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SIRIUS REAL ESTATE LIMITED - Trading Statement

Release Date: 06/10/2015 08:00
Code(s): SRE     PDF:  
Wrap Text
Trading Statement

SIRIUS REAL ESTATE LIMITED
(Incorporated in Guernsey)
Company Number: 46442
Share Code: SRE
ISIN Code: ISIN GG00B1W3VF54
("Sirius" or "the Company" or "the Group")

                                                                                    06 October 2015

                                        Trading Statement

Sirius Real Estate, the leading operator of branded business parks providing conventional space
and flexible workspace in Germany, is pleased to announce the following trading statement for
the six months to 30 September 2015.

This has been another active and successful period, during which trading is anticipated to be in
line with market expectations. The main highlights of the period include:

-   Successful equity private placement of €50m in June 2015 to fund the acquisition of five
    German business parks for €57.24 million and the early refinancing of two debt facilities.

    o   Four of the five business park acquisitions were completed in September 2015 and the
        fifth site in Aachen is expected to complete at the end of October 2015. In aggregate the
        five business parks will contribute €5.33 million of annual rental income (€4.7m million
        net operating income), with a net initial yield of 8.1%. The bank facility to be put in place
        against four of the five assets is progressing well and is expected to be finalised in the
        middle of October 2015. The new banking terms that have been negotiated will allow the
        new portfolio to have an initial cash on cash yield of 14.6%, with further room for
        improvement from vacancy reduction.

    o   In September 2015 the Company completed a new 7-year €59m debt facility with SEB
        AG to refinance the two existing and expensive Macquarie debt facilities. The interest on
        the SEB AG debt facility has been fixed at an all-in interest rate of 1.84% for the full term,
        which is lower than previously anticipated. This debt facility will reduce the annualised
        interest cost of the Company by approximately €2.6m.

-   Following the completion of Aachen, the owned portfolio will extend to 37 business parks
    within which there are over 360 individual buildings comprising more than 1.2 million sqm of
    lettable space. In addition to this the Company also manages two other properties owned by
    third parties.

As a result of this progress and continued success of the capital investment programme in
refurbishing previously unlettable space, the Company’s FFO will significantly increase in the
second half of the financial year ending 31 March 2016. The Board looks forward to providing a
more detailed report on the Company’s performance and outlook when it announces its half year
results for the six months to 30 September 2015 at the end of November.

Andrew Coombs, CEO of Sirius Real Estate, commented:
“We are achieving our ambitions to increase the size and profitability of the business through
both organic and acquisition led activities, thereby improving shareholder returns. In the last 12
months we have completed two equity Placings and raised €90 million which we have deployed
by acquiring 9 new business parks adding over 200,000 sqm to the Sirius portfolio. The new sites
have all been immediately earnings accretive and have significant potential for further
contribution to net asset growth and FFO.

The financial strength and trading track record of the Group is enabling the Company to
negotiate significantly improved lending terms compared to those that were achievable two years
ago, thereby driving down the cost of debt and reducing financing risk. The Company continues
to review the opportunities that this is presenting.

Organically the Company has progressed the €10 million initiative to transform 100,000 sqm of
unlettable or under-utilised space. A key focus in this programme has been the expansion of our
market leading Smartspace product where we achieve premium rents on previously unlettable or
significantly under-rented space. We expect that this will over time prove to be very significant in
terms of increasing operating cash flows and dividends to shareholders and the value of our
portfolio. We look forward to announcing further progress in November.”

Enquiries:
Sirius Real Estate
Andrew Coombs, CEO                                                     +49 (0)30 285010110
Alistair Marks, CFO

Peel Hunt – Nomad and Joint Broker
Capel Irwin                                                            +44 (0)20 7418 8900
Hugh Preston

PSG Capital
David Tosi                                                             +27 (0)21 887 9602
Willie Honeyball

Canaccord Genuity Limited - Joint Broker
Bruce Garrow                                                           +44 (0)20 7523 8000
Chris Connors
Mark Whitmore

Novella
Tim Robertson                                                          +44 (0)20 3151 7008
Ben Heath

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