Sirius Real Estate, owner and manager of branded business parks throughout Germany, issued a recent trading statement to end of March to update investors as to how it was faring with COVID-19. The company, listed in both London and Johannesburg, has a portfolio with a book value of €1.06bn as of last September. Its share price, initially hammered when the lockdown was announced, has recovered about half its losses since.
The company’s CEO Andrew Coombs said it was well placed to maintain operational continuity through the COVID-19 crisis. It said it was managing the impact on its cash flow, while expecting that some rent payments due over the next few months would be deferred. Quantifying the total impact of the crisis on its business through the next financial year is not yet possible, he said. On the personal front, the company has had no staff infected with COVID-19, and currently about 75% of the staff are working from home.
More than 75% of rent and service charge income for April had been collected, with ‘a small number’ of tenants requesting deferral. The figure by 9th April represented about 90% of the normal working pattern, said the company.
Letting enquiries HAVE fallen since the outbreak, with a negative impact on viewings and new lettings, but against that the group had signed 13,000 sqm of new lettings since March 1st, which will generate €1.2m of annual rent.
Sirius has lease agreements with more than 5,000 tenants, although the biggest 50 make up 44% of the rent roll, including lots of blue chip names. About 7% of its tenants are government agencies, with a large portion of the rent roll coming from Germany’s SME sector, the Mittelstand, which operate across a wide range of industries and include many of the sort of companies that the German government’s funding package is designe to support.
Additionally, about 35% of the portfolio is storage space, which is experiencing a surge in demand as households put goods in storage so that they can house family members through the COVID-19 lockdown, or to enable companies who’ve been unable to export goods to store them longer.
Coombs said its results for the full-year to March 31 were in line with expectations. The total rent roll will increase marginally from €87.8m to €90.3m, with a like-for-like rent roll increasing by 61% to €81.2m from €76.5m after the sale of a €168m seed portfolio to its Titanium joint venture with AXA Investment Managers - Real Assets last year. Sirius continues to own 35 percent of Titanium, as well as providing asset management services to the joint venture, which now owns over €225m of assets.
Occupancy increased to 87% from 85% and average rent increased to more than €6.07 per sqm from €5.83 per sqm. Total debt increased from €386.1m at the start of the period to €485.8m as at 31 March 2020, with unrestricted cash and undrawn facilities of €129.7m. Net LTV was estimated at below 35%.
Coombs said the company would decide in May if the dividend can be paid, and how much. It has been paying an increasing dividend since its listing in 2014.
