Sirius Real Estate Limited (LSE:SRE, JSE:SRE, OTC:SRRLF), owner and operator of branded business and industrial parks in Germany and the UK, booked a 7.7% increase in like-for-like rent roll in the first six months of its financial year.
German occupancy rates remain stable despite challenging economic conditions in the country, with rental rates growing ahead of inflation, according to today’s trading update.
Valuations for the period are expected to outrun any negative yield expansion, bolstered by the sale of the Kassel business park for €7.3 million.
The company said the sale of Kassel at above book value, announced on 3 October, together with strong trading across the German portfolio, underpins its expectation that valuations for the period end will again outrun any negative yield expansion.
In the UK, Sirius remains focused on driving value from flexible workspace subsidiary BizSpace.
UK rent roll has exceeded £50 million for the first time in the period, buoyed by a record new business sales month in September.
The group's balance sheet remains robust with cash reserves of €112 million (£97 million) of which €88 million is unrestricted.
During the period, the group re-financed its Deutsche Pfandbriefbank (PBB) loan facility, seven months in advance of it falling due on 31 December.
The new facility, amounting to €58.3 million, has a term of seven years at a fixed interest rate of 4.25%.
The group remains active on acquisitions and disposals, with two UK acquisitions in the period running at a 9.6% net initial yield (NIY) and a disposal in Germany at a 6% NIY.
Today’s trading update also touched on the handover of chief financial officer responsibilities from interim CFO Alistair Marks to Chris Bowman.
Marks will be leaving the group at the end of March 2024 having been with Sirius since inception in 2007.
"I firstly want to thank Alistair Marks for his contribution to the success of Sirius,” said chief executive Andrew Coombs. “Alistair and I have worked together for the last 13 years and I would like to recognise Alistair's contribution to so much of what we have achieved as a management team over the last decade.
“I'm also pleased to say the success of Sirius has allowed us to attract the talent required to continue the group's growth and I look ahead with confidence. Our performance in the first half, trading in line with expectations against the backdrop of challenging conditions in both our markets, demonstrates the strength of the Sirius platform and our people."