Wrap Text
Trading Statement
SIRIUS REAL ESTATE LIMITED
(Incorporated in Guernsey)
Company Number: 46442
Share Code: SRE
ISIN Code: ISIN GG00B1W3VF54
The Company considers this announcement to contain inside information which is disclosed in
accordance with the Market Abuse Regulation
9 October 2017
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 2017.
This has been a successful trading period for the business alongside continued investment in
improvements of the asset base and the raising of equity capital to support the acquisition of new
business parks. Lettings activity has been good, driven by strong occupational demand from the
German SME market for both conventional and flexible workspace. The Company is trading in line
with management expectations.
The main highlights for the period include:
• Like for like annualised rental income increased by 2% to €65.2 million compared to €64.0 million
at the start of the period. A significant contributor to the annualised rental income increase has
been from the Company's major capex investment programme through which sub-optimal space
is transformed into either prime lettable space or one of the Company's premium Smartspace
products.
• Like for like average rate per sqm notably increased from €5.11 to €5.17, demonstrating the
Company’s ability to secure rate increases through active asset management. Unlike other
property companies Sirius does not depend on external brokers for attracting new tenants with
instead the vast majority coming from leads generated in-house.
• In July 2017, the Company completed a successful equity fundraising of €25 million which,
combined with proceeds from disposals made as part of its strategy of asset recycling, has
provided the Company with significant resources to invest in new opportunities. The Company
has already made excellent progress on the deployment of this capital and is pleased to announce
today the notarisation of four additional acquisitions as follows:
o On 14 September 2017, Sirius notarised the acquisition of an office building asset located
in Hamburg-Hummelsbüttel for €8.4 million (including acquisition costs). The site has
11,222 sqm of lettable space and is currently 100% vacant. Hamburg is a market Sirius has
been looking to enter for some time and this site, in close proximity to the airport,
represents an attractive entry point with substantial upside potential.
o On 23 September 2017, Sirius completed the acquisition of an office building asset located
in Röntgenstraße, Frankfurt for €6.1 million (including acquisition costs), representing a
7.3% EPRA net initial yield. The site contains 5,035 sqm of lettable space, is currently 87%
occupied and generating €0.5 million of annualised rental income. The stable income
characteristics of this core location asset make it an attractive substitution for the disposal
of the Kiel asset that was completed in August.
o On 29 September 2017, Sirius notarised the acquisition of a business park asset located in
Schenefeld (near Hamburg) for €15.1 million (including acquisition costs), representing a
7.8% EPRA net initial yield. This site contains 42,220 sqm of lettable space, is currently
71% occupied and generating €1.5 million of annualised rental income. Aside from
growing occupancy and income the Company intends to benefit from operational
synergies with the site located in Hamburg-Hummelsbüttel.
o On 29 September 2017, Sirius notarised the acquisition of a business park asset located in
Krefeld (near Dusseldorf) for €9.2 million (including acquisition costs) representing a 6.7%
EPRA net initial yield. This is a market the Company knows well as this site, which has
10,398 sqm of lettable space, is the third site in Krefeld which the Company has acquired.
With occupancy of 72% and annualised rental income of €0.7 million, the Company is
confident of delivering improvement by utilising its existing local market insight and
experience.
• In addition, the Company is pleased to announce today that on 21 August 2017 the Company
notarised the sale of non-income producing land on the outskirts of the Tempelhof business park
in Berlin. The land is being for sold for €950,000 representing a significant premium to book value.
The Board looks forward to providing a more detailed report on the Company’s trading performance
when it announces its half year results in late November 2017.
Andrew Coombs Chief Executive Officer of Sirius Real Estate, said:
“We continue to grow the business in terms of the number of properties we own and manage.
Following the completion of the notarised acquisitions announced today we will own and manage a
portfolio of 51 properties (48 as at 30 Sept 2017) compared to 43 at the end of H1 2016 with more
expected to follow in the second half of this financial year. All our acquisitions are selected to enable
us to use our operating platform to transform underutilised space and thereby drive occupancy and
rental rates.
Economically Germany is in a favourable position relative to other comparable economies. In the third
quarter of this year, output in Germany expanded at its fastest pace since April 2011 supported by
export gains and strong growth in manufacturing. This tallies with the strong occupational demand
for the Company’s mix of conventional and flexible workspace we are experiencing and we believe
bodes well for the Company’s strategy of acquiring assets with increased vacancy and higher value
add opportunity.”
For further information:
Sirius Real Estate +49 (0)30 285010110
Andrew Coombs, CEO
Alistair Marks, CFO
Novella +44 (0)20 3151 7008
Tim Robertson
Toby Andrews
About Sirius Real Estate
Sirius is a property company listed on the main market and premium segment of the London Stock
Exchange and the main board of the Johannesburg Stock Exchange. It is a leading operator of branded
business parks providing conventional space and flexible workspace in Germany. The Company's core
strategy is the acquisition of business parks at attractive yields, the integration of these business parks
into its network of sites under the Company's own name as well as offering a range of branded
products within those sites, and the reconfiguration and upgrade of existing and vacant space to
appeal to the local market, through intensive asset management and investment. The Company's
strategy aims to deliver attractive returns for shareholders by increasing rental income and improving
cost recoveries and capital values, as well as by enhancing those returns through financing its assets
on favourable terms. Once sites are mature and net income and values have been optimised, the
Company may take the opportunity to refinance the sites to release capital for investment in new sites
or consider the disposal of sites in order to recycle equity into assets which present greater
opportunity for the asset management skills of the Company's team.
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/
LEI: 213800NURUF5W8QSK566
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