(Alliance News) - Sirius Real Estate Ltd on Tuesday said its total annualised rent roll for its most recent financial year was slightly higher despite the sale of a seed portfolio.
The firm, which operates branded business parks in Germany, said its total annualised rent troll for its year ended March 31 rose 2.8% to EUR90.3 million from EUR87.8 million. This came "in spite of sale of a seed portfolio to the Titanium joint venture".
The joint venture was completed with AXA Investment Managers in July 2019, with Sirius selling 65% of its interest in five business parks to Titanium at an implied EUR168.0 million property value. This generated more than EUR70.0 million of net proceeds for Sirius.
Sirius owns 35% of Titanium and provides asset management services to the joint venture. In March of this year, Sirius completed its first external acquisition for Titanium, buying the Itterpark business park near Dusseldorf for EUR58.9 million.
On a like-for-like basis, Sirius's own annualised rent roll rose 6.1% to EUR81.2 million from EUR76.5 million. In total, 162,607 square metres of net lettings were signed in the financial year, at an average rate of EUR6.55 per square metres. Like-for-like occupancy rose to 87% from 85% and average rent increased to over EUR6.07 per square metre from EUR5.83.
During the year, Sirius agreed EUR171.9 million of new debt facilities, including its first unsecured debt facility of EUR50.0 million, with EUR30.0 million of this drawn down at the end of March. Total debt increased to EUR485.8 million million as at March 31 from EUR386.1 million at the start of its financial year.
The firm shrank its weighted average cost of debt to 1.52% at March-end and its total annual interest charge, despite the increase in total debt.
In terms of Covid-19, Sirius said it is assessing the impact of the pandemic on its businesses "on a daily basis", and its team is still operating with 75% of the workforce working from home.
Enquiry levels have dropped as a result of the pandemic, hurting viewings and new lettings, but more than 13,000 square metres of net lettings have completed since March 1, generating annualised rent of EUR1.2 million.
Sirius said that "the collection of rent and service charge income for the month of April 2020 has remained relatively robust", the firm having collected more than 75% of billing by Thursday last week, around 90% of the normal pattern.
"There are a small number of tenants who are facing Covid-19 related financial difficulties who have requested deferral of rental and service charge payments. These cases will be addressed on a case-by-case basis," Sirius said.
Sirius noted that: "While it is expected that some rent payments for the next few months will be deferred, the company is using its extensive platform across Germany to manage the impact to cash flow and will work with tenants to minimise any long-term impact to profits."
Nonetheless, given the continuing German lockdown with no final end date, Sirius said it is unable to provide any guidance on its future financial performance.
Chief Executive Andrew Coombs said: "We are maintaining a close eye on the situation as it evolves daily with the welfare and interests of our staff and tenants very much in the forefronts of our minds.
"Sirius operates a particularly well diversified portfolio of properties together with a strong operating platform across Germany, and we are well placed to maintain operational continuity through the duration of the crisis".
Shares in Sirius were down 1.0% at ZAR15.42 in Johannesburg on Tuesday morning and down 1.3% at 68.09 pence in London.
By Anna Farley; annafarley@alliancenews.com
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Sirius Real Estate (SRE)