earnings after adjusting for (where applicable) gains/losses on revaluation
of investment properties, gains/losses on disposal of properties (net of
related tax), recoveries from prior disposals of subsidiaries (net of related
tax), refinancing costs, exit fees and prepayment penalties, goodwill
impairment, acquisition costs in relation to business combinations, changes in
fair value of derivative financial instruments (collectively, the "EPRA
earnings adjustments"), deferred tax in respect of the EPRA earnings
adjustments, NCI relating to revaluation (net of related tax), NCI relating to
gains/losses on disposal properties (net of related tax), gains/losses on
revaluation of investment property relating to associates and the related tax
thereon
EPRA loan to value is the ratio of net debt to total property value as defined in note 23. It
includes all capital which is not equity as debt, irrespective of its IFRS
classification, and is based upon proportional consolidation, therefore
including the Group's share in the net debt and net assets of associates.
Assets are included at fair value, net debt at nominal value
EPRA net reinstatement value is the net asset value after adjusting for derivative financial instruments at
fair value, deferred tax relating to valuation movements and derivative
financial instruments and real estate transfer tax presented in the Valuation
Certificate, including the amounts of the above related to the investment in
associates
EPRA net tangible assets is the net asset value after adjusting for (where applicable) derivative
financial instruments at fair value, deferred tax relating to valuation
movements (just for the part of the portfolio that the Group intends to hold
should be excluded) and derivative financial instruments goodwill and
intangible assets as per the note reference in the audited consolidated
statement of financial position, including the amounts of the above related to
the investment in associates.
EPRA net disposal value is the net asset value after adjusting for (where applicable) goodwill and the
fair value of fixed interest rate debt, including the amounts of the above
related to the investment in associates
EPRA net initial yield is the annualised rent roll based on the cash rents passing at reporting date,
less non-recoverable property operating expenses, divided by the market value
of the property, increased with (estimated) purchasers' costs
EPRA net yield is the net operating income generated by a property expressed as a percentage
of its value plus purchase costs
ERV is the estimated rental value which is the annualised rental income at 100%
occupancy
Executive Committee is made up of the CEO, CFO, CMIO, COO, CIO and GHRO as set out on pages 76 and
77 of the Group's Annual Report and Accounts 2024
Funds from operations ("FFO") is adjusted profit before tax adjusted for depreciation and amortisation
(excluding depreciation relating to IFRS 16), amortisation of financing fees,
net foreign exchange differences, adjustment in respect of IFRS 16 and current
tax excluding tax on disposals
Geared IRR is an estimate of the rate of return taking into consideration debt
Gross loan to value ratio is the ratio of principal value of total debt to the aggregated value of
investment property
Group comprises that of the Company and its subsidiaries
Like for like refers to the manner in which metrics are subject to adjustment in order to
make them directly comparable. Like-for-like adjustments are made in relation
to annualised rent roll, rate and occupancy and eliminate the effect of asset
acquisitions and disposals that occur in the reporting period
LTIP Long Term Incentive Plan
LTV loan to value
Net loan to value ratio is the ratio of principal value of total debt less cash, excluding that which
is restricted in contractual terms, to the aggregate value of investment
property
Net operating income is the rental, service charge and other income generated from investment and
managed properties less directly attributable costs
Net yield is the net operating income generated by a property expressed as a percentage
of its value
Occupancy is the percentage of total lettable space occupied as at reporting date
Operating cash flow on investment (geared) is an estimate of the rate of return based on operating cash flows and taking
into consideration debt
Operating cash flow on investment (ungeared) is an estimate of the rate of return based on operating cash flows
Operating profit is the net operating income adjusted for gains/losses on revaluation of
investment properties, gains/losses on disposal of properties, movement in
expected credit loss provision, administrative expenses and share of profit of
associates
Rate for the German portfolio is rental income per sqm expressed on a monthly basis
as at a specific reporting date
for the UK portfolio is rental income (includes estimated service charge
element) per sqm expressed on a monthly basis as at a specific reporting date
in EUR
for the UK portfolio is rental income (includes estimated service charge
element) per sq ft expressed on an annual basis as at a specific reporting
date in GBP
Senior Management Team as set out on page 78 of the Group's Annual Report and Accounts 2024
SIP Share Incentive Plan
Sirius comprises that of the Company and its subsidiaries
Total debt is the aggregate amount of the interest-bearing loans and borrowings
Total shareholder accounting return is the return obtained by a shareholder calculated by combining both movements
in adjusted NAV per share and dividends paid
Total return is the return for a set period of time combining valuation movement and income
generated
Ungeared IRR is an estimate of the rate of return
Weighted average cost of debt is the weighted effective rate of interest of loan facilities expressed as a
percentage
Weighted average debt expiry is the weighted average time to repayment of loan facilities expressed in
years
CORPORATE DIRECTORY
SIRIUS REAL ESTATE LIMITED
(Incorporated in Guernsey)
Company number: 46442
JSE Share Code: SRE
LSE (GBP) Share Code: SRE
LEI: 213800NURUF5W8QSK566
ISIN Code: GG00B1W3VF54
Registered office
Elizabeth House
Les Ruettes Brayes
St Peter Port
Guernsey GY1 1EW
Channel Islands
Registered number
Incorporated in Guernsey under The Companies (Guernsey) Law, 2008, as amended,
under number 46442
Company Secretary
A Gallagher
Sirius Real Estate Limited
Elizabeth House
Les Ruettes Brayes
St Peter Port
Guernsey GY1 1EW
Channel Islands
UK solicitors
Norton Rose Fulbright LLP
3 More London Riverside
London SE1 2AQ
United Kingdom
Financial PR
FTI Consulting LLP
200 Aldersgate Street
London EC1A 4HD
United Kingdom
JSE sponsor
PSG Capital Proprietary Limited
1st Floor, Ou Kollege Building
35 Kerk Street
Stellenbosch 7600
South Africa
Joint broker
Peel Hunt LLP
100 Liverpool Street
London EC2M 2AT
United Kingdom
Joint broker
Berenberg
60 Threadneedle Street
London EC2R 8HP
United Kingdom
Property valuer
Cushman & Wakefield LLP
Rathenauplatz 1
60313 Frankfurt am Main
Germany
Independent auditor
Ernst & Young LLP
PO Box 9, Royal Chambers
St Julian's Avenue
St Peter Port
Guernsey GY1 4AF
Channel Islands
Guernsey solicitors
Carey Olsen (Guernsey) LLP
PO Box 98
Carey House
Les Banques
St Peter Port
Guernsey GY1 4BZ
Channel Islands
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