Sirius Real Estate, which operates branded business and industrial parks in Germany and the UK, lifted like-for-like rentals 5.5% for the half year ended September 30, 2024, with the rental-roll up by 14.9% year-on-year.
The rent-roll growth was partly driven by asset acquisitions. The like-for-like increase reflected an ability to drive organic growth across both Germany and the UK, CEO Andrew Coombs said in a trading statement yesterday,
“The group remains on track to deliver full year results in line with expectations,” he said. The half year results are expected to be released on September 18.
In Germany, which marginally outperformed the UK, rent-roll growth benefited from stronger rates, despite expected regular move-outs at the beginning of the period, which slowed growth in occupancy.
“We expect to see occupancy strengthen in line with seasonal trends in the second half. With inflation back to pre-Covid levels, we again demonstrated the strength of our in-house asset management platform by leveraging product mix and occupancy carefully alongside rates, to optimise yield and the best overall returns from our space,” said Coombs.
Management of the company, which has a JSE secondary listing, said they expected to see property values increase in Germany this year, as the transactional market was more active and confidence in the real estate sector was expected to improve further.
In the UK, like-for-like rates grew strongly, ahead of overall rent-roll growth, but similar to what had been seen in Germany, some seasonal move outs impacted occupancy.
Valuations in the UK were expected to stabilise, in contrast to recent periods, and an improving transactional market would build further confidence.
“Overall, we expect to announce a positive valuation movement at group level at the period end,” said Coombs.
An equity fund raise of €180 million (R3.4 billion) in July 2024 would provide funds to execute on a pipeline of acquisition opportunities, following the successful deployment of the proceeds of the November 2023 fundraise.
“We are in exclusivity on several promising asset acquisitions in both Germany and the UK and we expect to notarise and/or complete on a number of those in the coming months,” said Coombs.
The balance sheet held free cash reserves of about €297m as at September 30, 2024, and there were no significant debt maturities until June 2026.
"During the first half we continued to perform well, with our asset management team again driving like-for-like rent-roll growth well ahead of inflation. This organic growth alongside the rental contribution from the well timed series of acquisitions we have made in recent months, combined to drive an almost 15% increase in overall rent-roll, underlining the continued demand for space within our portfolio,” said Coombs.
BUSINESS REPORT