(Alliance News) - Sirius Real Estate Ltd said Thursday it will pay a dividend for the second half of its financial year following its strong trading performance, and will maintain its dividend policy of paying at least 65% of funds from operations.
For April, the German business park operator has collected 99% of rent and services charges, while for May to date there has been no significant reduction in rent and service charge prepayments.
Following the lockdown in Germany in late March, the company reported a 50% reduction in the run rate of core enquiries from new tenants, leading to a 10% reduction in new lettings in March and a 35% to 40% drop in lettings throughout April and into May.
However, the situation improved significantly with enquires in March and April averaging 1,200 per months, up from the same period a year before. A similar number of enquiries was maintained in the first two weeks of May.
As a result of the rise in enquiries, Sirius has reported 115 new letting in April covering 8,025 square metres, above company expectations and generating annualised rental value of EUR1.6 million for March and April.
In terms of staffing, 85% of Sirius's on-site business park employees have returned to work from the beginning of this week, and those working at the company's head office will increase to 50% from 25%, with the rest continuing to work remotely.
"Our business model is built on the breadth of our offer to occupiers and the adaptability of our mix of accommodation, ranging across many different workspace segments, including conventional office, flexible office, manufacturing, commercial storage and self-storage. In addition, the portfolio is well diversified in terms of both geography and tenant base," said Chief Executive Officer Andrew Coombs.
"We faced this crisis with the benefit of a strong balance sheet, significant covenant headroom and a capital structure well placed to absorb a prolonged period of uncertainty. While it is impossible to predict the course this crisis will eventually take, it is encouraging to see how the business has handled it to date, as well as the country as a whole," Coombs added.
Shares in Sirius Real Estate were up 2.6% at 66.88 pence on Thursday in London, while its Johannesburg shares were also 2.5% higher at ZAR15.09.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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Sirius Real Estate (SRE)