Sirius Real Estate Limited (LSE:SRE, JSE:SRE, OTC:SRRLF) achieved a 7.7% increase in its overall rent roll on a like-for-like basis for the financial year ending March 31, 2023, with cash collection remaining at 98.5%.
In a trading update, the company noted that in its Germany portfolio, rental rates grew “largely in line with our rent roll”, reflecting the stable occupancy rates in the country. Rent roll growth in the UK was in line with the group level and rental rates have increased in excess of inflation.
“We have been comfortable ceding a small amount of occupancy in return for these higher rates and we believe this positions the business well to take advantage of any recovery in the macroeconomic climate,” the company noted.
Sirius also said it “successfully firmed rates” in its recently acquired UK business BizSpace “to position our assets for better returns in the long term”.
On the balance sheet, cash reserves are at €123mln (£109mln) with around 90% of the group's debt maturing in excess of three years.
During the year Sirius successfully refinanced its Berlin Hyp AG €170mln loan facility at a 4.26% interest rate for a seven-year term, which from commencement in November 2023 will take the overall weighted average group cost of debt to 1.9%.
Sirius noted the likelihood of higher interest expenses arising from future refinancings, though it is confident that the leverage levels will continue to have a positive overall effect on shareholder returns, given the relatively high-yielding nature of the group's assets and the continued growth in the rent roll.
“Our disposals strategy remains opportunistic and fixed on non-core or mature assets with little upside, where we can achieve returns in excess of book value, as evidenced through the 25% combined premium-to-book value achieved on the six disposals completed during the last 12 months,” the company noted.
In the statement, Sirius chief executive Andrew Coombs commented: "Against a challenging market backdrop during the year, Sirius has delivered another period of strong operational performance.
“The Group expects to deliver results for the financial year ended 31 March 2023 in line with market expectations, and I look forward to the announcement of our fully audited results on Monday, June 5."