Sirius Real Estate
Sirius Business Park Neckartenzlingen
Sirius Real Estate’s latest results confirm its credentials as one of the few consistently performing listed property companies operating in both Germany and the UK. But the firm’s steady delivery of rental growth, strategic acquisitions and dividend progression is now being supplemented by a new theme: its deliberate positioning to capitalise on Europe’s rapidly expanding defence and infrastructure spending.
For the financial year ended 31 March 2025, Sirius posted a 75% jump in profit before tax to €201.6m, buoyed by an €81m valuation uplift and strong organic rent roll growth. Funds from operations rose by 11.8% to €123.2m, and the company declared its 23rd consecutive dividend increase, up 1.7% to 6.15 cents per share. Net asset value rose to 112 cents per share, with the portfolio’s fair value climbing 12.6% to €2.49bn. The net loan-to-value ratio declined to 31.4%, aided by the successful placement of a €350m senior unsecured bond in January. Sirius' shares are traded on both the London and Johannesburg stock exchanges.
Importantly, the group delivered another year of solid operational performance. Total rent roll rose by 12.8%, with like-for-like growth of 6.3% across Germany and the UK. Sirius’s integrated platform continues to deliver rent uplifts while maintaining occupancy, with 2024 marking its eleventh consecutive year of >5% like-for-like rental growth. New acquisitions, including the Reinsberg industrial park in Saxony (€20.4m, 10-year sale-leaseback, 7.35% yield) and a business park in Lübeck (€12.67m, 7.9% EPRA NIY, 95% occupancy by August), support both day-one income and future upside.
These deals were funded in part by the sale of a mature asset in Pfüngstadt (south of Frankfurt) for €30m, a 9% premium to book value. This kind of disciplined asset rotation is typical of Sirius's capital recycling strategy: identify under-managed parks with upside, enhance them through capex and in-house leasing, then crystallise gains through sale. The company invested €250m across 11 deals during FY25 and sees a strong pipeline for further acquisitions in FY26.
Strategic shift: defence spending opens a new front
Yet it is Sirius’s foray into defence-related real estate that may prove transformative. With Germany’s new chancellor Friedrich Merz having scrapped the debt brake, up to €900bn will now flow into defence and infrastructure over the next three years. Sirius estimates that 20% of its portfolio is suitable for defence-related purposes, including former military logistics facilities, air force training grounds and RAF bases. The recent appointment of Major General (Retd.) Angus Fay as strategic adviser reflects a serious move to align the portfolio with anticipated military demand.
CEO Andrew Coombs estimates that for every €10 spent on defence, €1 will be required in supporting real estate—a figure that implies up to €40bn of new investment in logistics and industrial property across Germany. With much of Sirius’s light industrial stock trading at yields well above replacement cost, and often below current market rental levels, the company is positioning itself to benefit from what it sees as a structural repricing of the asset class.
While macroeconomic risks remain, Sirius enters the new financial year with over €570m in cash, a strong balance sheet, and an acquisition pipeline already underway, including assets in Southampton and Mönchengladbach. Shareholders continue to benefit from a 5.4% dividend yield, and although recent equity raises have been dilutive, the funds are not only being deployed at double-digit initial yields but may also help refinance the €400m bond due in mid-2026.
Trading at a discount of nearly 15% to NAV, Sirius is not priced as if it were on the cusp of a re-rating. Yet its combination of recurring income, asset management-driven growth, and optionality in an increasingly defence-oriented economy sets it apart from much of the listed property sector. Whether this proves to be opportunism or foresight, the groundwork is already being laid.