REG - Sirius Real Estate - Trading Update

Sirius Real EstateAnnouncement

09/10/2023 07:15

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RNS Number : 0475P  Sirius Real Estate Limited  09 October 2023

SIRIUS REAL ESTATE LIMITED

(Incorporated in Guernsey)

Company Number: 46442

JSE Share Code: SRE

LSE (GBP) Share Code: SRE

LEI: 213800NURUF5W8QSK566

ISIN Code: GG00B1W3VF54

 

9 October 2023

Sirius Real Estate Limited

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

 

Trading Update for the six months ended 30 September 2023

 

7.7%* increase in like for like rent roll and trading in line with
expectations

 

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, provides an update on trading for the six months ended 30
September 2023.

 

Against a backdrop of negative headlines referencing challenging economic
conditions in both Germany and the UK, the Group is pleased to report
continued strong trading in line with expectations, with like-for-like rent
roll growth compared to the prior year of 7.7%*.

 

In Germany, occupancy remains stable and we continue to achieve rental rate
growth ahead of inflation as we utilise our proprietary asset management
platform to maximise the value of our space. The sale of Kassel at above book
value, which we announced on 3 October 2023, together with strong trading
across the German portfolio, underpins our expectation that valuations for the
period end will again outrun any negative yield expansion.

 

In the UK we continue to focus on driving value from BizSpace. Rent roll
growth is ahead of our German operations reflecting the ongoing demand for our
affordable, well located space and the higher inflationary backdrop in the UK.
 Occupancy in the UK was higher than six months prior and it is particularly
pleasing to report UK rent roll has exceeded £50 million for the first time,
buoyed by a record new business sales month in September.

 

The Group's balance sheet remains robust with cash reserves of €112 million
of which €88 million is unrestricted.  During the period the Group
re-financed its Deutsche Pfandbriefbank (PBB) loan facility, seven months in
advance of it falling due on 31 December 2023. The new facility, amounting to
€58.3 million, has a term of seven years at a fixed interest rate of 4.25%.
 The Group further paid down its expiring Schuldschein debt of €20 million
in the period. From the commencement of the new PBB facility at the end of
December 2023, the Group will have a weighted average cost of debt of 2.1% and
a weighted average debt expiry of 4.2 years.

 

The Group remains active on acquisitions and disposals, with two UK
acquisitions in the period running at a 9.6% net initial yield ("NIY") (total
acquisition costs) and a disposal in Germany at a 6.0% NIY. Our disposals
strategy remains opportunistic and focused on non-core or mature assets with
little upside, where we have continued to achieve returns in excess of book
value. We remain disciplined in our approach to acquisitions and continue to
see a healthy pipeline of potential opportunities across Germany and the UK.

 

During the period we were pleased to welcome Chris Bowman to the Group as
CFO.  Following a handover period Chris has assumed all CFO responsibilities
from Alistair Marks, who had been acting as interim CFO.

 

Alistair Marks, who stepped down from the Sirius board in July 2023, will be
leaving the Group at the end of March 2024 having been with Sirius since
inception in 2007, becoming CFO in 2012, following internalisation and more
recently as CIO. Alistair's contribution to the Group has been absolutely
invaluable, helping to ensure the Group emerged from the global financial
crisis and then prospered in the years following, growing from a small AIM
company into the FTSE250 company it is today. Succession plans are well
advanced through internal promotion to ensure Alistair's CIO responsibilities
are seamlessly taken forward. The management team wishes Alistair and his
family well in their new life abroad.

 

Commenting on trading during the period, Andrew Coombs, Chief Executive
Officer of Sirius Real Estate, said:

"I firstly want to thank Alistair Marks for his contribution to the success of
Sirius. Alistair and I have worked together for the last 13 years and I would
like to recognise Alistair's contribution to so much of what we have achieved
as a management team over the last decade. I'm also pleased to say the success
of Sirius has allowed us to attract the talent required to continue the
Group's growth and I look ahead with confidence. Our performance in the first
half, trading in line with expectations against the backdrop of challenging
conditions in both our markets, demonstrates the strength of the Sirius
platform and our people."

 

Full Year Results

 

Sirius will announce results for the six months ended 30 September 2023 on
Monday, 20 November 2023, at which time there will be an in-person
presentation and virtual webinar for analysts and investors.

 

The financial information on which this trading update is based has not been
reviewed or reported on by the Company´s external auditors or a reporting
accountant.

 

*Group rent roll has been translated utilising a constant foreign currency
exchange rate of GBP:EUR 1.1566, being the closing exchange rate as at 30
September 2023.

 

For further information:

Sirius Real Estate

Andrew Coombs, CEO / Chris Bowman, CFO

+44 (0) 20 3727 1000

 

FTI Consulting (Financial PR)

Richard Sunderland / James McEwan / Talia Shirion / Sebastian Duran De Huerta

+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 UK. As of 31
March 2023, the Group's portfolio comprised 140 assets let to 9,201 tenants
with a total book value of over €2 billion, generating a total annualised
rent roll of €178.3 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.

JSE Sponsor

PSG Capital

 

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