(Alliance News) - German real estate firm Sirius Real Estate Ltd said Wednesday that the Covid-19 outbreak is expected to have a mixed effect on trading, but will have no impact on trading profit for its financial year ending March 31.
Sirius said that in response to the outbreak, all meeting room and conference facility hires have been put on hold until the end of April, which is expected to have a marginal impact on revenue and cashflow.
In addition, the company noted a 50% reduction in the run rate of core enquiries for new tenants, which is expected to translate into a 10% reduction in new lettings in March and for April and May, a reduction in lettings between 35% and 40%.
This could lead to a 1% drop in underlying occupancy.
More positively, Sirius has observed a rise in demand for storage space from new and existing commercial tenants. The storage sector makes up 35% of the company's portfolio.
Financially, Sirius said it has a strong balance sheet, with EUR110 million in total cash balances, as well as EUR39.3 million in undrawn facilities.
"We are maintaining a very close eye on the situation as it develops with the interests of our staff and tenants very much at the forefront of deliberations. Our platform across Germany is well placed to maintain the operation of the company throughout this difficult time and we will continue to adapt and meet the evolving needs of our tenants throughout the crisis period," said Chief Executive Officer Andrew Coombs.
Shares in Sirius Real Estate were up 3.2% at ZAR11.15 on Wednesday in Johannesburg.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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Sirius Real Estate (SRE)