Sirius Real Estate a rarity in the property sector – a resilient growth story with dependable income potential
Last updated: 07:32 29 Feb 2024 GMT, First published: 10:32 08 Nov 2023 GMT
Snapshot
- Sirius Real Estate acquires third German site this year
- Sirius Real Estate on track for another confident year of rent roll growth - analyst
- Sirius Real Estate dividend tracks FFO higher
About the company
Sirius Real Estate Limited is a leading owner and operator of branded business parks, industrial complexes and out of town offices in Germany and the UK.
The company's purpose is to create and manage optimal workspaces that empower small and medium-sized businesses to grow, evolve and thrive.
Sirius seeks to unlock the potential of its people, its properties and the communities in which it operates, so that together they can create sustainable impact and long-term financial and social value.
How it is doing
Sirius Real Estate Limited (LSE:SRE, JSE:SRE, OTC:SRRLF) has notarised the €13.75 million (£11.73 million) acquisition of a German business park in Klipphausen, near Dresden, together with an adjacent land parcel.
Both are being funded from the proceeds of last November's €165 million capital raise.
The deal represents the third asset to be acquired by Sirius in Germany this calendar year, and the sixth asset to be acquired across both Germany and the UK in recent months.
Sirius acquired the site from a corporate owner-occupier that plans to vacate the building, which is expected to be six months after deal completion.
Sirius Real Estate Limited (LSE:SRE, JSE:SRE, OTC:SRRLF) has expanded its portfolio in Germany by acquiring two business parks in Köln and Göppingen for a total of €40 million (£34 million).
Funded by the proceeds from a €165 million capital raise conducted in November, the purchases add nearly 55,000 square metres of space, primarily for light industrial and production use, to Sirius's portfolio.
Sirius Real Estate Limited (LSE:SRE, JSE:SRE, OTC:SRRLF) reported a robust performance for the six months ending 30 September 2023, penning a 7.3% increase in total revenue to €140.1 million (£122.6 million), up from €130.6 million in the same period last year.
This growth was attributed to a 7.7% rise in like-for-like rent roll across the group, with a notable 7% increase in Germany and a 9.0% increase in the UK.
What the brokers say
One of the key figures to catch Peel Hunt’s eye in Sirius Real Estate Limited (LSE:SRE, JSE:SRE, OTC:SRRLF)’s interims was the sturdy growth of the REIT’s rent roll.
On a like-for-like basis, Sirius’ rent roll increased by 7.7% year on year in the six months ending 30 September 2023.
This puts the REIT on track to deliver its 10th consecutive year of 5% or more like-for-like rent roll growth, reflecting a stable EPRA occupancy rate at 84.5%, with the average rental rate up 7.2% in Germany and 9% in the UK year on year.
What management says
Sirius Real Estate Limited (LSE:SRE, JSE:SRE, OTC:SRRLF) CEO Andrew Coombs speaks to Proactive following the release of half-year results that showed continued progress toward the group's goal of having a run rate of $100mln funds from operations (FFO).
The rise in FFO means a higher dividend for the group's shareholders. Coombs also reveals a major competitive advantage that the property group has managed to secure until at least December 2023.
Proactive Research
The above revelations accentuate Sirius’s capability to navigate the economic tumult, backed by a strong asset management platform, stable occupancy, and strategic financial manoeuvres. The company continues to draw value and growth through its strategic dispositions and acquisitions, boding well for its value proposition and financial health.