Sirius Real Estate tops €1bn in assets, boosts profit by 43%
Sirius Real Estate, which operates branded business parks and flexible workspaces throughout Germany, posted a solid 43% rise in first-half profit after boosting rental income and booking revaluations on its assets. The company broke through the €1bn barrier in assets owned for the first time.
Pre-tax profit for the six months through September rose to €78.2m, as rental and other income from investment properties rose 16.6% to €40.8m. At 30 September, the portfolio book value was €1.05bn, up from €931.2m at the end of March. Sirius declared an interim dividend of 1.63c per share, up 4.5% on-year.“In the first half, we achieved a significant milestone, exceeding the €1bn mark for assets owned,” chief executive Andrew Coombs said. “Occupier demand for industrial assets and secondary offices in Germany has never been greater. We believe this market will continue for some time and Sirius is very well positioned to take advantage of it.”
The company, which is listed on the London main board and on the Johannesburg exchange, has been good to its shareholders since resolving old financing issues in the years after the onset of the financial crisis. It has been steadily growing its revenue and profit figures, and paying out a tidy dividend (currently 4.7%), while wrapping up a big capex investment programme started just over three years ago.
Earlier this month Sirius sold its Bremen Hag business park for €3.8m and notarised the sale of another Bremen park, in Dötlingerstrasse, for €6.3m. The Bremen Hag asset, next to the container port in Bremen harbor, was loss-making, losing about €300,000 a year and with less than 20% occupancy.
CEO Coombs said, "When the Bremen Dötlinger Strasse sale completes in March 2019, it will conclude the company's strategy to exit Bremen, allowing us to focus our sights on Germany's "big seven" cities. The proceeds of both these sales will also provide additional capital to invest in the current portfolio and on new acquisitions."
Coombs said the company had hoped to own €1bn in assets by the end of 2019, but achieved this sooner than expected. He said his management team viewed about 800 properties in 2018 and succeeded in acquiring high-quality assets at prices that would not dilute Sirius’s earnings.
“We saw a 43% year-on-year increase in profit before tax underpinned by a €69.3m valuation uplift, new lettings of more than 83,000m² and €6.6m of annualised rent roll signed in the period and are able to report a 2.6% like-for-like rental growth despite the impact from three expected large tenant move-outs,” he said.