TIDMSRE
RNS Number : 0000T
Sirius Real Estate Limited
09 October 2017
The Company considers this announcement to contain inside
information which is disclosed in accordance with the Market Abuse
Regulation
9 October 2017
Sirius Real Estate Limited
("Sirius Real Estate" or the "Company")
Trading Statement
Sirius Real Estate, the leading operator of branded business
parks providing conventional space and flexible workspace in
Germany, is pleased to announce the following trading statement for
the six months to the 30(th) September 2017.
This has been a successful trading period for the business
alongside continued investment in improvements of the asset base
and the raising of equity capital to support the acquisition of new
business parks. Lettings activity has been good, driven by strong
occupational demand from the German SME market for both
conventional and flexible workspace. The Company is trading in line
with management expectations.
The main highlights for the period include:
-- Like for like annualised rental income increased by 2% to
EUR65.2 million compared to EUR64.0 million at the start of the
period. A significant contributor to the annualised rental income
increase has been from the Company's major capex investment
programme through which sub-optimal space is transformed into
either prime lettable space or one of the Company's premium
Smartspace products.
-- Like for like average rate per sqm notably increased from
EUR5.11 to EUR5.17, demonstrating the Company's ability to secure
rate increases through active asset management. Unlike other
property companies Sirius does not depend on external brokers for
attracting new tenants with instead the vast majority coming from
leads generated in-house.
-- In July 2017, the Company completed a successful equity
fundraising of EUR25 million which, combined with proceeds from
disposals made as part of its strategy of asset recycling, has
provided the Company with significant resources to invest in new
opportunities. The Company has already made excellent progress on
the deployment of this capital and is pleased to announce today the
notarisation of four additional acquisitions as follows:
o On 14 September 2017, Sirius notarised the acquisition of an
office building asset located in Hamburg-Hummelsbüttel for EUR8.4
million (including acquisition costs). The site has 11,222 sqm of
lettable space and is currently 100% vacant. Hamburg is a market
Sirius has been looking to enter for some time and this site, in
close proximity to the airport, represents an attractive entry
point with substantial upside potential.
o On 23 September 2017, Sirius completed the acquisition of an
office building asset located in Röntgenstraße, Frankfurt for
EUR6.1 million (including acquisition costs), representing a 7.3%
EPRA net initial yield. The site contains 5,035 sqm of lettable
space, is currently 87% occupied and generating EUR0.5 million of
annualised rental income. The stable income characteristics of this
core location asset make it an attractive substitution for the
disposal of the Kiel asset that was completed in August.
o On 29 September 2017, Sirius notarised the acquisition of a
business park asset located in Schenefeld (near Hamburg) for
EUR15.1 million (including acquisition costs), representing a 7.8%
EPRA net initial yield. This site contains 42,220 sqm of lettable
space, is currently 71% occupied and generating EUR1.5 million of
annualised rental income. Aside from growing occupancy and income
the Company intends to benefit from operational synergies with the
site located in Hamburg-Hummelsbüttel.
o On 29 September 2017, Sirius notarised the acquisition of a
business park asset located in Krefeld (near Dusseldorf) for EUR9.2
million (including acquisition costs) representing a 6.7% EPRA net
initial yield. This is a market the Company knows well as this
site, which has 10,398 sqm of lettable space, is the third site in
Krefeld which the Company has acquired. With occupancy of 72% and
annualised rental income of EUR0.7 million, the Company is
confident of delivering improvement by utilising its existing local
market insight and experience.
-- In addition, the Company is pleased to announce today that on
21 August 2017 the Company notarised the sale of non-income
producing land on the outskirts of the Tempelhof business park in
Berlin. The land is being for sold for EUR950,000 representing a
significant premium to book value.
The Board looks forward to providing a more detailed report on
the Company's trading performance when it announces its half year
results in late November 2017.
Andrew Coombs Chief Executive Officer of Sirius Real Estate,
said:
"We continue to grow the business in terms of the number of
properties we own and manage. Following the completion of the
notarised acquisitions announced today we will own and manage a
portfolio of 51 properties (48 as at 30 Sept 2017) compared to 43
at the end of H1 2016 with more expected to follow in the second
half of this financial year. All our acquisitions are selected to
enable us to use our operating platform to transform underutilised
space and thereby drive occupancy and rental rates.
Economically Germany is in a favourable position relative to
other comparable economies. In the third quarter of this year,
output in Germany expanded at its fastest pace since April 2011
supported by export gains and strong growth in manufacturing. This
tallies with the strong occupational demand for the Company's mix
of conventional and flexible workspace we are experiencing and we
believe bodes well for the Company's strategy of acquiring assets
with increased vacancy and higher value add opportunity."
For further information:
Sirius Real Estate
Andrew Coombs, CEO
Alistair Marks, CFO +49 (0)30 285010110
Novella
Tim Robertson
Toby Andrews +44 (0)20 3151 7008
About Sirius Real Estate
Sirius is a property company listed on the main market and
premium segment of the London Stock Exchange and the main board of
the Johannesburg Stock Exchange. It is a leading operator of
branded business parks providing conventional space and flexible
workspace in Germany. The Company's core strategy is the
acquisition of business parks at attractive yields, the integration
of these business parks into its network of sites under the
Company's own name as well as offering a range of branded products
within those sites, and the reconfiguration and upgrade of existing
and vacant space to appeal to the local market, through intensive
asset management and investment. The Company's strategy aims to
deliver attractive returns for shareholders by increasing rental
income and improving cost recoveries and capital values, as well as
by enhancing those returns through financing its assets on
favourable terms. Once sites are mature and net income and values
have been optimised, the Company may take the opportunity to
refinance the sites to release capital for investment in new sites
or consider the disposal of sites in order to recycle equity into
assets which present greater opportunity for the asset management
skills of the Company's team.
For more information, please visit:
www.sirius-real-estate.com
Images of the Sirius property portfolio are available from:
https://www.flickr.com/photos/sirius_re/
LEI: 213800NURUF5W8QSK566
This information is provided by RNS
The company news service from the London Stock Exchange
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