Wrap Text
Trading Statement
SIRIUS REAL ESTATE LIMITED
(Incorporated in Guernsey)
Company Number: 46442
Share Code: SRE
ISIN Code: ISIN GG00B1W3VF54
28 October 2016
Sirius Real Estate Limited
("Sirius Real Estate" or the "Company")
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 the 30th September 2016.
Sirius has made a good start in the first half, helped by strong occupational demand from the German
SME market, together with contributions from new acquisitions and the capital expenditure programme.
This, combined with a successful fundraising in June and a further reduction in the average cost of debt
supports a positive outlook for the business. The Company is therefore pleased to confirm that it expects
the results for the six months to 30th September 2016 to be in line with expectations and is on track to
achieve a good result for the full year.
The main highlights for the period include:
- The majority of Sirius’ tenants come from the German SME market which is a substantial part of the
German economy. Sirius’ well established proposition offers SME companies flexible leases so that
they can adapt the space they have to their fast-changing needs. The success of this format is shown
by occupancy increasing on a like-for-like basis to its highest level yet of 81%* as at 30 September
2016 and like-for-like rate per sqm increasing to €5.07* from €5.02** at the start of the financial year.
- Like-for-like annualised rent roll as at 30 September 2016 increased by 2.4% in the six-month period
to €64.5 million from €63.0 million** at the start of the financial year. A significant part of the rent
roll increase came from the Company’s major capital investment programme through which sub-
optimal space is transformed into either prime lettable space or one of the Company’s premium
Smartspace product range.
- In June 2016, the Company completed a successful equity fundraising which was enlarged from €20
to €30 million in response to investor demand. The rationale for the fundraising was to support the
acquisition of multi-let office and warehouse business parks with EPRA net initial yields in excess of
8%. The Company’s ability to access 7 year debt at rates at or around 1.6% makes such acquisitions
highly accretive to shareholder returns.
- In September 2016, Sirius completed the acquisition of the Dresden business park for €28.6 million
(including acquisition costs) representing an 8.3% EPRA net initial yield. Currently, the site has a total
annual rental income of €2.78 million from a broad base of 60 tenants with a weighted average lease
length remaining of 3.3 years. The business park comprises 18 buildings with 53,200 sqm of gross
lettable area on 190,000 sqm of land. The further opportunity with this park lies in the 35% vacancy
which is ideal for re-development into prime space, alongside applying the Company’s service charge
recovery expertise to grow net rental income.
- The Company also expects to complete the acquisition of a multi-let office building in Wiesbaden for
€17.7 million (including acquisition costs) on Monday 31 October 2016, representing a 9.1% EPRA net
initial yield. Currently, the site has 19,602 sqm of gross lettable area, of which 65% is occupied by 3
tenants paying a total annual rental income of €1.88 million, with an average unexpired lease term of
2.7 years. Similarly, the significant vacant space on this site represents an investment opportunity to
create new prime space and increase rental income.
- Following on from recent financing successes, the Company continues to reduce the average cost of
its borrowings and expects to shortly complete a new 7 year €70 million banking facility with
BerlinHyp. This will further reduce the weighted average cost of debt and the increased facility will be
used to part fund the Dresden and Wiesbaden properties as well as preserve €10 million of equity,
available to support the purchase of further assets from the pipeline of potential acquisitions that
have been identified.
* Including the Dresden acquisition, total occupancy as at 30th September 2016 was 80% and average rate per sqm was €5.10
** Starting annualised rent roll and rate per sqm includes the position of the existing portfolio at 31 March 2016 plus the starting
position of the Markgroeningen and Krefeld acquisitions which completed in May 2016.
The Board looks forward to providing a more detailed report on the Company’s trading performance and
outlook when it announces its half-year results for the six months to 30 September 2016 on 28 November
2016.
Andrew Coombs, Chief Executive Officer, said, “This has been a good start to the current financial year,
during which we have continued to see revenue increases, further acquisitions, reductions in the cost of
debt and improvements in the Company’s profitability. Our role now is to continue this momentum and
take advantage of the opportunities available to the business. We have a clear strategy to do so, one
element of which is to pursue our aim of moving to a main market listing on both the LSE and JSE which
will help support our objectives.”
Enquiries:
Sirius Real Estate +49 (0)30 285010110
Andrew Coombs, CEO
Alistair Marks, CFO
Peel Hunt +44 (0)20 7418 8900
Capel Irwin
Edward Fox
Canaccord Genuity Limited +44 (0)20 7523 8000
Bruce Garrow
Chris Connors
JSE Sponsor: PSG Capital +27 (0)21 887 9602
David Tosi
Willie Honeyball
Novella +44 (0)20 3151 7008
Tim Robertson
Toby Andrews
Background to Sirius Real Estate:
Established in February 2007, Sirius Real Estate, is the leading operator of branded business parks
providing conventional space and flexible workspace in Germany. The Company owns and operates a
portfolio of 42 business parks which together include over 400 buildings offering over 1.3 million sqm of
gross lettable space comprising mainly offices, production areas and storage facilities. Sirius operates out
of its head office in Berlin and employs circa 201 people in Germany. In December 2014, Sirius was the
first company to gain a secondary listing on Johannesburg Stock Exchange under the fast track process, in
addition, to a primary listing on the AIM market of the London Stock Exchange.
For more information, please visit: www.sirius-real-estate.com
Images of the Sirius property portfolio are available from: https://www.flickr.com/photos/sirius_re/
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