Last checked at 11 Apr 2017 07:00
11 April 2017
Sirius Real Estate Limited
("Sirius Real Estate", "Sirius" 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 twelve months to 31 March 2017.
This has been another successful year for the business culminating in the move up to the Main Market of the London Stock Exchange and to the Main Board of the Johannesburg Stock Exchange, both on 6 March 2017. Sirius grew substantially during this period with acquisitions of €103 million agreed or completed and annualised rental income increasing to reach over €70 million as at 31 March 2017 (2016: €60.5 million). Sirius also successfully began its recycling programme on a significant scale with €103 million of disposals agreed or completed at values materially above book value. As a consequence, the Company has further enhanced its strong long-term position in the German business park and real estate market and is pleased to confirm that it expects results for the twelve month period to be in line with expectations.
The main highlights for the period include:
· Another successful lettings period with in excess of 150,000 sqm of new deals signed and with occupancy increasing to 81% at the year end (2016: 80%). Germany has proven to be a resilient investment and occupier market during a year of political change in Europe and it continues to be an attractive economy in which to operate. Sirius' proposition of offering a mix of conventional space and flexible workspace across a network of 44 branded business parks throughout Germany is enjoying the benefits of operating in this market.
· Rental income has significantly increased over the period with the second half of the year being particularly strong. Much of this has come from the successful capital investment programme aimed at transforming 207,000 sqm of sub-optimal areas into prime lettable space or into one of the Company's Smartspace products. More than 160,000 sqm of this space has been fully renovated and is currently either let or being marketed.
· €103 million of acquisitions have either completed in the year or are notarised and in line for completion early in the current financial year. Earlier this month, the Company completed the previously announced acquisition of a multi-let office building in Frankfurt for €4.5 million and it is expected that the purchase of the asset in Cologne for a total consideration of €22.9 million will be completed in May 2017.
· €103 million of disposals have either completed in the year or are notarised to complete early in the new financial year. The €85 million sale and leaseback of Rupert Mayer Str. business park in Munich is expected to complete at the end of April 2017 and the €11 million disposal of the business park in Dusseldorf at the end of June 2017. The proceeds from these disposals along with the recent €15 million equity placing will be used to acquire the Cologne asset mentioned above as well as provide funds for the acquisition of a further €105 million of additional assets. The Company is reviewing a number of opportunities to acquire multi-let office and warehouse business parks, four of which are under exclusive negotiations, and will report further progress on this in due course.
On 25th April 2017, Sirius will hold a Capital Markets Day in London for analysts and institutional investors at which the Company will provide a more detailed insight into Germany's commercial real estate market, the German SME sector and the Company's operating platform.
The Board also looks forward to providing a more detailed report on the Company's trading performance and outlook when it announces its full year results for the twelve months to 31 March 2017, currently scheduled for late in June 2017.
Andrew Coombs Chief Executive Officer of Sirius Real Estate, said, "This has been an excellent period for the Company with further substantial growth being achieved in the year. With the move to the main markets in London and Johannesburg best exemplifying the success we have experienced over the last few years and our ambitions for the future.
Our focus now is on further strengthening Sirius' position in the German business park and real estate sector, as we enter our eleventh year in operation in this market. We aim consistently to add shareholder value through our asset management techniques to deliver above average returns from our investment programmes. We therefore have a solid strategy in place for enhancing value from our existing assets and we believe this has been further strengthened with the option to recycle capital from mature and non-core assets as shown by the recent sales. We believe that we are well placed to continue this performance into the future whilst also carefully monitoring and managing risk."
Enquiries:
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 risk adjusted 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, Sirius may consider their disposal in order to recycle equity into assets which present greater opportunity for the Group's asset management skills.
For more information, please visit: www.sirius-real-estate.com