REG - Sirius Real Estate - Trading Update

Sirius Real EstateAnnouncement

07/04/2025 07:00

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RNS Number : 8419D  Sirius Real Estate Limited  07 April 2025

SIRIUS REAL ESTATE LIMITED

(Incorporated in Guernsey)

Company Number: 46442

JSE Share Code: SRE

LSE (GBP) Share Code: SRE

LEI: 213800NURUF5W8QSK566

ISIN Code: GG00B1W3VF54

 

7 April 2025

Sirius Real Estate Limited

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

 

Trading Update for the financial year ended 31 March 2025

 

6.3% increase in Group like-for-like rent roll

 

Sirius Real Estate, the leading owner and operator of branded business and
industrial parks providing conventional space and flexible workspace in
Germany and the U.K., provides an update on trading for its financial year
ended 31 March 2025.

 

The Group has achieved a 12.8%* year-on-year increase in rent roll, driven by
a combination of strong organic growth and the ongoing successful asset
acquisition programme, coupled with continued strong demand for space at our
business parks.  On a like-for-like basis, rent roll has accelerated since
the first half, leading to a total annual increase of 6.3%* compared to the
year ended 31 March 2024, marking the eleventh consecutive year of rent roll
growth in excess of 5%.  Similar levels of growth have been achieved across
both Germany and the U.K.  The Group accordingly expects to deliver full year
results in line with market expectations.

 

The Group also expects to announce a positive valuation movement at Group
level at the period end.  In Germany, rent roll has continued to benefit from
stronger rates, despite anticipated routine move-outs at the beginning of the
year which held back occupancy in the first half.  It is pleasing to report
that the second half saw particularly strong growth in occupancy as the
Company's strategy began to bear fruit.  The Company's in-house asset
management platform was again pivotal in balancing increases in rates whilst
maintaining a healthy occupancy mix which permits further growth from our
portfolio.  We expect to see the growth in income translate into a meaningful
increase in our portfolio valuation in Germany against a backdrop of stable
yields as the transactional market continues to improve.

 

In the U.K., similar to Germany, like-for-like rates continued to grow
strongly and a particularly strong finish to the year has seen occupancy
increases, driving like-for-like rent roll growth well ahead of that reported
in the first half.  Total rent roll growth in the U.K. has been underpinned
by material acquisitions in the period and we expect to see valuations in the
U.K. stabilise, in contrast to recent periods. We believe the improving
transactional market will build further confidence.

 

The Group continues to acquire attractive assets offering both day one income
and value creation potential in the U.K. and Germany and looks forward to
completing on the recently announced acquisitions in Chalcroft (Southampton)
and Mönchengladbach early in the first quarter of the new financial year.
 In the past year we have notarised and/or completed on 11 acquisitions, with
an aggregate investment of more than €250 million.  The acquisition
pipeline remains strong, and the combination of cash and balance sheet
headroom will allow the Group to execute on these opportunities to continue to
drive earnings growth in the year ahead.

 

The Company maintains a strong balance sheet as demonstrated through its
€350 million, seven year corporate bond raise in January 2025, at a coupon
rate of 4.0%.  In addition, the Company raised debt in Germany at an
attractive interest cost of 3.26% with the refinancing of its Saarbrücken
asset in February 2025, for a five year term, and hopes to take advantage of
similar financing opportunities going forward. The Group remains mindful of
the transition to a higher interest rate expense but is confident that
leverage will continue to have a positive overall effect on shareholder
returns, especially as valuations continue to stabilise and improve.  This is
particularly the case given the relatively high yielding nature of the Group's
existing assets, the yields at which the Company has been able to acquire new
assets and the continued growth in the rent roll, which will help to offset
future increases in financing costs.

 

Commenting on trading during the period, Andrew Coombs, Chief Executive
Officer of Sirius Real Estate, said:  "Over the course of 2024 our focus on
growth, asset management and demonstrating the value Sirius' platform can
bring to our occupiers allowed us to deliver a strong performance, with
momentum building strongly as we finished the year.  This has translated into
our eleventh year of above 5% like-for-like rental growth, as well as
improving occupancy and an expected overall valuation increase.  We have also
been very active in prudently deploying capital, investing around €250
million into eleven acquisitions, which will be both accretive to our rent
roll and also offer the opportunity for future value creation, in line with
our strategy.  We have a strong balance sheet and have demonstrated our
ability to raise debt at attractive levels, which will allow us to execute our
healthy pipeline of further investment opportunities.  While there is
undoubtedly some heightened macro uncertainty at the moment, we feel that our
assets will continue to prove their resilience and attractiveness to
occupiers. We believe the Group is well placed to benefit from the positive
impact of the recently announced German defence and infrastructure spending
plans, which are widely expected to provide a clear catalyst for economic
growth in Germany with a read across to the U.K."

 

Full Year Results

 

Sirius will announce results for the financial year ended 31 March 2025 on
Monday, 2 June 2025, at which time there will be an in-person presentation and
a 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 1.1971, being the closing exchange rate as at 31
March 2025.

 

 

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

+44 (0) 20 3727 1000

SiriusRealEstate@fticonsulting.com

 

NOTES TO EDITORS

About Sirius Real Estate

Sirius is a property company listed on the equity shares (commercial
companies) category of the London Stock Exchange and the premium segment of
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 2024, the
Group's owned portfolio comprised 145 assets let to 10,025 tenants with a
total book value of €2.4 billion, generating a total annualised rent roll of
€214 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 X (Twitter) at @SiriusRE

 

JSE Sponsor

PSG Capital

 

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