TIDMSRE
RNS Number : 5583O
Sirius Real Estate Limited
13 June 2022
SIRIUS REAL ESTATE LIMITED
(Incorporated in Guernsey)
Company Number: 46442
JSE Share Code: SRE
LSE (GBP) Share Code: SRE
LEI: 213800NURUF5W8QSK566
ISIN Code: GG00B1W3VF54
Sirius Real Estate Limited
("Sirius Real Estate", "Sirius" or the "Company")
Results for the year ended 31 March 2022
CONTINUED STRONG RETURNS IN TRANSFORMATIVE YEAR
13 June 2022. Sirius Real Estate (LSE/JSE: SRE), the leading
operator of branded business and industrial parks providing
conventional space and flexible workspace in Germany and the UK,
announces condensed consolidated financial results for the year to
31 March 2022.
Operating platform continuing to drive rental growth, FFO and
dividend
-- Group annualised rent roll increased 73.1% to EUR167.0
million (2021: EUR96.5 million(1) ) as a result of demand and asset
management led organic growth, acquisitions and the impact of
BizSpace following completion in November 2021
-- Like-for-like annualised rent roll in Germany increased by
6.4% reflecting the eighth consecutive year of like-for-like
annualised rent roll growth in excess of 5.0%
-- Like-for-like annualised rent roll in the UK increased by
7.6% in the Company's 4.5 month period of ownership of BizSpace
-- Profit before tax of EUR168.9 million, representing a 3.2%
year-on-year increase (2021: EUR163.7 million)
-- Funds From Operations ("FFO") increased by 22.5% to EUR74.6 million (2021: EUR60.9 million)
-- H2 dividend of 2.37c, an increase of 19.7% on the 1.98c
dividend relating to the same period in the prior year. Total
dividend relating to the financial year ended 31 March 2022 of
4.41c, an increase of 16.1% (2021: 3.80c) with the same pay-out
ratio of 65% of FFO
-- Total shareholder accounting return of 20.0% (2021: 19.5%)
Continued acquisitive growth, asset recycling and entry into new
market
-- EUR201.9 million of acquisitions in Germany completed or
notarised across 10 sites, providing an attractive mix of income
and value-add opportunity
-- Entry into UK market via acquisition of BizSpace for cash
consideration of approximately GBP245.0 million based on an
enterprise value of GBP380.0 million and representing a net initial
yield of 7.1%.
-- Two strategic disposals providing c.EUR30 million of capital
to recycle into the business completed or expected to complete
after the period end:
o EUR13.75 million sale of the Company's Magdeburg asset in
Germany representing a 5.5% increase on the last reported book
value
o GBP16.0 million sale of BizSpace business park in Camberwell,
London, representing a 94% premium to the valuation at the time of
Sirius' acquisition of BizSpace
Strengthened balance sheet and income driven valuation gains
-- EUR737.8 million or 54.2% increase in investment property
book value(2) to EUR2,100.0 million (2021: EUR1,362.2 million) as a
result of acquisitive growth in Germany, the acquisition of
BizSpace and strong valuation gains
-- Like-for-like increase in valuations in Germany of 9.4% or
EUR127.2 million driven predominantly by annualised rent roll
growth of EUR6.2 million but also 20 bps of gross yield
compression
-- Gross yield of German portfolio of 6.9% (2021: 7.2%) with
two-thirds of the portfolio representing value add assets at a
gross yield of 7.3% and one-third representing mature assets at a
gross yield of 6.1%
-- Like-for-like increase in valuations relating to the 4.5
month period of ownership of BizSpace in the UK of 10.6% or GBP36.7
million driven predominantly by annualised rent roll growth of 7.6%
during the 4.5 month period but also 30 bps of gross yield
compression
-- NAV per share increased by 15.5% to 102.04c (2021: 88.31c)
with adjusted NAV increasing by 15.7% to 108.51c (2021: 93.79c) and
EPRA NTA per share increasing by 16.2% to 107.28c (2021:
92.29c)
-- Transformative corporate bond issuances totalling EUR700.0
million providing financial capacity for acquisitions and repayment
of secured debt as well as providing significant flexibility for
asset recycling and enhanced cash flows for investment
-- Reduction in the weighted average cost of debt to 1.4%,
extension of the weighted average term of debt to 4.3 years and an
increase in the number of unencumbered assets to 127 with a book
value of EUR1.6 billion
-- Total cash balance of EUR151.0 million at year end (2021:
EUR65.7 million), of which EUR127.2 million is unrestricted
-- Net LTV of 41.6% (2021: 31.4%)
Outlook
-- Post year end trading in line with market expectations,
driven by continued strong occupier demand, transformative
investment and ongoing on-shoring of production and supply chains
by German and UK manufacturers
-- Positive impact of FY22 acquisitions expected to be more
pronounced in the new financial year
-- Actively assessing further opportunities for growth in both Germany and the UK
-- Whilst the business is mindful of global macro-economic
conditions causing uncertainty, Sirius remains well placed to
continue to deliver attractive returns for shareholders
Commenting on the results Andrew Coombs, Chief Executive Officer
of Sirius Real Estate, said: "Against an ongoing period of
challenging market conditions, Sirius has delivered another very
positive set of annual results leading to a 20% total accounting
return including a 16.1% increase in dividend for shareholders.
This strong operating performance was underpinned by continued
demand and asset management led rental growth across both our
German and UK platforms. The Company grew acquisitively through the
commitment of over EUR200 million into acquisitions in Germany, as
well as the acquisition of BizSpace in November 2021 for GBP380
million. Further, in issuing two corporate bonds amounting to
EUR700.0 million the Company not only benefited from increased
financial capacity but also reduced its weighted average cost of
debt to 1.4%, increased its weighted average term of debt to 4.3
years and increased the value of its unencumbered properties to
EUR1.6 billion.
"We remain focused on driving property returns through the
capability of our internal operating platforms and, despite the
inflationary environment and the uncertainty created by the
situation in Ukraine, are confident that we can continue to deliver
attractive risk-adjusted returns through active asset management.
Looking ahead, we expect the ten assets acquired or notarised in
Germany during the period to have a greater impact on earnings in
FY23 compared to FY22, whilst the encouraging operating performance
of BizSpace provides further income growth opportunities."
Notes:
1 - Excludes EUR0.7m of annualised rent roll and 7,000 sqm
relating to the Daimler moveout in the Fellbach 2 asset that was
anticipated at the time of acquisition in March 2021.
2 - Including leased investment properties
CONFERENCE CALL
Webcast Conference
There will be an audio webcast presentation for analysts at
08.30am BST / 09.30am SAST today, hosted by Andrew Coombs, Chief
Executive Officer of Sirius Real Estate and Diarmuid Kelly, Chief
Financial Officer.
If you would like to join the webcast please use the
registration link below:
https://webcasting.brrmedia.co.uk/broadcast/6278ccab8eb4f178d1efa68a
For further information:
Sirius Real Estate
Andrew Coombs, CEO
Diarmuid Kelly, CFO
Alistair Marks, CIO
+49 (0) 30 285010110
FTI Consulting (Financial PR)
Richard Sunderland / James McEwan / Talia Jessener
+44 (0) 20 3727 1000
SiriusRealEstate@fticonsulting.com
NOTES TO EDITORS
About Sirius Real Estate
Sirius is a property company listed on the main and premium
market of the London Stock Exchange and the main board of the JSE
Limited. It is a leading owner and operator of branded business and
industrial parks providing conventional space and flexible
workspace in Germany and the UK. As of 31 March 2022, and following
the acquisition of BizSpace, a leading UK provider of regional
flexible workspace, the Group's portfolio comprised 140 assets let
to 9,452 tenants with a total book value of over EUR2 billion,
generating a total annualised rent roll of EUR167.1 million. Sirius
also holds a 35% stake in Titanium, its EUR350+ million
German-focused joint venture with clients of AXA IM Alts.
The Company's strategy centres on acquiring business parks at
attractive yields and integrating them into its network of sites -
both under the Sirius name and alongside a range of branded
products. The business then seeks to reconfigure and upgrade
existing and vacant space to appeal to the local market via
intensive asset management and investment and may then choose to
selectively refinance or dispose of assets once they meet maturity,
to release capital for new investment. This active approach allows
the Company to generate attractive returns for shareholders through
growing rental income, improving cost recoveries and capital
values, and enhancing returns through securing efficient financing
terms. The Company has a strong track record for growing its income
and has delivered like-for-like rent roll growth in excess of 5%
for the last eight consecutive years.
For more information, please visit:
www.sirius-real-estate.com
Follow us on LinkedIn at
https://www.linkedin.com/company/siriusrealestate/
Follow us on Twitter at @SiriusRE
LEI: 213800NURUF5W8QSK566
JSE Sponsor: PSG Capital
Chairman's statement
Building on successful foundations
"The team are deploying their experience and asset management
expertise across both markets and in doing so are delivering
results both organically and through acquisitions."
Overview
This is my fourth Annual Report as Chairman and I am pleased to
record another period of operational and strategic success for the
business despite the continued disruption and challenges that have
arisen from the Covid 19 pandemic, and more latterly, the
inflationary environment which has been exacerbated by the conflict
in the Ukraine. I would like once again to express my thanks to the
management and employees who continued to operate with such
resilience when servicing our tenants and executing the Company
strategy in the most challenging circumstances. Notably, this year
the business entered the UK market with the acquisition of BizSpace
and I am delighted to welcome all our employees in the UK to the
wider group. I have absolute confidence in the ability of the
management teams in Germany and the UK to ensure the ongoing
integration process is successful, as well as to unlock new growth
opportunities in the UK. Undoubtedly lots of that work still lies
ahead and I look forward to reporting back on progress next
year.
Looking forward, Sirius is well placed to keep delivering on our
growth strategy. Our primary focus remains on our largest market,
Germany, where we expect to continue to deliver attractive and
sustainable returns for shareholders there. The year ahead looks
set to be shaped by the fallout from the conflict in the Ukraine.
Whilst premature to speculate on how the crises will impact our
markets, the Company considers itself well positioned to trade
through any potential headwinds and, most importantly, we all hope
for an immediate cessation of hostilities and de-escalation of the
conflict.
Executing the strategy
Our core strategy continues to focus on the acquisition of
business parks in Germany which have either attractive yields or
value-add potential or both. Sirius transforms these business parks
into higher-quality assets through investment and intensive asset
management. When sites are mature and net income and values have
been optimised, Sirius may refinance 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 to
deploy the asset management capabilities of the Company's internal
operating platform.
Germany
The capex investment programmes upgrade and transform space that
would often be considered as structurally void and, in doing so,
aim to deliver excellent returns by growing income and capital
values. The primary focus in Germany remains on its seven largest
cities of Berlin, Hamburg, Düsseldorf, Cologne, Frankfurt,
Stuttgart and Munich, with a secondary focus on a selection of key
towns such as Aachen, Saarbrücken and Freiburg which benefit from
cross-border opportunities. Sirius seeks mixed-use properties,
primarily light industrial units, business parks or office
buildings outside city centres or on the edge of towns where there
is a high density of commercial and industrial activity and good
transport links. The Company has approximately 6,000 tenants across
Germany representing a wide range of industries. The Company also
manages seven business parks owned by Titanium, a venture with AXA
IM Alts where Sirius holds a 35% equity share.
United Kingdom
BizSpace is a natural fit for Sirius and provides the combined
business with opportunities for meaningful operational and
financial synergies. Like Sirius' German business, BizSpace
primarily owns out of town offices and industrial assets with
similar characteristics. We see significant organic growth
potential in rental pricing and other opportunities in intensive
asset management , particularly given the high level of exposure to
the regions where the UK Government's levelling up initiatives are
being focused. In the UK, we expect acquisition opportunities to
come primarily from portfolio acquisitions or consolidation rather
than acquiring single new assets which are generally much smaller
than those available in Germany. BizSpace owns and operates 72
sites, across 4.3 million sq ft providing a range of office, studio
and workshop units to the SME sector in convenient locations across
the UK.
Shareholder returns
Reflecting the continued robust operational performance and the
strength of the Company's balance sheet, the Board has authorised a
dividend in respect of the second half of the financial year ended
31 March 2022 of 2.37c per share representing 65% of FFO, an
increase of 19.7% on the 1.98c dividend for the equivalent dividend
last year. This brings total dividend for the year to 4.41c
compared to 3.80c for the year ended 31 March 2021 and reflects an
increase of 16.1%.
The Sirius business model continues to deliver not only
progressive income returns but also attractive capital growth as
measured by adjusted net asset value ("adjusted NAV") per share.
Combining the growth in adjusted NAV and taking into account
dividends paid in the period, the Company has delivered a total
shareholder accounting return of 20.0% for the year to 31 March
2022. While dividend distributions have typically contributed
approximately one third and adjusted NAV growth two thirds of
returns, it is pleasing to note that the valuation movement of our
investment properties continues to be derived predominantly from
organic increases in income rather than yield movement. The
consistent delivery of impressive double digit accounting returns
is a testament to the continued excellence of our people who
continue to execute our core strategy that focuses on growing
income at property level and selective asset recycling.
Sustainability
We have continued to develop our approach to sustainability and
ESG as we look to further embed environmental and social value
within the business, with the Board and Senior Management Team
leading on this important topic. We have made significant progress,
but also recognise that we have more to do, in particular as we
start our journey of reducing our environmental footprint with the
ambition of having an overall positive impact on the planet and
society. I would like to thank Kremena Wissel, our Chief Marketing
and Impact Officer, and her team for their work, which now also
includes the integration of BizSpace into our ESG programme.
During the year we have started to implement the core drivers of
our sustainability programme that were identified through the ESG
materiality assessment exercise completed in early 2022. We have
provided more details on our ESG objectives and actions within this
annual report, and we are aiming to provide additional insight into
our ESG strategy, roadmap and targets in our first standalone ESG
Report later in 2022. We have recognised our responsibility to the
environment for a number of years, evidenced by us providing 100%
certified green energy to over 94% of our portfolio. This year we
are going further and have started on our journey to become a net
zero emissions business, as identified in our implementation of the
Task Force on Climate-Related Financial Disclosures ('TCFD'). As we
have made clear before, our ESG decisions will be grounded in
economic viability. As such, we have recently given permission for
a detailed structural and emissions assessment of a sample of our
portfolio which will give the management team the necessary
information to make informed operational and financial decisions
towards taking the business forward on its net zero emissions
pathway.
Our strength this year is best evidenced, yet again, by our
employees. For the second year, the Covid 19 pandemic had the
potential to disrupt our operations, however our employees embraced
the challenge and delivered across the whole business. I have also
been fortunate to be able to visit BizSpace's buildings and meet as
many of the team as possible. I hope that I was able to adequately
demonstrate our welcome to them and the recognition of the value
they will bring to our combined team. People are core to our
business success, and we will continue to develop our approach to
creating a positive social impact, both inside and outside the
company. This includes working with our tenants. I am pleased that
the tenant survey we conducted this financial year showed they
recognise the efforts we made for them and the support we
implemented throughout the pandemic. Our purpose is to empower
small and medium-sized business to grow and to unlock the potential
of our people and our properties. With the support of our people
and all our stakeholders, I can say with confidence we have
achieved our purpose again this year.
Governance and culture
On 1 September 2021, we welcomed Joanne Kenrick to the Board as
an independent Non-Executive Director. Joanne brings a wealth of
commercial marketing experience to the Sirius Board with extensive
listed, private and charitable board experience and has already
provided valuable contributions throughout the year. I am pleased
that the Sirius Board now has a better gender balance with three
female appointees in place which we have already appointed or are
about to be appointed to the important roles of Chairs of the Audit
and Remuneration Committees and as the Senior Independent
Director.
I would also like to congratulate Diarmuid Kelly, who was
promoted to the Board to be Chief Financial Officer, taking over
from Alistair Marks, who we are pleased remains with us on the
Board in a new role as Chief Investment Officer. Further
information relating to these Board changes is provided in the
Corporate Governance Report on page 72 and in the Nomination
Committee report on page 86.
The Board is fully committed to compliance with the UK Corporate
Governance Code as published in July 2018 by the Financial
Reporting Council (the "2018 Code"). Under a dispensation issued by
the Johannesburg Stock Exchange, the Company is not required to
apply the King IV Code on Governance(TM) for South Africa 2016. A
detailed description of our governance and leadership arrangements
and how we have complied with the principles and provisions of the
2018 Code is provided in the Corporate Governance Report on pages
71 to 79. This includes an explanation of the link between the
Board's decision-making and the Group's purpose and strategy. It
also details how stakeholder interests and the other matters set
out in Section 172 of the UK Companies Act 2006 have been
considered in the Board's discussions and decision making.
Information on the Group's culture can be found on page 72 of the
Corporate Governance Report.
Outlook
On behalf of the Board, I would like to thank all those
connected with Sirius for their hard work which has allowed the
Company to record another strong year, with the business continuing
to execute its strategy effectively and further building on the
successful foundations that have been laid over the last decade.
The leadership team has performed extremely well through the
Covid-19 pandemic, and this gives me every confidence of its
ability to deliver returns in both good and more challenging times.
Following the issuance of two corporate bonds which resulted in a
reduction of its weighted average interest rate to 1.4% and
extension of its weighted average debt term to 4.3 years Sirius is
in a strong position to continue to execute on its ambitious growth
strategy in both Germany and the UK.
Daniel Kitchen
Chairman
10 June 2022
Asset management review - Germany
Active asset management
EUR113.7m
total annualised rent roll
EUR6.31 per sqm
average rate
EUR201.9m
of new on balance sheet acquisitions completed or notarised in
the period
Introduction
Sirius owns and manages business parks and industrial estates in
and around the top seven cities in Germany, as well as some sites
located in border towns to France and the Netherlands. Sirius
operates a value add business model where it utilises the asset
management expertise of its internal operating platform and aims to
increase occupancy, net operating income and capital values in the
properties it owns. The Company currently owns a total of 69
mixed-use industrial, warehouse and office properties in Germany
whilst managing an additional nine (seven of which it holds a 35%
interest through the Titanium venture with AXA IM Alts).
In Germany the Company provides 1.8 million sqm of lettable
production, storage and office space, most of which is offered on a
conventional basis with approximately 6% of space converted into
Sirius' unique and highly effective Smartspace products which are
offered on a more flexible basis with a range of services.
Smartspace products include serviced offices, self-storage and
workboxes and are usually created from excess office space,
basements and redundant halls which most conventional property
owners would often leave as structural vacancy as they do not have
the capacity or know-how to deal with such space. Key to providing
such a wide range of options to its tenants is the Company's
internal operating platform and sophisticated online marketing and
IT infrastructure which it has developed over the last 15
years.
Sirius has over 6,000 tenants in Germany; 38% of the annualised
rent roll is attributable to the top 50 tenants which are generally
large multinational businesses and 55% to around 3,000 SME tenants
which form the backbone of the German economy. The remaining 7% of
its annualised rent roll comes from the 3,000 micro-SMEs and
individual tenants which rent space through the Company's
Smartspace range of products where they benefit from cost certainty
and maximum flexibility.
The Company's ability to provide a mix of conventional and
flexible space significantly enhances the returns and
sustainability of income that can be generated from German light
industrial and out of town office assets. This has been proven by
the Company's track record of being able to deliver significant
organic increases in net operating income in Germany over the last
15 years in all market conditions.
Lettings and rental growth
The Company recorded a like-for-like increase in its German
annualised rent roll of 6.4% to EUR102.7 million (31 March 2021:
EUR96.5 million*) whilst the German total annualised rent roll
increased in the year end by EUR17.2 million to EUR113.7 million
with EUR6.2 million relating to organic growth and EUR11.0 million
representing the impact from acquisitions.
Encouragingly, like-for-like average rate per sqm increased by
5.3% to EUR6.50 (2021: EUR6.17*) demonstrating the reversionary
potential within the portfolio that the Company is confident of
realising through its range of intensive asset management
activities.
Like for like occupancy increased to 87.4% (March 2021: 86.6%*)
whilst, importantly, the acquisitions made during the year resulted
in total occupancy reducing to 84.2% (March 21; 86.6%*) providing
significant opportunity to add value and grow income which is
expected to help Sirius continue its strong organic growth record
into the future.
The increase in annualised rent roll in the period can be broken
down into move-outs of 127,091 sqm that were generating EUR10.2
million of annualised rent roll at an average rate of EUR6.67 per
sqm being offset by move-ins of 140,087 sqm generating EUR13.5
million of annualised rent roll at an average rate of EUR8.02 per
sqm. Additionally, contracted rental rate increases and uplifts on
renewals added a further EUR2.9 million to the annualised rent roll
at the period end. As mentioned above, the acquisitions that
completed in the financial year added EUR11.0 million to the
annualised rent roll.
The movement in annualised rent roll is illustrated in the table
below:
EURm
----------------------------------- ------
Annualised rent roll 31 March 2021 96.5 *
Move-outs (10.2)
Move-ins 13.5
Contracted uplifts 2.9
Acquisitions 11.0
----------------------------------- ------
Annualised rent roll 31 March 2022 113.7
----------------------------------- ------
* Annualised rent roll of EUR96.5 million when excluding the
expected move-out in the first half of the March 2022 financial
year relating to the Fellbach II acquisition which completed in
March 2021.
Underpinning the strong increase in rent roll in the year was an
8.6% increase in the number of enquiries generated compared to the
previous year, while a conversion rate of 13% remained steady year
on year. A month-by-month comparison of enquiries relating to the
wholly owned portfolio in Germany is set out in the table
below:
Enquiries comparison FY22 to FY21
No. of No. of
enquiries enquiries Change
FY22 FY21 %
---------- ---------- ---------- ------
April 1,235 1,031 19.8%
May 1,333 1,044 27.7%
June 1,341 1,176 14.0%
July 1,305 1,198 8.9%
August 1,435 1,241 15.6%
September 1,387 1,353 2.5%
October 1,351 1,354 (0.2)%
November 1,421 1,341 6.0%
December 1,183 1,049 12.8%
January 1,495 1,376 8.6%
February 1,324 1,268 4.4%
March 1,370 1,467 (6.6)%
---------- ---------- ---------- ------
Total 16,180 14,898 8.6%
---------- ---------- ---------- ------
Against the backdrop of the pandemic, disruption to supply
chains and changes in tenant demands the Company continued to adopt
a highly progressive and flexible approach to its marketing
activities with several initiatives launched based on data
generated from detailed analysis of online search patterns.
Flexibility and competitive pricing continued to be key factors in
decision making whilst demand for storage and flexible office space
also increased compared to the prior year.
As a result of having direct line of sight into the marketplace
the Company was able to focus its marketing strategies on spaces
and products that meet fast changing demand dynamics. Accordingly,
the Company generated an increased number of enquiries compared
with the prior year which resulted in an increase in the volume of
sales by sqm.
Details of the month-by-month lettings performance and square
metre volumes compared to the same period in the previous year are
set out in the table below:
Lettings comparison FY22 to FY21
Average Average
New deals New deals Total sqm Total sqm sqm per sqm per
twelve twelve let twelve let twelve deal twelve deal twelve
months months months months months months
to March to March to March to March to March to March
2022 2021 2022 2021 2022 2021
---------- --------- --------- ----------- ----------- ------------ ------------
April 219 115 13,463 8,025 61 70
May 170 130 15,953 11,282 94 87
June 166 165 12,629 11,242 76 68
July 139 215 15,185 13,170 109 61
August 182 259 11,877 15,324 65 59
September 175 226 14,650 15,052 84 67
October 193 220 14,336 12,371 74 56
November 163 192 10,357 14,193 64 74
December 171 168 12,042 12,327 70 73
January 138 215 15,065 13,248 109 62
February 198 197 13,769 14,502 70 74
March 157 143 12,778 20,329 81 142
---------- --------- --------- ----------- ----------- ------------ ------------
Total 2,071 2,245 162,102 161,065 78 72
---------- --------- --------- ----------- ----------- ------------ ------------
Tenant retention in the period was encouraging with a 75%
renewal rate by square metres in the period being successfully
extended (2021: 72%). Overall, the continued positive performance
in marketing, lettings and renewals provides a clear demonstration
of the ability of the Company to grow against the backdrop of
rapidly changing market dynamics.
Cash collection
Having visibility and close control of cash collection continues
to be an advantage of having an internal operating platform as the
impact of the pandemic remains. As a result of the combination of
close collaboration between the Company's experienced cash
collection team and on-site staff the Company was able to increase
its cash collection rate to 98.4% (March 2021: 98.2%) as set out in
the table below. This was also despite the material increase in
total billing to EUR163.0 million (net of VAT) from EUR143.8
million in 31 March 2021.
Cash collection
Invoiced Outstanding Collection
EUR000 EUR000 %
---------- -------- ----------- ----------
April 12,551 135 98.9%
May 12,488 149 98.8%
June 12,747 144 98.9%
July 12,895 165 98.7%
August 12,932 161 98.8%
September 13,113 180 98.6%
October 13,085 164 98.7%
November 14,090 190 98.7%
December 14,833 251 98.3%
January 14,565 313 97.9%
February 14,859 327 97.8%
March 14,863 431 97.1%
---------- -------- ----------- ----------
Total 163,021 2,610 98.4%
---------- -------- ----------- ----------
As at year end uncollected debt amounted to EUR2.6 million with
outstanding rent of EUR2.0 million and service charge prepayments
of EUR0.6 million. From a tenant base of approximately 6,000
tenants the Group issued ten deferred payment plans amounting to
EUR0.6 million whilst total write-offs amounted to EUR45,000. The
Company expects to collect most of the outstanding debt for the
period over the next twelve months through its regular debt
collection activities.
Acquisitions and disposals
As investment markets in Germany grew in confidence following
the easing of the pandemic, the Company was able to increase its
investment activity, finishing the year with a total of EUR201.9
million invested or committed in ten acquisitions. These fully
owned assets are expected to contribute a total of EUR8.8 million
of net operating income at 62% occupancy, representing an EPRA net
initial yield of 4.4%. The acquisitions provide the opportunity to
grow income through increasing occupancy, with more than 118,000
sqm of vacant space and significant scope for selective investment
in unused or underutilised space.
A summary of the acquisitions that completed or were notarised
in the year are detailed in the table below:
Total Acquisition
EPRA
investment Annualised non-recoverable Acquisition Annualised net
(incl. service
acquisition Total Acquisition Acquisition acquisition charge maintenance acquisition initial
rent roll yield
costs) acquisition occupancy vacant * costs costs NOI * *(1)
EUR000 sqm % sqm EUR000 EUR000 EUR000 EUR %
----------------- ------------ ------------ ----------- ----------- ------------ ---------------- ------------ ------------ --------
Sirius
Essen I 10,706 14,711 80 2,897 829 (125) (13) 691 6.5
Öhringen 9,023 18,010 - 18,010 - (609) (32) (641) (7.1)
Heiligenhaus 14,237 45,081 77 10,269 1,396 (233) (41) 1,123 7.9
Frankfurt
III 21,245 10,187 54 4,696 849 (209) (43) 598 2.8
Essen II 12,151 11,709 81 2,248 954 (92) (11) 851 7.0
Erfurt 11,679 22,333 81 4,143 766 (123) (20) 623 5.3
Oberhausen 39,843 77,605 63 28,680 3,218 (795) (90) 2,334 5.9
Neckartenzlingen 34,485 54,514 80 10,705 2,196 (237) (22) 1,937 5.6
Rastatt 8,783 21,426 - 21,426 3 (220) (19) (236) (2.7)
----------------- ------------ ------------ ----------- ----------- ------------ ---------------- ------------ ------------ --------
Subtotal 162,152 275,576 63 103,074 10,211 (2,643) (291) 7,280 4.5
----------------- ------------ ------------ ----------- ----------- ------------ ---------------- ------------ ------------ --------
Notarised
Düsseldorf
III** 39,789 34,310 55 15,517 2,105 (521) (31) 1,552 3.9
----------------- ------------ ------------ ----------- ----------- ------------ ---------------- ------------ ------------ --------
Total 201,941 309,886 62 118,591 12,316 (3,164) (322) 8,832 4.4
----------------- ------------ ------------ ----------- ----------- ------------ ---------------- ------------ ------------ --------
(1) Includes purchaser costs.
* See the Glossary section of the Annual Report and Accounts 2022.
** Expected to complete July 2022.
A summary of the opportunities and characteristics of each asset
acquired in the period is detailed below.
-- The Essen I asset completed in May 2021 and was acquired for
total acquisition costs of EUR10.7 million. The asset provides a
mix of production, storage and office space located in the heart of
Germany's industrial Rhein-Ruhr region. The acquisition represents
the Company's first of two investments in Essen during the period,
providing for meaningful operational synergies in a location the
Company knows well through its long-standing management of an asset
located in the city.
-- The Öhringen asset was completed in August 2021 for total
acquisition costs of EUR9.0 million. Located in the town of
Öhringen in Baden-Württemberg, the asset provides over 18,000 sqm
of lettable space including 15,800 sqm of desirable warehouse
space. The site includes a land parcel that may be considered for
future light industrial development amounting to 11,600 sqm. The
asset, having been acquired wholly vacant,, has already benefited
from integration into the Sirius operating platform with occupancy
rapidly increasing to approximately 92% and generating EUR1.0
million of annualised rent roll as at 31 March 2022.
-- The Oberhausen business park, completed in November 2021 for
EUR39.8 million, is located in a well-developed commercial area of
the city of Oberhausen, in the northwest of Germany's Rhein-Ruhr
region. Providing day one net operating income of EUR2.3 million,
the asset offers a wide range of uses with approximately 77,600 sqm
of lettable space, of which 47,400 sqm is office space, 19,200 sqm
warehouse space, 4,600 sqm storage and 6,400 sqm other space.
-- The multi-tenanted business park at Heiligenhaus,
Nordrhein--Westfalen, was acquired for total acquisition costs of
EUR14.2 million. The asset provides approximately 45,000 sqm of
lettable space consisting of 23,200 sqm of office space, 11,400 sqm
of warehouse space, 7,800 sqm of production space and 2,600 sqm of
other space. The town of Heiligenhaus is located between the cities
of Essen, Duisburg, Düsseldorf and Wuppertal and benefits from good
autobahn and public transport links. The property was acquired with
annualised net operating income of EUR1.1 million per annum at 77%
occupancy and, with an undemanding average rent of EUR2.44 per sqm
(excluding parking and other income), it provides opportunity
through vacancy and to capture reversionary income growth.
-- The Company completed the acquisition of a multi-tenanted
office tower in Frankfurt comprising total lettable area of
approximately 10,000 sqm for total acquisition costs of EUR21.2
million. At acquisition, the property generated annualised net
operating income of EUR598,000 at 54% occupancy equating to an
average rent of EUR11.02 per sqm (excluding parking and other
income). The property benefits from its location close to two main
autobahn routes and aligns to the Company's strategy of providing a
range of flexible out of town office products that appeal to the
local market.
-- Following on from the completion of the Company's first
investment in Essen in May 2021 the Company added to its footprint
through the completion of the Essen II property for total
acquisition costs of EUR12.2 million in November 2021. The Essen II
asset comprises 11,709 sqm of office and production space and, at
81% occupancy, generated annualised net operating income of
EUR851,000 representing an attractive day one net initial yield of
7.0%.
-- The completion of the multi-tenanted business park asset in
Erfurt, lying halfway between Frankfurt and Berlin, represents the
Company's first investment into this key logistics location. With
total acquisition costs of EUR11.7 million the asset consists of
14,000 sqm of industrial space, 7,400 sqm of office space and 760
sqm of other space. At date of acquisition, the site generated
EUR623,000 of annualised net operating income at 81% occupancy
providing opportunity to grow income through the letting of vacant
space as well as the potential to invest into the 18,000 sqm land
parcel acquired as part of the transaction.
-- The Company completed the acquisition of the Neckartenzlingen
property, located to the south of Stuttgart, for total acquisition
costs of EUR34.5 million in December 2021. The high-quality asset
comprises 54,515 sqm of predominantly production and warehouse
space with annualised net operating income of EUR1.9 million and a
WALE of 8.1 years providing stable, long-term cash flows. Income
growth opportunity is expected to come from the letting of vacant
space which amounted to 10,700 sqm (19.6% of total space) at date
of acquisition.
-- The fully vacant Rastatt asset completed in March 2022 for
total acquisition costs amounting to EUR8.8 million. Located in a
key logistical city on the French-German border, this property
provides 6,000 sqm of office space and 15,000 sqm of industrial
space. With over 21,000 sqm of high-quality vacant space the
Company is confident of quickly growing occupancy and rental
income.
-- Within the period the Company notarised the acquisition of
the Düsseldorf III asset which is expected to complete in July 2022
for total acquisition costs of EUR39.8 million. The multi-tenanted
site is located in close proximity to the Düsseldorf international
airport and provides 24,400 sqm of office and 9,900 sqm of
industrial space. With over 15,500 sqm of vacant space at the date
of notarisation, the site provides significant rental growth
opportunity. In addition, as the Company's third investment in the
Düsseldorf market, Sirius expects to benefit from meaningful
operational synergies.
The marketing and sales capabilities within the operating
platform are part of several asset management disciplines that
provide the Company with a significant competitive advantage over
other owners of light industrial and business park assets in
Germany. This allows Sirius to be more flexible with how it
configures and offers its vacant space which should result in the
Company being able to more easily to fill up and transform these
newly acquired sites and hence make the high returns at the asset
level which underpins the Company's significant organic growth it
generates each year.
Capex investment programmes
The Group's capex investment programmes have historically and
continue to be focused on the transformation of sub-optimal vacant
space acquired through the Company's acquisition programme, but now
also includes undervalued and lower quality space which it receives
back from vacating tenants. This acquired vacant space is usually
purchased for very little or no cost due to it being considered as
structurally void by former owners, whilst the low quality vacated
space has significant potential to increase income and value
through investment before re-letting.
The capex investment programme commenced in 2014 on sub-optimal
vacant space identified within the existing portfolio and has been
expanded significantly through all of the acquisitions which have
taken place since then. To date, approximately 381,000 sqm of space
has been transformed with a total investment of EUR58.5 million
generating EUR24.3 million of annualised rent roll at 78%
occupancy. As occupancy increases to budgeted levels, an additional
EUR0.9 million of annualised rent roll is expected to be generated
from this transformed space. The success of the investments made
has been attributable in part to the unique marketing and sales
initiatives that Sirius deploys.
Not only has a significant amount of incremental annualised rent
roll been generated but also the transformation and let up of this
suboptimal space has made a strong contribution to the improvement
in service charge cost recovery and valuation gains the Company has
recorded in recent years. In addition, the transformative nature of
the Company's capex investment programmes increases the overall
desirability and quality of the portfolio.
More detail on the Company's capex investment programme to date
is provided in the following table:
Annualised
rent roll
Annualised * Rate
rent roll
* increase Occupancy Rate per sqm
achieved achieved achieved
Investment Actual increase to Occupancy to per sqm to
March March March
budgeted spend budgeted 2022 budgeted 2022 budgeted 2022
Combined capex
programmes Sqm EURm EURm EURm EURm % % EUR EUR
------------------- ------- ---------- ------ ---------- ---------- --------- --------- --------- ---------
Completed 380,876 64.0 58.5 23.2 24.3 81% 78% 6.27 6.85
In progress 1,652 1.2 0.6 0.1 - 80% - 6.99 -
To commence
in next financial
year 62,497 15.8 - 4.4 - 81% - 7.26 -
------------------- ------- ---------- ------ ---------- ---------- --------- --------- --------- ---------
Total 445,025 81.0 59.1 27.7 24.3 81% - 6.41 -
------------------- ------- ---------- ------ ---------- ---------- --------- --------- --------- ---------
* See the Glossary section of the Annual Report and Accounts 2022.
In addition to the space that has been completed and let or is
currently being marketed, a total of approximately 64,000 sqm of
space is either in progress of transformation or awaiting approval
to commence transformation. A further EUR16.4 million is expected
to be invested into this space, on top of the EUR0.6 million
already spent, and, based on achieving budgeted occupancy,
incremental annualised rent roll in the region of EUR4.5 million is
expected to be generated from it.
As set out within the acquisitions analysis within this report,
approximately 118,000 sqm of vacant space was acquired relating to
assets that completed or were notarised in the year under review. A
total of 76,361 sqm of space was identified as suitable for
investment within these assets and have subsequently been added to
the capex investment programme. The capex investment programmes
have been one of the key income and valuation growth drivers over
the last few years and the Company will continue to seek to acquire
assets with sub-optimal vacancy in order to refuel these highly
accretive programmes.
In addition to the capex investment programmes on the acquired
sub-optimal vacancy, Sirius also looks for opportunities to upgrade
recently vacated space that is returned as a result of move-outs.
Within the existing vacancy as at 31 March 2022, the Company has
identified approximately 27,300 sqm of recently vacated space that
has potential to be upgraded. This space was generating EUR1.0
million in annualised rent roll from the existing tenants and can
be upgraded with an investment of EUR6.4 million to generate EUR2.4
million in annualised rent roll when re-let. This selective
investment in vacated space allows the Company to capture
reversionary potential whilst significantly enhancing the
desirability and value of lower quality space.
The analysis below details the sub-optimal space and vacancy at
31 March 2022 and highlights the opportunity from developing this
space.
Vacancy analysis - March 2022
------------------------------ ---------
Total space (sqm) 1,785,276
Occupied space (sqm) 1,503,097
Vacant space (sqm) 282,179
Occupancy 84%
------------------------------ ---------
Capex
% of total investment ERV *
space Sqm EURm (post investment)
---------------------------------- ---------- ------- ----------- ------------------
Structural vacancy 2% 39,879 - -
---------------------------------- ---------- ------- ----------- ------------------
New acquisitions capex investment
programme 4% 64,145 (16.4) 4.5
Recently vacated space 2% 27,300 (6.4) 2.4
---------------------------------- ---------- ------- ----------- ------------------
Total space subject to investment 5% 91,445 (22.8) 6.9
---------------------------------- ---------- ------- ----------- ------------------
Lettable vacancy:
Smartspace vacancy 1% 26,455 - 2.8
Other vacancy 7% 124,400 (0.7) 7.1
---------------------------------- ---------- ------- ----------- ------------------
Total lettable space 8% 150,855 (0.7) 9.9
---------------------------------- ---------- ------- ----------- ------------------
Total vacancy 16% 282,179 (23.5) 16.8
---------------------------------- ---------- ------- ----------- ------------------
* See the Glossary section of the Annual Report and Accounts 2022.
As a result of adding the vacant space within the acquired
assets in the period, the Company's headline occupancy rate reduced
to 84.2% (March 2021: 86.6%). When excluding the structural
vacancy, the Company has over 240,000 sqm of space to let with an
ERV of approximately EUR16.8 million.
Whilst the capex investment programmes are a key part of Sirius'
strategy, they represent one of several ways in which the Company
can organically grow income and capital values. A wide range of
asset management capabilities including the capturing of
contractual rent increases, uplifts on renewals and the re-letting
of space at higher rates are expected to continue to make a strong
contribution to the Company's annualised rent roll. Should a high
inflationary environment persist the contribution to annualised
rent roll from rent increases is expected to increase.
Whilst adding vacancy through acquisitions enhances the organic
growth opportunity into the future, the Company maintains a risk
adjusted strategy and expects to continue to hold a significant
amount of core mature assets in order to maintain a balanced
portfolio that provides a combination of stable, long-term
financeable income with value-add assets with growth potential.
Well-diversified income and tenant base
Against the backdrop of continued market disruption, the
importance of a well-diversified tenant base and wide range of
products is clear. Sirius' portfolio includes production, storage
and out of town office space that caters to multiple usages and a
range of sizes and types of tenants. The Company's business model
is underpinned by its tenant mix which provides stability through
its large long-term anchor tenants and opportunity through the SME
and flexible individual tenants.
The Group's large anchor tenants are typically multinational
corporations occupying production, storage and related office space
whereas the SMEs and individual tenants occupy space on both a
conventional and a flexible basis including space marketed under
the Company's popular Smartspace brand which provides tenants with
a fixed cost and maximum flexibility. The Company's largest single
tenant contributes 2.2% of total annualised rent roll whilst 7.1%
of its annualised rent roll comes from government tenants.
SMEs in Germany, the Mittelstand, are typically defined as
companies with revenues of up to EUR50.0 million and up to 500
employees. SME tenants remain a key target group which the
Company's internal operating platform has demonstrated an ability
to attract in significant volumes as evidenced through the high
number of enquiries that are generated each month, mainly through
the Company's own marketing channels. The wide range of tenants
that the Sirius marketing and sales team is able to attract is a
key competitive advantage for the Company and results in a
significantly de-risked business model when compared to other
owners of multi-tenanted light industrial and business park
assets.
The table below illustrates the diverse nature of tenant mix
within the Sirius portfolio at the end of the reporting period:
No. of % of total
tenants Annualised annualised
as at % of rent roll rent roll Rate
31 March Occupied occupied * * per sqm
2022 sqm sqm EURm % EUR
-------------------------- --------- --------- --------- ---------- ----------- --------
Top 50 anchor tenants(1) 50 671,748 45% 43.7 38% 5.41
Smartspace SME tenants(2) 3,016 69,935 5% 7.7 7% 9.23
Other SME tenants(3) 3,010 761,414 50% 62.3 55% 6.82
-------------------------- --------- --------- --------- ---------- ----------- --------
Total 6,076 1,503,097 100% 113.7 100% 6.31
-------------------------- --------- --------- --------- ---------- ----------- --------
(1) Mainly large national/international private and public tenants.
(2) Mainly small and medium-sized private and public tenants.
(3) Mainly small and medium-sized private and individual tenants.
* See the Glossary section of the Annual Report and Accounts 2022.
Smartspace and First Choice
Sirius' Smartspace products are designed with flexibility in
mind, allowing tenants to benefit from a fixed cost which has
proven to be desirable in all market conditions. The majority of
Smartspace has been developed from space that is either sub-optimal
or considered to be structurally void by most light industrial real
estate operators. Following conversion, the area is transformed
into space that can be let at significantly higher rents than the
rest of the business park and, as a result, is highly accretive to
both income and value.
5,267 sqm of Smartspace was created in the year including 3,592
sqm of Smartspace storage product developed as a direct result of
the increased demand for storage space identified by the Company's
sales and marketing teams in the last few years. The Company was
also able to capitalise on high storage demand by providing
additional container space storage on non-income producing land. At
31 March 2022, these containers were generating EUR305,000 (31
March 2021: EUR168,000) in annualised rent roll.
The total amount of Smartspace in the portfolio at the year end
was 96,390 sqm (31 March 2021: 93,705 sqm), generating EUR7.7
million (31 March 2021: EUR6.5 million) of annualised rent roll
which equates to 6.8% of the Company's total annualised rent roll.
Most encouragingly, average rate per sqm increased by 10.6% year on
year, highlighting the premium pricing opportunity associated with
flexibility.
The table below illustrates how Smartspace products contribute
to the portfolio as a whole:
Annualised
rent roll % of total Rate *
* Smartspace per sqm
(excl. annualised (excl.
service rent roll service
Smartspace product Occupied Occupancy charge) * charge)
type Total sqm sqm % EUR % EUR
-------------------- --------- -------- --------- ---------- ----------- --------
First Choice office 5,117 3,156 62% 838,000 11% 22.13
SMSP office 32,031 23,890 75% 2,744,000 35% 9.57
SMSP workbox 5,974 5,829 98% 435,000 6% 6.22
SMSP storage 47,817 34,870 73% 3,216,000 42% 7.69
SMSP container - - - 305,000 4% n/a
-------------------- --------- -------- --------- ---------- ----------- --------
SMSP subtotal 90,939 67,745 74% 7,538,000 97% 9.27
-------------------- --------- -------- --------- ---------- ----------- --------
SMSP FlexiLager 5,451 2,190 40% 209,000 3% 7.95
-------------------- --------- -------- --------- ---------- ----------- --------
SMSP total 96,390 69,935 73% 7,747,000 100% 9.23
-------------------- --------- -------- --------- ---------- ----------- --------
* See the Glossary section of the Annual Report and Accounts 2022.
Asset management review - UK
Ongoing integration and identification of new opportunities
GBP45.1m
total annualised rent roll
GBP11.69 per sq ft
average rate
99.6%
cash collection rate
Introduction
BizSpace currently owns and operates a total of 72 industrial
and out of town office properties across the UK. Through its
internal operating platform it aims to increase occupancy, net
operating income and capital values. BizSpace provides over 4.2
million sq ft of lettable light industrial, studio, storage and
office space, on both conventional and flexible terms.
BizSpace has approximately 3,400 customers; 26% of the
annualised rent roll is attributable to the Company's top 100
tenants which are generally larger corporate customers and 74% is
attributable to SME and micro-SME customers.
Lettings and rental growth
Since the Group completed the acquisition of BizSpace on 15
November 2021, annualised rent roll has increased by 7.6% to
GBP45.1 million* (15 November 2021: GBP41.9 million*). The increase
in annualised rent roll was delivered through a combination of
increases in occupancy and strong growth in average rate.
Occupancy increased to 90.5%* from 88.7%* within the 4.5 month
period of ownership, highlighting the attraction of BizSpace's
range of spaces and products to a variety of tenants.
Encouragingly, the 4.5 month period of ownership saw a 6.5%
increase in average rate from GBP10.98* per sq ft to GBP11.69* per
sq ft, highlighting the Company's ability, through its internal
operating platform, to capture reversion in a market characterised
by undersupply.
The positive net take-up of space in the period can be broken
down into move-ins of 323,528 sq ft generating GBP5.8 million of
annualised rent roll at an average rate of GBP18.04 per sq ft being
offset by move-outs of 282,037 sq ft that were generating GBP4.4
million of annualised rent roll at an average rate of GBP15.64 per
sq ft. Additionally, rental uplifts on existing tenants added a
further GBP1.8 million to the annualised rent roll at the period
end.
The movement in annualised rent roll is illustrated in the table
below:
GBPm
-------------------------------------- ------
Annualised rent roll 15 November 2021 41.9 *
Move-ins 5.8
Move-outs (4.4)
Uplifts on existing tenants 1.8
-------------------------------------- ------
Annualised rent roll 31 March 2022 45.1 *
-------------------------------------- ------
* Excluding the Ipswich asset, which is unoccupied.
With tenants needs continuing to change rapidly and flexibility
becoming more of a necessity BizSpace is well placed to continue
its strong lettings and rental growth into the new financial
year.
Cash collection
A combination of its dedicated cash collection team and the
strong tenant relationships maintained by its on-site staff
resulted in the BizSpace recording a 99.6% cash collection rate for
the period under review. A month-by-month summary detailing cash
collection is set out in the table below.
Cash collection
Invoiced Outstanding Collection
GBP000 GBP000 %
--------- -------- ----------- ----------
November 3,281 - 100.0%
December 4,413 5 99.9%
January 3,822 5 99.9%
February 3,608 33 99.1%
March 4,405 29 99.3%
--------- -------- ----------- ----------
Total 19,529 72 99.6%
--------- -------- ----------- ----------
From total net of VAT billing amounting to GBP19.5 million,
uncollected debt for the period amounted to GBP72,000, representing
a cash collection rate of 99.6%. From a tenant base of
approximately 3,400 tenants the Company has one deferred payment
plan in place whilst total write-offs amounted to GBP21,000. The
Company expects to collect the majority of the outstanding debt for
the period over the next twelve months through its regular debt
collection activities.
Site investment
BizSpace has historically invested in its sites in order to
maintain and upgrade its spaces and allow it to adapt to changes in
tenant demand and drive occupancy and price. In the period under
review the BizSpace invested a total of GBP1.6 million into its
sites focussed primarily on improving the condition of spaces and
expects to identify further similar investment opportunities in the
new financial year whilst at the same time it will continue to
progress its ESG related investment in order to align itself with
the wider Group.
Well-diversified income and tenant base
BizSpace's portfolio includes light industrial, studio and out
of town office space and storage that caters to multiple usages and
a range of sizes and types of tenants. As a result, the Company's
business model is underpinned by a well-diversified tenant
base.
The Company's top 100 tenants, which are typically large
corporates, account for 26% of the annualised rent roll with the
next 900 SME tenants accounting for 44% of annualised rent roll.
The remaining 31% of annualised rent roll relates to over 2,000 SME
and micro-SME tenants which occupy 23% of the overall estate.
The table below illustrates the diverse nature of tenant mix
within the BizSpace portfolio at the end of the reporting
period:
No. of % of total
tenants Annualised annualised Rate
as at % of rent roll rent roll per sq
31 March Occupied occupied * * ft
2022 * sq ft * sq ft * GBPm % GBP
---------------------- --------- -------- --------- ---------- ----------- -------
Top 100 tenants 100 1.1 28% 11.5 26% 10.21
Next 900 tenants 900 1.9 49% 19.7 44% 10.61
Remaining SME tenants 2,376 0.9 23% 13.9 30% 15.92
---------------------- --------- -------- --------- ---------- ----------- -------
Total 3,376 3.9 100% 45.1 100% 11.69
---------------------- --------- -------- --------- ---------- ----------- -------
* Excluding the Ipswich asset, which is unoccupied.
SMEs in the UK are typically defined as companies with revenues
of up to GBP50.0 million and up to 250 employees. The Company's
internal operating platform and product offering have a strong
track record of attracting and retaining customers in this segment
of the market which is expected to continue to grow as a result of
structural trends impacting the UK market.
Financial review
Strong profits and total shareholder accounting return in
transformational year
"Sirius has delivered another strong return for shareholders
through a combination of continued organic and acquisitive growth
in Germany, the acquisition of BizSpace in the UK and the issuance
of EUR700 million in corporate bonds."
Strong trading, growth and diversification
The Company delivered profit before tax of EUR168.9 million for
the year ended 31 March 2022 representing a 3.2% increase on the
prior year. Despite markets and our tenants continuing to be
affected by the lingering effects of the Covid-19 pandemic, the
Company recorded a transformative year in which it achieved
significant organic and acquisitive growth and issued its first
corporate bonds. In addition, the Company completed the acquisition
of BizSpace in November 2021 representing the first significant
corporate transaction in the Company's history and its first entry
into a new market outside of Germany.
Total funds from operations(1) ("FFO"), which is the key measure
used by Sirius for operational performance, increased by 22.5% to
EUR74.6 million, which drove a 19.7% increase in the dividend for
the six months ended 31 March 2022. The increase in adjusted net
asset value per share(2) combined with dividends paid in the period
resulted in a total accounting return of 20.0% (31 March 2021:
19.5%).
Trading performance and earnings
As mentioned above, the Company reported a profit before tax in
the year ended 31 March 2022 of EUR168.9 million (31 March 2021:
EUR163.7 million), representing an increase of 3.2%. FFO increased
by 22.5% to EUR74.6 million (31 March 2021: EUR60.9 million) with
BizSpace contributing EUR5.8 million in respect of the 4.5 months
of ownership following the completion of the acquisition on 15
November 2021. Along with the impact from BizSpace, the increase in
FFO came from a combination of strong organic growth within the
existing portfolio in Germany together with a modest contribution
from assets acquired in the period.
Further detail on the Company's financial performance and
contribution from BizSpace in the year ended 31 March 2022 is set
out below.
Germany UK Group
EURm EURm EURm
---------------------- ------- ----- -----
Net operating income 109.1 13.4 122.5
Funds from operations 68.8 5.8 74.6
Profit after tax 138.7 9.3 148.0
---------------------- ------- ----- -----
(1) Refer to note 29 in the Annual Report and Accounts 2022.
(2) Refer to Glossary of terms of the Annual Report and Accounts 2022.
The organic growth within Germany came predominantly from
another strong improvement in like-for-like annualised rent roll
which increased by 6.4% and was supported by a combination of
ongoing capex investment programmes, contracted escalations,
uplifts on renewals and other asset management initiatives.
Following completion of the acquisition of BizSpace, the Company
starts the new financial year with annualised rent roll of EUR167.0
million.
Whilst the Company's basic and diluted earnings per share
figures were impacted by one-off costs relating to the acquisition
of BizSpace and refinancing activity, significant growth was
recorded in adjusted earnings, basic EPRA earnings and diluted EPRA
earnings. The impact of costs relating to the repayment of secured
debt facilities using proceeds from the corporate bond issuances,
the BizSpace acquisition and write off of the related goodwill
resulted in a 4.8% decrease in basic EPS to 13.48c per share.
Adjusted EPS, Basic EPRA EPS and Diluted EPRA EPS which exclude the
impact of the one-off effects described above, increased by
approximately 15.6%, 14.4% and 14.5% respectively reflecting the
strong operational performance in the year.
31 March 31 March
2022 2021
Earnings cents per Earnings cents per Change
EUR000 No. of shares share EUR000 No. of shares share %
------------- -------- ------------- ---------- -------- ------------- ---------- ------
Basic EPS 147,873 1,097,082,162 13.48 147,451 1,040,956,722 14.16 (4.8)
Diluted EPS 147,873 1,112,360,781 13.29 147,451 1,056,541,472 13.96 (4.7)
Adjusted
EPS* 71,125 1,097,082,162 6.48 58,400 1,040,956,722 5.61 15.6
Basic EPRA
EPS 70,695 1,097,082,162 6.44 58,633 1,040,956,722 5.63 14.4
Diluted EPRA
EPS 70,695 1,112,360,781 6.36 58,633 1,056,541,722 5.55 14.5
------------- -------- ------------- ---------- -------- ------------- ---------- ------
* See note 13 and the Business analysis section of the Annual Report and Accounts 2022.
Total revenue, which comprises rent, fee income relating to
Titanium, other income from investment properties, and service
charge income, increased from EUR165.4 million to EUR210.2 million
in the period. Annualised rent roll in Germany increased by 17.8%
from EUR96.5 million to EUR113.7 million with acquisitions
contributing EUR11.0 million with organic growth contributing
EUR6.2 million. The acquisition of BizSpace resulted in rent roll
increasing by EUR49.6 million with organic growth since the date of
completion contributing an additional EUR3.7 million in annualised
rent roll.
Germany UK * Group
EURm EURm EURm
----------------------------- ------- ----- -----
Opening annualised rent roll 96.5** - 96.5
BizSpace acquisition - 49.6 49.6
Additions 11.0 - 11.0
Move-ins/outs 3.3 1.6 4.9
Uplifts 2.9 2.1 5.0
----------------------------- ------- ----- -----
Closing annualised rent roll 113.7 53.3 167.0
----------------------------- ------- ----- -----
* Translated at GBP:EUR rate (1.18) as of 31 March 2022.
** Annualised rent roll EUR96.5 million when excluding the
expected move-out in the first half of the March 2022 financial
year relating to the Fellbach II acquisition which completed in
March 2021.
Looking forward, notwithstanding the ongoing potential impact of
Covid-19 and the conflict in Ukraine, the Company is confident that
through the continuation of its capex investment programmes and
wide range of other intensive asset management initiatives, it will
continue to grow FFO organically in the new financial year.
Furthermore, following the Company's financing activity detailed
within this report, the Company considers itself to have a strong
balance sheet and the financial capability to continue its
acquisitive strategy across the markets in which it operates as and
when the right opportunities present themselves.
BizSpace
The Company was pleased to complete the acquisition of BizSpace
in November 2021 for a cash consideration of approximately GBP245.0
million, based on an enterprise value of GBP380.0 million and
representing a 7.1% net operating yield. The Company funded the
transaction by stepping into the BizSpace existing financial debt
amounting to approximately GBP146.0 million, raising GBP137.0
million through a successful equity raise that resulted in 105
million shares being issued and utilising existing cash resources.
Following completion, the Company repaid the existing debt within
BizSpace using proceeds generated from its second corporate bond
issuance.
As a leading provider of regional flexible workspace across the
UK, BizSpace has provided Sirius with an opportunity to diversify
geographically at scale through the single acquisition of an
established platform. The transaction provides a number of organic
growth opportunities, overlaid with meaningful operational and
financial synergies which the Company continues to realise through
its ongoing integration efforts.
Within the 4.5 month period of ownership trading has been strong
with like-for-like annualised rent roll increasing by 7.6% from
GBP41.9 million to GBP45.1 million. Over the same period, occupancy
increased to 90.5% (excluding Ipswich which is unoccupied) from
88.7% whilst like-for-like average rate per sq ft has increased by
6.5% from GBP10.98 per sq ft to GBP11.69 per sq ft, highlighting
the opportunity to capture the strong growth seen in rental pricing
in the UK industrial property market. For further detail please see
the Asset management review - UK section on page 34 of this
report.
Sirius has also converted the UK business into a UK Real Estate
Investment Trust ("REIT") with effect from 1 April 2022, resulting
in BizSpace no longer being subject to UK corporation tax on income
from its property rental business, as well as on profits on
disposals of assets.
Portfolio valuation - Group
The portfolio of owned assets was independently valued at
EUR2,079.0 million by Cushman & Wakefield LLP at 31 March 2022
(31 March 2021: EUR1,350.8 million), which converts to a book value
of EUR2,100.0 million after the adjustments in relation to lease
incentives and inclusion of leased investment property. A breakdown
of the movement in owned and leased investment property, excluding
assets held for sale, is detailed in the table below.
German German
investment investment UK investment UK investment Investment
property property property property property
- owned - leased - owned - leased - total
EUR000 EUR000 EUR000 EUR000 EUR000
--------------------------------- ----------- ----------- ------------- ------------- ----------
Investment properties at
book value as at 31 March
2021* 1,347,167 15,025 - - 1,362,192
Acquisitions arising from
business combinations - - 408,923 12,182 421,105
Additions relating to owned
investment properties 162,844 - - - 162,844
Additions relating to leased
investment properties - 2,587 - 779 3,366
Capex investment and capitalised
broker fees 20,464 - 2,143 - 22,607
Reclassified as investment
property held for sale (13,739) - (13,739)
Disposal - - (1,808) - (1,808)
Surplus on revaluation above
capex investment and broker
fees 106,982 - 40,035 - 147,017
Deficit on revaluation relating
to leased investment properties - (5,548) - (24) (5,572)
Adjustment in respect of
lease incentives (561) - - - (561)
Currency effects - - 2,476 77 2,553
--------------------------------- ----------- ----------- ------------- ------------- ----------
Investment properties at
book value as at 31 March
2022* 1,623,157 12,064 451,769 13,014 2,100,004
--------------------------------- ----------- ----------- ------------- ------------- ----------
* Excluding assets held for sale.
The movement in owned investment property relating to the German
portfolio of EUR276.0 million was made up of EUR162.8 million of
asset acquisitions, EUR13.7 million of disposals, a EUR107.0
million valuation uplift, capital expenditure of EUR20.5 million
and a EUR0.6 million adjustment in respect of lease incentives.
The movement in owned investment property relating to the 4.5
month period of ownership of the UK portfolio of EUR42.8 million
was made up of a EUR1.8 million of disposals, a EUR2.5 million
foreign currency effect, a EUR40.0 million valuation uplift and
capital expenditure of EUR2.1 million.
In accordance with IFRS 16, the Group recognises leased
investment properties amounting to EUR12.1 million relating to the
German portfolio and EUR13.0 million relating to the UK portfolio
which meet the definition of investment property. Accordingly, an
expense of EUR5.6 million representing the fair value adjustment in
the year was recorded in the income statement. During the year
under review the Group extended a lease on an asset in Germany
meeting the definition of investment property resulting in an
increase in the carrying value of EUR2.6 million.
The total valuation gain recorded in the income statement of
EUR140.9 million includes movements relating to both owned and
leased investment property and is stated net of capex investment,
broker fees and adjustments in respect of lease incentives.
Portfolio valuation - Germany
Focusing on the like-for-like portfolio that was owned for the
full period, the book value of these assets increased by EUR127.2
million or 9.4% from EUR1,347.2 million to EUR1,474.4 million. The
increase in book value for the period was predominantly driven by
an increase in annualised rent roll of EUR6.2 million and
approximately 20 bps of gross yield compression. The assets that
were acquired during the year end were revalued at only EUR0.2
million below the total acquisition costs paid, which is 7.1% above
the property purchase prices paid.
The portfolio of owned properties comprised 69 assets at 31
March 2022 and the reconciliation of book value to the independent
Cushman & Wakefield LLP valuation is as follows:
31 March 31 March
2022 2021
EURm EURm
--------------------------------------------------- -------- --------
Investment properties at market value* 1,627.3 1,350.8
Adjustment in respect of lease incentives (4.1) (3.6)
--------------------------------------------------- -------- --------
Book value of investment properties as at 31 March
2022* 1,623.2 1,347.2
--------------------------------------------------- -------- --------
* Excluding assets held for sale.
The 31 March 2022 book value of owned investment properties of
EUR1,623.2 million represents an average gross yield of 6.9% (31
March 2021: 7.2%), which translates to a net yield of 6.2% (31
March 2021: 6.5%) and an EPRA net yield (including estimated
purchaser costs) of 5.9% (31 March 2021: 6.1%).
Despite yields continuing to tighten, the average gross yield of
the German portfolio of 6.9% still appears conservative when
compared to transactions that have completed over the last year in
the industrial, logistics and office sectors in Germany but also in
part reflects the work yet to be done in transforming more recently
acquired assets.
As a result of acquisitive growth, 67% of the German portfolio
represents value-add assets which, with average occupancy of 80.8%
and valued at a gross yield of 7.3%, provide significant
opportunity for further earnings and value growth. The mature
assets which make up about one-third of the German portfolio have
reached an occupancy level of 95.5% and, at a gross yield of 6.1%,
are valued at a yield that is 120 bps lower than the value-add
assets. As the transformation of the value-add assets continues,
the yield gap between the mature and value-add assets is expected
to reduce.
Capital Gross
Annualised value yield Net yield Vacant
rent roll Book value NOI EURm/sqm * * space Rate psqm Occupancy
EURm EURm EURm * % % sqm * EUR * % *
-------------- ---------- ---------- ----- --------- ------ --------- ------- --------- ---------
Value-add
assets** 79.9 1,089.6 69.6 804 7.3% 6.4% 252,430 6.27 80.8%
Mature assets 32.6 533.5 32.0 1,156 6.1% 6.0% 19,786 6.44 95.5%
Other - - (1.1) - - - - - -
-------------- ---------- ---------- ----- --------- ------ --------- ------- --------- ---------
Total 112.5 1,623.2 100.5 893 6.9% 6.2% 272,216 6.31 84.2%
-------------- ---------- ---------- ----- --------- ------ --------- ------- --------- ---------
* Expressed as averages.
** Excluding assets held for sale.
The average capital value per sqm of the entire portfolio of
EUR893 (31 March 2021: EUR863) remains well below replacement cost
and illustrates the excellent opportunity for further growth from
upgrading and letting up the sub-optimal vacant space through the
Company's capex investment programmes. This remains a major
competitive advantage for Sirius and is one of the main reasons
that its business model is able to produce higher returns with
lower risk than the typical operator of light industrial and office
business parks in Germany in all market conditions. The full
details of the capex investment programmes are provided in the
Asset management review - Germany section of this report.
Portfolio valuation - UK
Since the acquisition of BizSpace on 15 November 2021 the book
value of the UK portfolio has increased by GBP36.7 million or 10.6%
from GBP345.5 million to GBP382.2 million. Encouragingly, the
significant increase in book value was primarily driven by strong
annualised rent roll growth amounting to GBP3.2 million or 7.6% in
the 4.5 month period of ownership together with some yield
compression.
The 31 March 2022 book value of owned properties of GBP382.2
million represents an average gross yield of 11.8% (15 November
2021: 12.1%), which translates into a net yield of 8.0% (15
November 2021: 8.0%) and an EPRA net yield (including estimated
purchaser costs) of 7.5%. Despite yields continuing to tighten as a
result of increased demand and limited supply, the average gross
yield of the UK portfolio of 11.8% still appears conservative when
compared to transactions that have completed over the last year in
the light industrial, mixed-use and office sectors in the UK.
Capital
Annualised value Gross Vacant Occupancy
rent roll Book value NOI GBPm/sq yield Net yield space Rate psqft **
GBPm GBPm GBPm * ft % % sq ft GBP %
------------- ---------- ---------- ------- -------- ------ --------- ------- ---------- ---------
UK portfolio 45.1 382.2 30.5 88 11.8% 8.0% 406,132 11.69 90.5%
------------- ---------- ---------- ------- -------- ------ --------- ------- ---------- ---------
* Based on the 4.5 months from 15 November 2021 to 31 March 2022 annualised.
** Excluding the Ipswich asset, which is unoccupied.
As set out above, the average capital value per sq ft of the UK
portfolio remains well below replacement cost at GBP88 per sq ft
(15 November 2021: GBP79 per sq ft). Similarly, with 406,132 sq ft
of vacant space and an undemanding average rate of GBP11.69 per sq
ft significant opportunity exists for the UK operating platform to
increase rental and capital values further.
Net asset value
The valuation increases along with profit retention resulted in
an increase in net asset value per share to 102.04c at 31 March
2022, an uplift of 15.5% from 88.31c as at 31 March 2021.
Similarly, the adjusted net asset value1 per share increased to
108.51c at 31 March 2022, an uplift of 15.7% from 93.79c as at 31
March 2021. In addition, the Company paid out 4.02c per share of
dividends during the financial year which contributed to a total
shareholder accounting return (adjusted NAV growth plus dividends
paid) of 20.0% (31 March 2021: 19.5%). The movement in NAV per
share is explained in the following table:
Cents per
share
------------------------------------------- ---------
NAV per share as at 31 March 2021 88.31
Recurring profit after tax 6.10
Equity raise 5.26
Surplus on revaluation 12.55
Deferred tax charge (1.27)
Scrip and cash dividend paid (3.76)
Adjusting items (5.15)*
------------------------------------------- ---------
**NAV per share at 31 March 2022 102.04
------------------------------------------- ---------
Deferred tax and derivatives 6.47
------------------------------------------- ---------
Adjusted NAV per share at 31 March 2022(1) 108.51
------------------------------------------- ---------
EPRA adjustments(2) (1.23)
------------------------------------------- ---------
EPRA NTA per share at 31 March 2022(1) 107.28
------------------------------------------- ---------
* Adjusting items includes non-recurring items including
restructuring costs, share of profit in associates, gains and
losses on investments, and foreign currency effects.
(1) Excludes the provisions for deferred tax and derivative financial instruments.
(2) See Annex for further details.
The EPRA NTA per share, which, like adjusted NAV per share,
excludes the provisions for deferred tax and fair value of
derivative financial instruments but also includes the potential
impact of shares issued in relation to the Company's long-term
incentive programmes and excludes intangible assets, was 107.28c,
an increase of 16.2% from 92.29c as at 31 March 2021.
Financing
As communicated last year to shareholders the Company had been
assessing opportunities to optimise its funding structure to
support its future growth ambitions. The Company's inaugural bond
issuance in June 2021 followed the award of a BBB stable investment
grade credit rating from Fitch in May 2021. Bonds totalling
EUR400.0 million were issued attracting a coupon of 1.125% with a
maturity date of June 2026. In November 2021 the Company issued
bonds amounting to EUR300.0 million attracting a coupon of 1.75%
with a maturity date of November 2028.
The bond issuances coupled with the repayment of EUR340.2
million of existing secured debt, inclusive of EUR169.6 million
that the Company stepped into and subsequently repaid as part of
the BizSpace transaction, has transformed the Company's balance
sheet and provided it with several benefits including:
-- financial capacity to fund acquisitions and other investment opportunities;
-- reduction in the Group's weighted average cost of debt to 1.4% (31 March 2021: 1.5%);
-- increase in the Group's weighted average term of debt to 4.3
years (31 March 2021: 2.7 years); and
-- increase in the number of unencumbered assets to 127, with a book value of EUR1.6 billion.
Following the bond issuances and related secured debt
repayments, the Group holds total debt amounting to EUR995.6
million, of which EUR750.0 million (or 75%) is unsecured (31 March
2021: 11%). The transformation of the Group's financing
arrangements is expected to have a positive impact on earnings,
facilitate asset recycling and reduce annual amortisation
payments.
Net LTV, which excludes restricted cash balances, was 41.6% (31
March 2021: 31.4%) whilst interest cover at EBITDA level was 7.3x
as at 31 March 2022 (31 March 2021: 9.9x). All covenants were
complied with in full during the period. A summary of the movement
in the Group's debt is set out below:
Movement in debt
EUR000
-------------------------------- ---------
Total debt as at 31 March 2021 472,032
Bond issuances 700,000
Draw down of credit facility 50
Repayment of credit facility (50)
Repayment of secured facilities (170,709)
Assumed BizSpace debt 169,500
Repayment of BizSpace debt (169,500)
Scheduled amortisation (5,766)
-------------------------------- ---------
Total debt as at 31 March 2022 995,557
-------------------------------- ---------
Dividend
The Board has authorised a dividend in respect of the second
half of the financial year ended 31 March 2022 of 2.37c per share,
representing a pay-out of 65% of FFO and an increase of 19.7% on
the equivalent dividend last year which was also based on 65% of
FFO. The total dividend in respect of the financial year is 4.41c,
an increase of 16.1% on the 3.80c total dividend paid in respect of
the financial year ended 31 March 2021.
The table below shows the dividends paid and full year pay-out
ratios over the last five years, demonstrating the manner in which
the Board chose to increase the dividend pay-out ratio in previous
years in order to maintain positive dividend trajectory whilst the
proceeds of asset disposals were invested.
Second
First half half Blended
dividend dividend Total dividend pay-out
per share per share per share ratio
cents cents cents % of FFO
----------------------- ---------- ---------- -------------- ---------
Year ended March 2018 1.56 1.60 3.16 75%
Year ended March 2019 1.63 1.73 3.36 70%
Year ended March 2020* 1.77 1.80 3.57 66%
Year ended March 2021 1.82 1.98 3.80 65%
Year ended March 2022 2.04 2.37 4.41 65%
----------------------- ---------- ---------- -------------- ---------
* First half 67%, second half 65% of FFO.
It is expected that, for the dividend authorised in respect of
the six-month period ended 31 March 2022, the ex-dividend date will
be 6 July 2022 for shareholders on the South African register and 7
July 2022 for shareholders on the UK register. The last day to
trade is the day prior to the ex-dividend date, 5 July 2022 and 6
July 2022 for shareholders on the South African and UK register
respectively. It is further expected that for shareholders on both
registers the record date will be 8 July 2022 and the dividend will
be paid on 18 August 2022. A detailed dividend announcement will be
made on 20 June 2022, including details of a scrip dividend
alternative. At the date of the results announcement relating to
the year to 31 March 2022, the number of ordinary shares in issue
was 1,172,160,992.
Summary
Despite challenging market conditions, the year to 31 March 2022
proved transformational for Sirius as the Company recorded strong
trading results whilst growing acquisitively, issuing two corporate
bonds and entering the UK market. Whilst one off costs and the
write off of goodwill impacted earnings, the Group has delivered
significant increases in income and valuations while maintaining
high cash collection rates. Organic growth in annualised rent roll,
further improvements to service charge recovery and the impact of
the BizSpace acquisition were the primary drivers behind the
Group's increase in FFO and dividend. With ten assets acquired or
notarised in Germany in the year under review the Company expects a
greater impact from these assets on earnings in the new financial
year whilst the positive trading trajectory of BizSpace provides
further income growth opportunities, with considerable further
trading flexibility and tax benefits arising from the conversion of
BizSpace to a REIT.
The Company remains focused on maximising the capability of its
internal operating platforms to continue to deliver attractive
risk-adjusted returns through active asset management. Looking
forward the Company will take a well-balanced and measured approach
whilst trading through what continue to be uncertain times. Despite
positive developments over recent months, the recovery from the
Covid-19 pandemic continues to present challenges whilst the
economic, political and human fallout from the ongoing conflict in
Ukraine is yet to be fully understood. Growing concerns about
inflation, particularly that in relation to utilities and expected
interest rate increases, will no doubt create challenges; however,
following the successful bond issuances during the year under
review the Company's financial profile has never been stronger
whilst its internal operating platform has proven itself to be well
capable of adapting to changing market conditions. With acquisition
firepower available, further vacancy to develop and reversion
potential to capture, as well as a defensively positioned
portfolio, the Company is well set to meet the challenges ahead and
looks forward to continuing to deliver attractive and sustainable
returns for shareholders in the future.
Diarmuid Kelly
Chief Financial Officer
10 June 2022
DIRECTORS' RESPONSIBILITIES STATEMENT
The directors confirm that, to the best of their knowledge the
preliminary consolidated financial statements have been prepared in
accordance with international financial reporting standards, and
give a true and fair view of the assets, liabilities, financial
position and profit or loss of the Group and that this announcement
includes a fair summary of the development and performance of the
business and the position of the Group. After making enquiries, the
directors considered it appropriate to adopt the going concern
basis in preparing the financial statements. The names and
functions of the Company's directors are listed on the Company's
website.
Daniel Kitchen
Chairman
Principal Risks and Uncertainties
The principal risks and uncertainties faced by the Group are
included on pages 55 to 63 of the Group's Annual Report and
Accounts 2022 available on the website at:
www.sirius-real-estate.com
Consolidated income statement
for the year ended 31 March 2022
Year ended Year ended
31 March 31 March
2022 2021
Notes EUR000 EUR000
------------------------------------------------ ----- ---------- ----------
Revenue 6 210,182 165,361
Direct costs 7 (87,689) (71,541)
------------------------------------------------ ----- ---------- ----------
Net operating income 122,493 93,820
Gain on revaluation of investment properties 14 140,884 99,585
(Loss)/gain on disposal of properties (623) 54
Recoveries from prior disposals of subsidiaries 94 65
Administrative expenses 7 (40,718) (27,823)
Goodwill impairment 17 (40,906) -
Share of profit of associates 20 6,940 4,977
------------------------------------------------ ----- ---------- ----------
Operating profit 188,164 170,678
------------------------------------------------ ----- ---------- ----------
Finance income 10 2,986 2,712
Finance expense 10 (23,219) (9,869)
Change in fair value of derivative financial
instruments 10 996 136
------------------------------------------------ ----- ---------- ----------
Net finance costs (19,237) (7,021)
------------------------------------------------ ----- ---------- ----------
Profit before tax 168,927 163,657
Taxation 11 (20,935) (16,097)
------------------------------------------------ ----- ---------- ----------
Profit for the year after tax 147,992 147,560
------------------------------------------------ ----- ---------- ----------
Profit attributable to:
Owners of the Company 147,873 147,451
Non-controlling interest 119 109
------------------------------------------------ ----- ---------- ----------
147,992 147,560
------------------------------------------------ ----- ---------- ----------
Earnings per share
Basic earnings per share 12 13.48c 14.16c
Diluted earnings per share 12 13.29c 13.96c
------------------------------------------------ ----- ---------- ----------
All operations of the Group have been classified as
continuing.
Consolidated statement of comprehensive income
for the year ended 31 March 2022
Year ended Year ended
31 March 31 March
2022 2021
EUR000 EUR000
------------------------------------------------------------ ---------- ----------
Profit for the year after tax 147,992 147,560
------------------------------------------------------------ ---------- ----------
Other comprehensive loss that may be reclassified
to profit or loss in subsequent periods
Foreign currency translation reserve (1,701) -
------------------------------------------------------------ ---------- ----------
Other comprehensive loss after tax that may be reclassified
to profit or loss in subsequent periods (1,701) -
------------------------------------------------------------ ---------- ----------
Other comprehensive loss for the year after tax (1,701) -
------------------------------------------------------------ ---------- ----------
Total comprehensive income for the year after tax 146,291 147,560
------------------------------------------------------------ ---------- ----------
Total comprehensive income attributable to:
Owners of the Company 146,172 147,451
Non-controlling interest 119 109
------------------------------------------------------------ ---------- ----------
146,291 147,560
------------------------------------------------------------ ---------- ----------
Consolidated statement of financial position
as at 31 March 2022
31 March 31 March
2022 2021
Notes EUR000 EUR000
------------------------------------------- ----- ----------- ---------
Non-current assets
Investment properties 14 2,100,004 1,362,192
Plant and equipment 16 5,492 2,682
Intangible assets 17 4,283 6,568
Right of use assets 18 14,996 1,919
Other non-current financial assets 19 48,330 44,960
Investment in associates 20 24,142 17,202
------------------------------------------- ----- ----------- ---------
Total non-current assets 2,197,247 1,435,523
------------------------------------------- ----- ----------- ---------
Current assets
Trade and other receivables 21 24,571 18,731
Derivative financial instruments 329 70
Cash and cash equivalents 22 150,966 65,674
------------------------------------------- ----- ----------- ---------
Total current assets 175,866 84,475
------------------------------------------- ----- ----------- ---------
Assets held for sale 15 13,750 -
------------------------------------------- ----- ----------- ---------
Total assets 2,386,863 1,519,998
------------------------------------------- ----- ----------- ---------
Current liabilities
Trade and other payables 23 (89,335) (50,527)
Interest-bearing loans and borrowings 24 (19,630) (9,114)
Lease liabilities 18 (1,090) (5,857)
Current tax liabilities 11 (10,423) (2,063)
Derivative financial instruments - (414)
------------------------------------------- ----- ----------- ---------
Total current liabilities (120,478) (67,975)
------------------------------------------- ----- ----------- ---------
Non-current liabilities
Interest-bearing loans and borrowings 24 (961,863) (458,940)
Lease liabilities 18 (37,571) (9,130)
Derivative financial instruments - (797)
Deferred tax liabilities 11 (75,893) (56,331)
------------------------------------------- ----- ----------- ---------
Total non-current liabilities (1,075,327) (525,198)
------------------------------------------- ----- ----------- ---------
Total liabilities (1,195,805) (593,173)
------------------------------------------- ----- ----------- ---------
Net assets 1,191,058 926,825
------------------------------------------- ----- ----------- ---------
Equity
Issued share capital 27 - -
Other distributable reserve 28 570,369 449,051
Own shares held 27 (6,274) (2,903)
Foreign currency translation reserve (1,701) -
Retained earnings 628,258 480,385
------------------------------------------- ----- ----------- ---------
Total equity attributable to the owners of
the Company 1,190,652 926,533
------------------------------------------- ----- ----------- ---------
Non-controlling interest 406 292
------------------------------------------- ----- ----------- ---------
Total equity 1,191,058 926,825
------------------------------------------- ----- ----------- ---------
The financial statements on pages 127 to 130 were approved by
the Board of Directors on 10 June 2022 and were signed on its
behalf by:
Daniel Kitchen
Chairman
Company number: 46442
Consolidated statement of changes in equity
for the year ended 31 March 2022
Total
equity
attributable
Foreign to the
Issued Other Own currency owners Non-
share distributable shares translation Retained of controlling Total
capital reserve held reserve earnings the Company interest equity
Notes EUR000 EUR000 EUR000 EUR000 EUR000 EUR000 EUR000 EUR000
-------------- ----- --------- ------------- ------- ----------- --------- ------------ ----------- ---------
As at 31 March
2020 - 470,151 (1,515) - 332,934 801,570 246 801,816
Profit for the
year - - - - 147,451 147,451 109 147,560
Other
comprehensive
income for the
year - - - - - - - -
-------------- ----- --------- ------------- ------- ----------- --------- ------------ ----------- ---------
Total
comprehensive
income for
the
year - - - - 147,451 147,451 109 147,560
Share-based
payment
transactions - 3,148 - - - 3,148 - 3,148
Own shares
purchased 27 - - (1,613) - - (1,613) - (1,613)
Own shares
allocated 27 - - 225 - - 225 - 225
Dividends paid 29 13,169 (37,417) - - - (24,248) (63) (24,311)
Transfer of
share
capital 29 (13,169) 13,169 - - - - - -
-------------- ----- --------- ------------- ------- ----------- --------- ------------ ----------- ---------
As at 31 March
2021 - 449,051 (2,903) - 480,385 926,533 292 926,825
Profit for the
year - - - - 147,873 147,873 119 147,992
Other
comprehensive
income for
the
year - - - (1,701) - (1,701) - (1,701)
-------------- ----- --------- ------------- ------- ----------- --------- ------------ ----------- ---------
Total
comprehensive
income for
the
year - - - (1,701) 147,873 146,172 119 146,291
Shares issued 27 159,926 - - - - 159,926 - 159,926
Transaction
cost
relating to
share
issues 27 (6,219) - - - - (6,219) - (6,219)
Dividends paid 29 13,673 (44,488) - - - (30,815) (5) (30,820)
Transfer of
share
capital 29 (167,380) 167,380 - - - - - -
Share-based
payment
transactions 9 - 1,945 - - - 1,945 - 1,945
Value of
shares
withheld to
settle
employee tax
obligations 9 - (3,519) - - - (3,519) - (3,519)
Own shares
purchased 27 - - (5,545) - - (5,545) - (5,545)
Own shares
allocated 27 - - 2,174 - - 2,174 - 2,174
As at 31 March
2022 - 570,369 (6,274) (1,701) 628,258 1,190,652 406 1,191,058
-------------- ----- --------- ------------- ------- ----------- --------- ------------ ----------- ---------
Consolidated statement of cash flows
for the year ended 31 March 2022
Year ended Year ended
31 March 31 March
2022 2021
Notes EUR000 EUR000
-------------------------------------------------- ------ ---------- ----------
Operating activities
Profit for the year after tax 147,992 147,560
Taxation 11 20,935 16,097
-------------------------------------------------- ------ ---------- ----------
Profit for the year before tax 168,927 163,657
-------------------------------------------------- ------ ---------- ----------
Loss/(gain) on disposal of properties 623 (54)
Recoveries from prior disposals of subsidiaries (94) (65)
Net exchange differences (1,975) -
Share-based payments 9 4,173 3,148
Gain on revaluation of investment properties 14 (140,884) (99,585)
Change in fair value of derivative financial
instruments 10 (996) (136)
Depreciation of property, plant and equipment 16 1,167 669
Amortisation of intangible assets 17 1,164 897
Depreciation of right of use assets 18 843 521
Goodwill impairment 17 40,906 -
Share of profit of associates 20 (6,940) (4,977)
Finance income 10 (2,986) (2,712)
Finance expense 10 23,219 9,869
Changes in working capital
Increase in trade and other receivables (5,196) (2,518)
Increase in trade and other payables 3,470 2,913
Taxation paid (3,671) (632)
-------------------------------------------------- ------ ---------- ----------
Cash flows from operating activities 81,750 70,995
-------------------------------------------------- ------ ---------- ----------
Investing activities
Purchase of investment properties (162,844) (35,484)
Prepayments relating to new acquisitions (1,860) -
Proceeds from loss on control of subsidiaries
(net of cash disposed) 94 65
Capital expenditure on investment properties (23,786) (31,104)
Purchase of plant and equipment and intangible
assets (3,540) (2,718)
Acquisition of a subsidiary (net of cash
acquired) (254,730) -
Proceeds on disposal of properties (including
held for sale) 14, 15 15,297 30
Increase in loans receivable due from associates (1,124) (5,950)
Interest received 2,986 1,627
-------------------------------------------------- ------ ---------- ----------
Cash flows used in investing activities (429,507) (73,534)
-------------------------------------------------- ------ ---------- ----------
Financing activities
Proceeds from issue of share capital 27 159,926 -
Transaction costs on issue of shares 27 (6,219) -
Shares purchased (5,545) (1,613)
Payment relating to exercise of share options 9 (3,519) -
Dividends paid to owners of the Company 29 (30,815) (24,248)
Dividends paid to non-controlling interest (5) (63)
Proceeds from loans 750,000 20,000
Repayment of loans (399,431) (33,753)
Payment of principal portion of lease liabilities (5,871) (5,681)
Exit fees/prepayment of financing penalties (5,335) -
Capitalised loan issue cost (14,369) (134)
Finance charges paid (7,067) (7,558)
-------------------------------------------------- ------ ---------- ----------
Cash flows from/(used in) financing activities 431,750 (53,050)
-------------------------------------------------- ------ ---------- ----------
Increase/(decrease) in cash and cash equivalents 83,993 (55,589)
Net exchange difference 1,299 -
Cash and cash equivalents as at the beginning
of the year 65,674 121,263
-------------------------------------------------- ------ ---------- ----------
Cash and cash equivalents as at the year
end 22 150,966 65,674
-------------------------------------------------- ------ ---------- ----------
Notes to the financial statements
for the year ended 31 March 2022
1. General information
Sirius Real Estate Limited (the "Company" or "Sirius") is a
company incorporated in Guernsey and resident in the United Kingdom
for tax purposes, whose shares are publicly traded on the Main
Market of the London Stock Exchange ("LSE") (primary listing) and
the Main Board of the Johannesburg Stock Exchange ("JSE") (primary
listing).
The consolidated financial information of the Company comprises
that of the Company and its subsidiaries (together referred to as
the "Group") for the year ended 31 March 2022.
The principal activity of the Group is the investment in, and
development of, commercial property to provide conventional and
flexible workspace in Germany and the United Kingdom ("UK").
2. Significant accounting policies
(a) Basis of preparation
The consolidated financial statements have been prepared on a
historical cost basis, except for investment properties, investment
properties held for sale and derivative financial instruments,
which have been measured at fair value. The consolidated financial
information is presented in euros and all values are rounded to the
nearest thousand (EUR000), except where otherwise indicated.
The Company has chosen to prepare its annual consolidated
financial statements in accordance with International Financial
Reporting Standards as issued by the IASB ("IFRS") as a result of
the primary listing on the JSE. See also note 2(c) for statement of
compliance.
As at 31 March 2022 the Group's consolidated financial
statements reflect consistent accounting policies and methods of
computation as used in the previous financial year, except for the
changes in the application of accounting policies as described in
note 2(b), in accordance with IFRS.
(b) Changes in accounting policies
There were several new and amendments to standards and
interpretations which are applicable for the first time for the
Group from 1 April 2021. None of them have had a significant impact
on the Group or Company's income statement or balance sheet. In May
2021, the IASB published amendments to IAS 12 "Income Taxes". The
IASB issued "Deferred Tax related to Assets and Liabilities arising
from a Single Transaction". The amendments narrowed the scope of
the recognition exemption in paragraphs 15 and 24 of IAS 12
(recognition exemption) so that it no longer applies to
transactions that, on initial recognition, give rise to equal
taxable and deductible temporary differences. The amendments are
effective for annual reporting periods beginning on or after 1
January 2023. As earlier application is permitted the Group has
adopted the amendments early as described in note 11.
The Group has not early adopted any other standard,
interpretation or amendment that has been issued but is not yet
effective. See note 2(ab).
(c) Statement of compliance
The consolidated financial statements have been prepared in
accordance with the Disclosure and Transparency Rules of the United
Kingdom Financial Conduct Authority, the SAICA Financial Reporting
Guides as issued by the Accounting Practices Committee, Financial
Reporting Pronouncements as issued by the Financial Reporting
Standards Council, the listing requirements of the JSE Limited,
IFRS and Companies (Guernsey) Law, 2008. The consolidated financial
statements have been prepared on the same basis as the accounting
policies set out in the Group's annual financial statements for the
year ended 31 March 2021, except for the changes in accounting
policies as shown in note 2(b). All forward-looking information is
the responsibility of the Board of Directors and has not been
reviewed or reported on by the Group's auditors.
(d) Going concern
The Group has prepared its going concern assessment for the
period to the end of June 2023 (the "going concern period"). The
Group's going concern assessment is based on a forecast of the
Group's future cash flows. This considers management's base case
scenario and a severe but plausible scenario where sensitivities
are applied to model the outcome on the occurrence of downside
assumptions explained below. It considers the Group's principal
risks and uncertainties and is dependent on a number of factors
including financial performance, continued access to lending
facilities (see note 24) and the ability to continue to operate the
Group's secured and unsecured debt structure within its financial
covenants.
The severe but plausible scenario models a potential downturn in
the Group's performance, including the potential impact of downside
macro-factors such as the Ukrainian crisis and new Covid-19
variants, on the Group's financial position and future prospects.
The cash flow projections incorporate assumptions on future trading
performance and potential valuation movements in order to estimate
the level of headroom on facilities and covenants for loan to
value, debt service cover and occupancy ratios set out within the
relevant finance agreements.
The impact of the crisis in Ukraine and Covid-19 on the business
in the year to 31 March 2022 did not result in any deterioration in
the Group's income streams or falls in asset values, both of which
increased in the period.
The base case and severe but plausible downside scenarios
include the following assumptions:
Base case:
-- growth in rent roll at 31 March 2022, principally from
contractual increases in rents and organic growth through lease
renewals;
-- increasing cost levels in line with forecast inflation of 7%;
-- continuation of forecast capex investment;
-- continuation of forecast dividend payments;
-- payment of loan interest and loan amortisation amounts and
assumed refinancing of the EUR15 million of the Schuldschein
facility in December 2022 and January 2023; and
-- no acquisitions over and above those legally committed to.
Severe but plausible downside scenario:
-- reduction in occupancy of 5% per annum from the 31 March 2022 rent roll;
-- reduction in service charge recovery of 5% per annum from the
31 March 2022 recovery levels; and
-- reduction in property valuations of 5% per annum.
In the severe but plausible downside scenario, the Group is
expected to comply with its loan covenants with no cure payments or
breaches forecast, continue to operate within the terms of its
facilities and have sufficient cash reserves.
The Directors also evaluated potential events and conditions
beyond 30 June 2023 that may cast significant doubt on the Group's
ability to continue as a going concern, specifically, the ability
of the Group to refinance or extend the EUR20 million Schuldschein
facility in July 2023, EUR172 million Berlin Hyp AG loan in October
2023 and EUR58 million Deutsche Pfandbriefbank AG loan in December
2023. The Directors are of the view that they have a realistic
prospect of securing this refinancing or an alternative source of
secured or unsecured funding, a judgement which was informed by the
Group's financial forecasts, the Group's track-record in previously
refinancing maturing debt (including the recent EUR300 million
corporate bond issuance in November 2021) and the period of time
the Group has to arrange refinancing. Should the debt facilities
falling due in July 2023, October 2023 and December 2023 not be
refinanced or extended, alternative options could be considered,
including the use of mitigating factors referred to below. The
mitigating factors are within the control of the Directors and
there is sufficient time for such mitigating factors to be
implemented, if required.
In each of the scenarios considered for going concern, the Group
is not dependent on any mitigating actions which would be available
to the Group in the going concern review period to June 2023, which
include restricting dividends, reducing capital expenditure or the
disposal of unencumbered assets that have a book value of EUR1.6
billion as at 31 March 2022.
The Directors have not identified any material uncertainties
which may cast significant doubt on the Group's ability to continue
as a going concern for the duration of the going concern period.
After due consideration, the Board believes it is appropriate to
adopt the going concern basis in preparing the financial
statements.
(e) Basis of consolidation
The consolidated financial information comprises the financial
information of the Group as at 31 March 2022. The financial
information of the subsidiaries is prepared for the same reporting
period as the Company, using consistent accounting policies.
All intra-group balances and transactions and any unrealised
income and expenses arising from intra-group transactions are
eliminated in preparing the consolidated financial statements.
Subsidiaries are fully consolidated from the date of
acquisition, being the date on which the Group obtains control, and
continue to be consolidated until the date that such control
ceases.
Non-controlling interests represent the portion of profit or
loss and net assets not held by the Group and are presented
separately in the consolidated income statement and the
consolidated statement of comprehensive income and within equity in
the consolidated statement of financial position, separately from
the Company's shareholders' equity.
(f) Acquisitions
Where a property is acquired through the acquisition of
corporate interests, management considers the substance of the
assets and activities of the acquired entity in determining whether
the acquisition represents the acquisition of a business.
The Group accounts for an acquisition as a business combination
where an integrated set of activities is acquired in addition to
the property (see policy in note 2(aa)). More specifically,
consideration is made of the extent to which substantive processes
are acquired and, in particular, the extent of services provided by
the subsidiary. IFRS 3 "Business Combinations" sets out an optional
concentration test designed to simplify the evaluation of whether
an acquired set of activities and assets is not a business. An
acquired set of activities and assets is not a business if
substantially all of the fair value of the gross assets acquired is
concentrated in a single identifiable asset or group of similar
identifiable assets.
Where such acquisitions are not deemed to be an acquisition of a
business, they are not treated as business combinations. Instead,
they are treated as asset acquisitions, with the cost to acquire
the corporate entity being allocated between the identifiable
assets and liabilities of the entity based on their relative fair
values on the acquisition date. Accordingly, no goodwill
arises.
(g) Foreign currency translation
The consolidated financial information is presented in euros,
which is the functional and presentational currency of the parent
company. For each entity, the Group determines the functional
currency and items included in the financial statements of each
entity are measured using the functional currency.
Transactions in foreign currencies are initially recorded in the
functional currency at the exchange rate ruling at the date of the
transaction. Monetary assets and liabilities denominated in foreign
currencies are retranslated into the functional currency at the
exchange rate ruling at the statement of financial position date.
All differences are taken to the statement of profit and loss.
Non-monetary items that are measured in terms of historical cost in
a foreign currency are translated using the exchange rates at the
dates of the initial transactions. Non-monetary items measured at
fair value in a foreign currency are translated using the exchange
rates at the date when the fair value is determined. The gain or
loss arising on translation of non-monetary items measured at fair
value is treated in line with the recognition of the gain or loss
on the change in fair value of the item (i.e., translation
differences on items whose fair value gain or loss is recognised in
other comprehensive income ("OCI") or profit or loss are also
recognised in OCI or profit or loss, respectively).
On consolidation, the assets and liabilities of foreign
operations are translated into euros at the rate of exchange
prevailing at the reporting date and their statements of profit or
loss are translated at the exchange rates at the dates of the
transactions, or where appropriate, the average exchange rates for
the period. The foreign exchange differences arising on translation
for consolidation are recognised in other comprehensive income
("OCI"). On disposal of a foreign operation, the component of OCI
relating to that particular foreign operation is reclassified to
profit or loss.
Any goodwill arising on the acquisition of a foreign operation
and any fair value adjustments to the carrying amounts of assets
and liabilities arising on the acquisition are treated as assets
and liabilities of the foreign operation and translated at the spot
rate of exchange at the reporting date.
(h) Revenue recognition
Rental income
Rental income from operating leases and licence agreements
containing leases is recognised on a straight-line basis over the
term of the relevant lease unless another systematic basis is more
representative of the time pattern in which the benefit derived
from the leased asset is diminished. Fixed or determinable rental
increases, which can take the form of actual amounts or agreed
percentages, are recognised on a straight-line basis over the term
of material leases. If the increases are related to a price index
to cover inflationary cost increases, then the policy is not to
spread the amount but to recognise them when the increase takes
place.
The value of rent free periods and all similar lease incentives
is spread on a straight-line basis over the term of material leases
only. Where there is a reasonable expectation that the tenant will
exercise break options, the value of rent free periods and all
similar lease incentives is booked up to the break date.
Revenue from contracts with customers
Revenue from contracts with customers is recognised when control
of the goods or services is transferred to the customer at an
amount that reflects the consideration to which the Group expects
to be entitled in exchange for those goods or services.
The Group mainly generates revenue from contracts with customers
for services rendered to tenants including management charges and
other expenses recoverable from tenants based on the Group's right
to recharge tenants for costs incurred (with or without markup) on
a day-to-day basis ("service charge income"). These services are
specified in the lease agreements and separately invoiced. Service
charge income is recognised as revenue when the performance
obligations of the services specified in the lease agreements are
met.
The individual activities vary significantly throughout the day
and from day to day; however, the nature of the overall promise of
providing property management service remains the same each day.
Accordingly, the service performed each day is distinct and
substantially the same. These services represent a series of daily
services that are individually satisfied over time because the
tenants simultaneously receive and consume the benefits provided by
the Group. The actual service provided during each reporting period
is determined using cost incurred as the input method.
Transaction prices are regularly updated and are estimated at
the beginning of each year based on previous costs and estimated
spend. Service charge budgets are prepared carefully to make sure
that they are realistic and reasonable. Variable consideration is
only included in the transaction price to the extent it is highly
probable that a significant reversal in the amount of cumulative
revenue recognised will not occur. Performance obligations related
to service charge revenue is discharged by the Company continuously
and on a daily basis, through the provision of utilities and other
services to tenants. Changes in service charge revenue are linked
to changes in the cost of fulfilling the obligation or the value to
a tenant at a given period of time. Accordingly, the variable
consideration is allocated to each distinct period of service (i.e.
each day) as it meets the variable consideration allocation
exception criteria.
Service charge expenses are based on actual costs incurred and
invoiced together with an estimate of costs to be invoiced in
future periods as receipt of final invoices from suppliers can take
up to twelve months after the end of the financial period. The
estimates are based on expected consumption rates and historical
trends and take into account market conditions at the time of
recording.
Service charge income is based on service charge expense and
takes into account recovery rates which are largely derived from
estimated occupancy levels. Service charge costs related to vacant
space are irrecoverable.
The Group acts as a principal in relation to these services, and
records revenue on a gross basis, as it controls the specified
goods or services before transferring them to tenants.
Where amounts invoiced to tenants are greater than the revenue
recognised at the period end date, the difference is recognised as
unearned revenue when the Group has unconditional right to
consideration, even if the payments are non-refundable. Where
amounts invoiced are less than the revenue recognised at the period
end date, the difference is recognised as contract assets or, when
the Group has a present right to payment, as receivables albeit
unbilled.
Rental income, fee income and other income from managed
properties
As the Group derives income and incurs expenses relating to
properties it manages but does not own, such income and expense is
disclosed separately within revenue and direct costs. Income
relating to managed properties is accounted for according to
revenue recognition accounting policies set out above.
Allocation of revenues earned through all-inclusive lease and
licence arrangements
The Group has entered into leases and licensing arrangements
(which contain a lease) where the revenue due from the tenant is an
all-inclusive price, representing lease income (recognised in
accordance with IFRS 16) and service charge income (recognised in
accordance with IFRS 15). Management have estimated the allocation
of the revenues using the relevant service charge costs incurred
and the occupancy of the properties where all-inclusive lease and
license arrangements are in place. The allocation resulted in
EUR5.7 million being recorded as service charge income.
Interest income
Interest income is recognised as it accrues (using the effective
interest method, which is the rate that exactly discounts estimated
future cash receipts through the expected life of the financial
instrument).
(i) Leases
Group as lessor
Leases where the Group does not transfer substantially all the
risks and benefits of ownership of the asset are classified as
operating leases.
Group as lessee
All contracts that give the Group the right to control the use
of an identified asset over a certain period of time in return for
consideration are considered leases within the meaning of IFRS 16
"Leases" ("IFRS 16").
For all contracts that meet the definition of leases according
to IFRS 16, the Group, at the commencement date of the lease (i.e.
the date the underlying asset is available for use), recognises
lease liabilities equal to the present value of the future lease
payments, discounted to reflect the term-specific incremental
borrowing rate if the interest rate implicit in the lease is not
readily determinable. Lease liabilities are subsequently increased
by the periodic interest expenses and reduced by the lease payments
made during the financial year.
Correspondingly, right of use assets are initially recognised at
cost under IFRS 16 which is the amount of the lease liabilities
(plus any advance payments that have already been made or any
initial direct costs). Subsequently, the right of use assets are
generally measured at cost, taking depreciation (calculated
straight line over the lease term) and impairments into account and
are presented separately in the statement of financial position
except for right of use assets that meet the definition of IAS 40
"Investment Property" ("IAS 40") which are presented as investment
property and subsequently measured at fair value in line with the
measurement rules set out in IAS 40.
Periods resulting from extension or termination options granted
on a unilateral basis are assessed on a case-by-case basis and are
only taken into account if their use is sufficiently probable.
The Group utilises the recognition exemptions provided by IFRS
16 and does not apply IFRS 16 to leases with a contractual term of
twelve months or less or to leases in which the underlying asset is
of low value (on a case-by-case basis).
Lease payments associated with short-term leases and with leases
of low-value assets are recognised as expenses on a straight-line
basis over the lease term.
Right-of-use assets relating to office spaces are depreciated on
a straight-line basis over the shorter of the lease term and the
estimated useful lives of the assets.
(j) Income tax
Current income tax
Current income tax assets and liabilities are measured at the
reporting date at the amount expected to be recovered from or paid
to the taxation authorities. The tax rates and tax laws used to
compute the amount are those that are enacted or substantively
enacted by the reporting date.
Certain subsidiaries may be subject to foreign taxes in respect
of foreign sources of income. Sirius Real Estate Limited is a UK
resident for tax purposes.
Deferred income tax
Deferred income tax is recognised on all temporary differences
arising between the tax bases of assets and liabilities and their
carrying amounts in the consolidated financial statements, with the
following exceptions:
-- where the temporary difference arises from the initial
recognition of goodwill or of an asset or liability in a
transaction that is not a business combination that at the time of
the transaction affects neither accounting nor taxable profit or
loss;
-- in respect of taxable temporary differences associated with
investments in subsidiaries, where the timing of the reversal of
the temporary differences can be controlled and it is probable that
the temporary differences will not reverse in the foreseeable
future; and
-- deferred tax assets are only recognised to the extent that it
is probable that taxable profit will be available against which the
deductible temporary differences, carried forward tax credits or
tax losses can be utilised.
Deferred income tax assets and liabilities are measured on an
undiscounted basis at the tax rates that are expected to apply in
the year when the related asset is realised or the liability is
settled, based on tax rates (and tax laws) that have been enacted
or substantively enacted at the reporting date.
The Group has converted the UK business into a UK Real Estate
Investment Trust ("REIT") with effect from 1 April 2022, with all
relevant steps for the REIT conversion taken prior to the
accounting period end date of 31 March 2022, resulting in the Group
no longer being subject to UK corporation tax on income from its
property rental business, as well as on profits on disposals of
assets. Accordingly, the Group reflected the impact of the
conversion into a UK REIT as at 31 March 2022 and all deferred tax
balances in relation to the change in fair value of investment
property, lease liabilities and right of use assets according to
IFRS 16, losses and other short term related deferred tax assets
have been released as at 31 March 2022.
(k) Sales tax
Revenues, expenses and assets are recognised net of the amount
of sales tax except:
-- where the sales tax incurred on a purchase of assets or
services is not recoverable from the taxation authority, in which
case the sales tax is recognised as part of the cost of acquisition
of the asset or as part of the expense item as applicable; and
-- receivables and payables that are stated with the amount of sales tax included.
The net amount of sales tax recoverable from, or payable to, the
taxation authority is included as part of receivables or payables
in the statement of financial position.
(l) Investment properties
Investment properties are properties that are either owned by
the Group or held under a lease which are held for long-term rental
income and/or capital appreciation.
Investment properties owned by the Group are initially
recognised at cost, including transaction costs when the control of
the property is transferred. Where recognition criteria are met,
the carrying amount includes subsequent costs to add to or replace
part of an investment property. Subsequent to initial recognition,
investment properties are stated at fair value, which reflects
market conditions at the reporting date. Gains or losses arising
from changes in the fair values of investment properties are
included in the income statement in the period in which they
arise.
The fair value of the Group's owned investment properties at 31
March 2022 is based on a valuation carried out at that date by
Cushman & Wakefield LLP (2021: Cushman & Wakefield LLP), an
independent valuer, on the basis of highest and best use. The
valuation is in accordance with standards complying with the Royal
Institute of Chartered Surveyors' ("RICS's") approval and the
conceptual framework that has been set by the International
Valuation Standards Committee.
The Cushman & Wakefield LLP valuation is based upon
assumptions including those relating to current rental rates,
market rental rates, occupancy, gross initial yields, discount
factors and void periods. The German properties are valued on the
basis of a ten to fourteen year discounted cash flow model
supported by comparable evidence. The discounted cash flow
calculation is a valuation of rental income considering
non-recoverable costs and applying a discount rate for the current
income risk over a ten to fourteen year period. After ten to
fourteen years, a determining residual value (exit scenario) is
calculated, discounted to present value. The UK properties are
valued on a traditional basis, where the income being generated is
capitalised by an appropriate yield. Yields are based on comparable
evidence of similar quality assets which have traded in the open
market. The yield applied reflects the age, location, ownership,
customer base and agreement type.
Investment properties relating to leased assets are recognised
in accordance with IFRS 16 (see policy in note 2(i)). Subsequent to
initial recognition, investment properties relating to leased
assets are stated at fair value, which reflects market conditions
at the reporting date. Gains or losses arising from changes in the
fair values of investment properties are included in the income
statement in the period in which they arise.
The fair value of investment properties relating to leased
assets at 31 March 2022 has been arrived at on the basis of a
valuation carried out at that date by management. The valuation is
based upon assumptions including future rental income and
expenditure in accordance with the conditions of the related lease
agreements. The properties are valued on the basis of a discounted
cash flow model with the measurement period equal to the term of
the lease agreements.
(m) Disposals of investment property
Investment property disposals are recognised when control of the
property transfers to the buyer, which typically occurs on the date
of completion. Profit or loss arising on disposal of investment
properties is calculated by reference to the most recent carrying
value of the asset adjusted for subsequent capital expenditure.
(n) Assets held for sale and disposal groups
(i) Investment properties held for sale
Investment properties held for sale are separately disclosed at
the asset's fair value. In order for an investment property held
for sale to be recognised, the following conditions must be
met:
-- the asset must be available for immediate sale in its present condition and location;
-- the asset is being actively marketed;
-- the asset's sale is expected to be completed within twelve
months of classification as held for sale;
-- there must be no expectation that the plan for selling the
asset will be withdrawn or changed significantly; and
-- the successful sale of the asset must be highly probable.
(ii) Disposal groups
The Group classifies non-current assets and disposal groups as
held for sale if their carrying amounts will be recovered
principally through a sale transaction rather than through
continuing use. Non-current assets and disposal groups classified
as held for sale are measured at the lower of their carrying amount
and fair value less costs to sell. Costs to sell are the
incremental costs directly attributable to the disposal of a
disposal group, excluding finance costs and income tax expense.
The criteria for held-for-sale classification is regarded as met
only when the sale is highly probable and the disposal group is
available for immediate sale in its present condition. Actions
required to complete the sale should indicate that it is unlikely
that significant changes to the sale will be made or that the
decision to sell will be withdrawn. Management must be committed to
the plan to sell the asset with the sale expected to be completed
within one year from the date of the classification.
Property, plant and equipment and intangible assets are not
depreciated or amortised once classified as held for sale.
Assets and liabilities classified as held for sale are presented
separately in the statement of financial position.
Additional disclosures are provided in note 15.
(o) Plant and equipment
Recognition and measurement
Items of plant and equipment are stated at cost less accumulated
depreciation and impairment losses.
Depreciation
Where parts of an item of plant and equipment have different
useful lives, they are accounted for as separate items of plant and
equipment.
Depreciation is charged in the income statement on a
straight-line basis over the estimated useful lives of each part of
an item of the fixed assets. The estimated useful lives are as
follows:
Plant and equipment three to ten years
Fixtures and fittings three to fifteen years
Depreciation methods, useful lives and residual values are
reviewed at each reporting date.
(p) Intangible assets
The Group recognises only acquired intangible assets. These
intangibles are valued at cost.
Intangible assets acquired separately are measured on initial
recognition at cost. Following initial recognition, intangible
assets are carried at cost less any accumulated amortisation and
accumulated impairment losses. Intangible assets with a definite
useful life are amortised on a straight-line basis over their
respective useful lives. Their useful lives are between three and
five years. Any amortisation of these assets is recognised as such
under administrative expenses in the consolidated income
statement.
Intangible assets with an indefinite useful life, including
goodwill, are not amortised.
Goodwill arising on consolidation represents the excess of the
cost of the purchase consideration over the Group's interest in the
fair value of the identifiable assets and liabilities of a
subsidiary at the date of acquisition.
Goodwill is initially recognised at cost and is subsequently
measured at cost less any accumulated impairment losses. Goodwill
is tested annually for impairment, or more frequently when there is
an indication that the business to which the goodwill applies may
be impaired.
(q) Trade and other receivables
Rent and service charge receivables and any contract assets do
not contain significant financing components and are measured at
the transaction price. Other receivables are initially measured at
fair value plus transaction costs. Subsequently, trade and other
receivables are measured at amortised cost and are subject to
impairment (see note 2(y)). The Group applies the simplified
impairment model of IFRS 9 in order to determine expected credit
losses in trade and other receivables, including lease
incentives.
The Group assesses on a forward-looking basis the expected
credit losses associated with its trade and other receivables. A
provision for impairment is made for the lifetime expected credit
losses on initial recognition of the receivable. If collection is
expected in more than one year, the balance is presented within
non-current assets.
(r) Treasury Shares and shares issued to the Employee Benefit
Trust
Own equity instruments are deducted from equity. No gain or loss
is recognised in the income statement on the purchase, sale, issue
or cancellation of the Group's equity instruments.
(s) Share-based payments
The grant date fair value of share-based payment awards granted
to employees is recognised as an employee expense, with a
corresponding increase in equity, over the period that the
employees unconditionally become entitled to the awards.
The amount recognised as an expense is adjusted to reflect the
number of awards for which the related service and non-market
vesting conditions are expected to be met, such that the amount
ultimately recognised as an expense is based on the number of
awards that meet the related service and non-market performance
conditions at the vesting date.
(t) Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand,
demand deposits and other short-term, highly liquid investments
with original maturities of three months or less that are readily
convertible to a known amount of cash and are subject to an
insignificant risk of change in value.
(u) Bank borrowings
Interest-bearing bank loans and borrowings are initially
recorded at fair value net of directly attributable transaction
costs.
Subsequent to initial recognition, interest-bearing loans and
borrowings are measured at amortised cost using the effective
interest rate method.
When debt refinancing exercises are carried out, existing
liabilities will be treated as being extinguished when the new
liability is substantially different from the existing liability.
In making this assessment, the Group will consider the transaction
as a whole, taking into account both qualitative and quantitative
characteristics in order to make the assessment.
(v) Trade payables
Trade payables are initially measured at fair value and are
subsequently measured at amortised cost, using the effective
interest rate method.
(w) Equity instruments
Equity instruments issued by the Company are recorded at the
proceeds received, net of direct issue costs.
(x) Dividends
Interim dividend distributions to shareholders are recognised in
the financial statements when paid. Final dividend distributions to
the Company's shareholders are recognised as a liability in the
consolidated financial information in the period in which the
dividends are approved by the shareholders. The final dividend
relating to the year ended 31 March 2022 will be approved and
recognised in the financial year ending 31 March 2023.
(y) Impairment excluding investment properties
(i) Financial assets
A financial asset (excluding financial assets at fair value
through profit and loss) is assessed at each reporting date to
determine whether there is any impairment. The Group recognises an
allowance for expected credit losses ("ECLs") for all receivables
and contract assets held by the Group. ECLs are based on the
difference between the contractual cash flows due in accordance
with the contract and all the cash flows that the Group expects to
receive, discounted at an approximation of the original effective
interest rate. The expected cash flows will include cash flows from
the sale of collateral held or other credit enhancements that are
integral to the contractual terms and that are not recognised
separately by the Group.
For rent and other trade receivables and any contract assets,
the Group applies a simplified approach in calculating ECLs. The
Group does not track changes in credit risk, but instead recognises
a loss allowance based on lifetime ECLs at each reporting date
(i.e. a loss allowance for credit losses expected over the
remaining life of the exposure, irrespective of the timing of the
default). In determining the ECLs the Group takes into account any
recent payment behaviours and future expectations of likely default
events (i.e. not making payment on the due date) based on
individual customer credit ratings, actual or expected insolvency
filings or Company voluntary arrangements and market expectations
and trends in the wider macroeconomic environment in which our
customers operate.
Impairment losses are recognised in the income statement. For
more information refer to note 7. Trade and other receivables are
written off once all avenues to recover the balances are exhausted
and the lease has ended.
(ii) Non-financial assets
The carrying amounts of the Group's non-financial assets, other
than investment property, are reviewed at each reporting date to
determine whether there is any indication of impairment. If any
such indication exists, then the asset's recoverable amount is
estimated.
The recoverable amount of an asset or cash-generating unit is
the greater of its value in use and its fair value less costs to
sell. In assessing value in use, the estimated future cash flows
are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money
and the risks specific to the asset. For the purpose of impairment
testing, assets are grouped together into the smallest group of
assets that generate cash inflows from continuing use that are
largely independent of the cash inflows of other assets or groups
of assets (the "cash-generating unit").
An impairment loss is recognised if the carrying amount of an
asset or cash-generating unit exceeds its estimated recoverable
amount. Impairment losses are recognised in the income statement.
Impairment losses recognised in profit or loss in respect of
cash-generating units are allocated first to reduce the carrying
amount of any goodwill allocated to the units and then to reduce
the carrying amount of the other assets in the unit (or group of
units) on a pro rata basis.
(z) Current versus non-current classification
The Group presents assets and liabilities in the statement of
financial position based on current/non-current classification,
except for deferred tax assets and liabilities which are classified
as non-current assets and liabilities. An asset is current when it
is:
-- expected to be realised or intended to be sold or consumed in the normal operating cycle;
-- held primarily for the purpose of trading;
-- expected to be realised within twelve months after the reporting period; or
-- cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least twelve months
after the reporting period.
All other assets are classified as non-current.
A liability is current when:
-- it is expected to be settled in the normal operating cycle;
-- it is held primarily for the purpose of trading;
-- it is due to be settled within twelve months after the reporting period; or
-- there is no unconditional right to defer the settlement of
the liability for at least twelve months after the reporting
period.
The Group classifies all other liabilities as non-current.
(aa) Business combinations and goodwill
Business combinations are accounted for using the acquisition
method. The cost of an acquisition is measured as the aggregate of
the consideration transferred, which is measured at acquisition
date fair value, and the amount of any non-controlling interests in
the acquiree. Assets acquired and liabilities assumed (including
contingent liabilities) are recognised at fair value. For each
business combination, the Group elects whether to measure the
non-controlling interests in the acquiree at fair value or at the
proportionate share of the acquiree's identifiable net assets.
Acquisition-related costs are expensed as incurred and included in
administrative expenses.
The Group determines that it has acquired a business when the
acquired set of activities and assets include an input and a
substantive process that together significantly contribute to the
ability to create outputs. The acquired process is considered
substantive if it is critical to the ability to continue producing
outputs, and the inputs acquired include an organised workforce
with the necessary skills, knowledge or experience to perform that
process or it significantly contributes to the ability to continue
producing outputs and is considered unique or scarce or cannot be
replaced without significant cost, effort or delay in the ability
to continue producing outputs.
When the Group acquires a business, it assesses the financial
assets and liabilities assumed for appropriate classification and
designation in accordance with the contractual terms, economic
circumstances and pertinent conditions as at the acquisition date.
This includes the separation of embedded derivatives in host
contracts by the acquiree.
Any contingent consideration to be transferred by the acquirer
will be recognised at fair value at the acquisition date.
Contingent consideration classified as equity is not remeasured and
its subsequent settlement is accounted for within equity.
Contingent consideration classified as an asset or liability that
is a financial instrument and within the scope of IFRS 9 "Financial
Instruments" is measured at fair value with the changes in fair
value recognised in the statement of profit or loss in accordance
with IFRS 9. Other contingent consideration that is not within the
scope of IFRS 9 is measured at fair value at each reporting date
with changes in fair value recognised in profit or loss.
Goodwill is initially measured at cost (being the excess of the
aggregate of the consideration transferred and the amount
recognised for non-controlling interests and any previous interest
held over the net identifiable assets acquired and liabilities
assumed). If the fair value of the net assets acquired is in excess
of the aggregate consideration transferred, the Group reassesses
whether it has correctly identified all of the assets acquired and
all of the liabilities assumed and reviews the procedures used to
measure the amounts to be recognised at the acquisition date. If
the reassessment still results in an excess of the fair value of
net assets acquired over the aggregate consideration transferred,
then the gain is recognised in profit or loss (see policy in note
2(y)).
After initial recognition, goodwill is measured at cost less any
accumulated impairment losses. For the purpose of impairment
testing, goodwill acquired in a business combination is, from the
acquisition date, monitored at the lowest level within the entity
at which is monitored for internal management purposes (see policy
in note 2(y)).
Where goodwill has been allocated to a cash-generating unit
("CGU") and part of the operation within that unit is disposed of,
the goodwill associated with the disposed operation is included in
the carrying amount of the operation when determining the gain or
loss on disposal. Goodwill disposed in these circumstances is
measured based on the relative values of the disposed operation and
the portion of the CGU retained.
(ab) Standards and interpretations in issue and not yet
effective
A number of new standards, amendments to standards and
interpretations have been issued but are not yet effective for the
Group. The application of these new standards, amendments and
interpretations is not expected to have a significant impact on the
Group's income statement or balance sheet.
(ac) Non-IFRS measures
The Directors have chosen to disclose EPRA earnings and EPRA net
asset value metrics, which are widely used alternative metrics to
their IFRS equivalents (further details on EPRA best practice
recommendations can be found at www.epra.com). Note 12 to the
financial statements includes a reconciliation of basic and diluted
earnings to EPRA earnings. Note 13 to the financial statements
includes a reconciliation of net assets to EPRA net asset value
metrics.
The Directors are required, as part of the JSE Listing
Requirements, to disclose headline earnings; accordingly, headline
earnings are calculated using basic earnings adjusted for
revaluation gain net of related tax, gain/loss on sale of
properties net of related tax, recoveries from prior disposals of
subsidiaries net of related tax, NCI relating to revaluation and
revaluation gain/loss on investment property relating to associates
net of related tax. Note 12 to the financial statements includes a
reconciliation between IFRS and headline earnings.
The Directors have chosen to disclose adjusted earnings in order
to provide an alternative indication of the Group's underlying
business performance; accordingly, it excludes the effect of
adjusting items net of related tax. Note 12 to the financial
statements includes a reconciliation of adjusting items included
within adjusted earnings, with certain adjusting items stated
within administrative expenses in note 7 and certain finance costs
in note 10.
The Directors have chosen to disclose adjusted profit before tax
and funds from operations in order to provide an alternative
indication of the Group's underlying business performance and to
facilitate the calculation of its dividend pool; a reconciliation
between profit before tax and funds from operations is included
within note 29 to the financial statements. Within adjusted profit
before tax are adjusting items as described above gross of related
tax.
Further details on non-IFRS measures can be found in the
business analysis section of this document.
3. Significant accounting judgements, estimates and
assumptions
Judgements
In the process of applying the Group's accounting policies,
which are described in note 2, the Directors have made the
following judgements that have the most significant effect on the
amounts recognised in the financial information:
Acquisition and disposal of properties
Property transactions can be complex in nature and material to
the financial statements. To determine when an acquisition or
disposal should be recognised, management considers whether the
Group assumes or relinquishes control of the property, and the
point at which this is obtained or relinquished. Consideration is
given to the terms of the acquisition or disposal contracts and any
conditions that must be satisfied before the contract is fulfilled.
In the case of an acquisition, management must also consider
whether the transaction represents an asset acquisition or business
combination.
On 15 November 2021 the Group acquired the BizSpace Group. A key
judgment was made by Management as to whether the acquisition
represented a business combination or asset acquisition, concluding
it represented a business combination. Refer to note 2aa above.
Estimates and assumptions
The key assumptions concerning the future and other key sources
of estimation uncertainty at the reporting date that have a
significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year
are discussed below:
Assessing goodwill for impairment (see also note 17)
Each year the Group considers cashflow forecasts from cash
generating units in order to estimate whether an impairment
provision is required in respect of goodwill. In making this
estimate, judgement is applied as to the extent to which the cash
flow forecasts prepared to assess value in use are distinguishable
and separate from cash flows already considered in the carrying
value of other assets held by the group, such as investment
property.
Goodwill arose during the year following the acquisition of
Helix Investments Limited. Having performed the assessment of value
in use, the Group determined that the identified cash flows could
not be distinguished from those included in other assets held by
the cash generating units, in particular those associated with the
fair value of investment property. Consequently, the goodwill was
impaired during the year.
Historic goodwill was recognised in January 2012 following the
internalisation of the Asset Management Agreement. Given the time
that has passed and performance and investment in the business
since acquisition, the Group has determined that the identified
cash flows could no longer be distinguished from those included in
other assets held by the cash generating units. Consequently, the
goodwill was impaired during the year.
Valuation of owned and leased investment properties (including
those recognised within assets held for sale or a disposal
group)
The fair value of the Group's owned investment properties was
determined by Cushman & Wakefield LLP (2021: Cushman &
Wakefield LLP), an independent valuer. After adjusting investment
properties for lease incentive accounting, the book value of
investment properties including assets held for sale is shown as
EUR2,074.9 million (2021: EUR1,347.2 million) as disclosed in note
14.
The Cushman & Wakefield LLP valuation approach is explained
in note 2(l).
The fair value of the Group's leased investment properties was
determined by the management. The book value of leased investment
properties is shown as EUR25.1 million (2021: EUR15.0 million) as
disclosed in note 14.
As a result of the level of judgement used in arriving at the
market valuations, the amounts which may ultimately be realised in
respect of any given property may differ from the valuations shown
on the statement of financial position.
Cash flow and covenant compliance forecasts
Cash flow forecasts and covenant compliance forecasts are
prepared by management to assess the going concern assumption and
viability of the Group. Estimations of future revenue and
expenditure are made to determine the expected cash inflows and
outflows, considering expectations for occupancy levels, forecast
expenditure and the current market climate. The impact of the
forecasted cash flows and underlying property valuations are
considered when assessing forecast covenant compliance and
anticipated levels of headroom on the Group's debt facilities.
Refer to note 2(d) for further details, which includes the
assessment of forecasted cash flows and covenant compliance in
management's going concern assessment.
Sustainability
In preparing the financial statements, management considered the
impact of climate change, taking into account the relevant
disclosures in the Strategic Report, including those made in
accordance with the recommendations of the Taskforce on Climate
related Financial Disclosure. The Group also considered the work
performed to date in preparing its net zero pathway which it plans
to be in line with the Science Based Targets Initiative (SBTIs). At
the time of preparing the financial statements, the Group expects a
limited exposure in relation to the investment properties, based on
the current climate-related requirements. On this basis, the
Directors concluded that climate change did not have a material
impact on the financial reporting judgements and estimates,
consistent with the assessment that this is not expected to have a
significant impact on the Group's going concern or viability
assessment.
4. Business combinations
The provisions of IFRS 3 are applied to all business
combinations.
Acquisitions in 2022
Acquisition of Helix Investments Limited
Acquired
Type of Date of voting
Company acquisition acquisition rights
---------------------------------- ------------- ------------- --------
15 Nov
Helix Investments Limited, Jersey Purchase 2021 100%
---------------------------------- ------------- ------------- --------
The purchase price amounted to EUR242,779,000 (GBP206,763,000).
The consideration was transferred in the form of cash. On
completion a loan advanced by the seller and held by Helix
Investments Limited of EUR45,021,000 (GBP38,342,000) was also
repaid in cash.
The Group incurred costs of EUR5,299,000 for legal advice and
due diligence in connection with the business combination and these
are included in administrative expenses.
Helix Investments Limited is the holding company of the BizSpace
Group business, which is a leading provider of regional flexible
workspace, offering light industrial, workshop, studio and out of
town office units to a wide range of businesses across the UK. The
acquisition therefore provides Sirius with a unique opportunity to
enter with immediate scale an under-served market via a one-step
acquisition of an established platform. It provides Sirius with a
high-quality portfolio, offering significant organic growth
potential in rental pricing in a UK market characterised by supply
constraints. The BizSpace Group business is also highly
complementary to Sirius' existing platform, allowing for meaningful
operational and financial synergies to drive value creation for
Sirius shareholders. The acquired identifiable assets and
liabilities as at 15 November 2021 are presented at their fair
values in the following table in accordance with the final purchase
price allocation:
Helix Investments
Limited
EUR000
-------------------------- -----------------
Investment property 421,105
Other non-current assets 3,033
Current assets 3,478
Cash and cash equivalents 33,069
Loans (214,495)
Current liabilities (23,727)
Lease liabilities (12,182)
Deferred tax liabilities (4,670)
-------------------------- -----------------
Net assets 205,611
-------------------------- -----------------
Purchase price 242,779
-------------------------- -----------------
Goodwill 37,168
-------------------------- -----------------
Based on final purchase price allocation, goodwill arising on
the purchase of Helix Investments Limited amounts to EUR37,168,000
as at 15 November 2021. At 31 March 2022, the Directors assessed
the computed goodwill to determine if it represented recoverable
value over and above the value included in the acquired investment
properties and other net assets, and concluded that there was
insufficient evidence to support such recovery and so wrote-off the
goodwill. As at 31 March 2022 the carrying amount of the goodwill
is EURnil as it has been impaired as per note 17.The gross amounts
of acquired trade receivables and impairment losses recognised were
as follows as at 15 November 2021:
Helix Investments
Limited
EUR000
------------------------------- -----------------
Gross trade receivables 1,111
Expected credit loss provision (498)
------------------------------- -----------------
Trade receivables 613
------------------------------- -----------------
Due to first-time consolidation as at 15 November 2021, the
acquired company has contributed revenue of EUR20,954,000 and
profit after tax of EUR47,891,000 to consolidated revenue and
consolidated profit.
Had the company already been fully consolidated as at 1 April
2021, consolidated revenue and consolidated profit after tax would
have been as follows:
1 April
2021 to
31 March
2022
EUR000
----------------------- ---------
Group revenue 243,879
Group profit after tax 211,060
----------------------- ---------
5. Operating segments
Information on each operating segment based on geographical
location in which the Group operates is provided to the chief
operating decision maker, namely the Group's executive management
team, on an aggregated basis and represented as operating profit
and expenses.
The investment properties that the Group owns are aggregated
into segments with similar economic characteristics such as the
nature of the property, the products and services it provides, the
customer type for the product served, and the method in which the
services are provided. Executive management considers that this is
best achieved through the operating segments of German assets and
United Kingdom assets. The Group's investment properties are
considered to be their own segment. The properties at each location
(Germany and UK) have similar economic characteristics. These have
been aggregated into two operating segments based on location in
accordance with the requirements of IFRS 8.
Consequently, the Group is considered to have two reportable
operating segments, as follows:
-- Germany; and
-- United Kingdom ("UK").
Consolidated information by segment is provided on a net
operating income basis, which includes revenues made up of gross
rents from third parties and direct expenses, gains and losses on
property valuations, property disposals, and control of
subsidiaries. All of the Group's share of profit of associates and
administrative expenses including goodwill impairment, amortisation
and depreciation are separately disclosed as part of operating
profit. Group administrative costs, finance income and expenses and
change in fair value of derivative financial instruments are
disclosed.
Income taxes and depreciation are not reported to the executive
management team on a segmented basis. There are no sales between
segments.
The operating segment UK is a result of a business combination
as disclosed in note 4. As such the UK segment reportable figures
are those from 15 November 2021 until 31 March 2022 whilst the
Germany segment consists of the full annual period ended 31 March
2022.
Year ended Year ended
31 March 2022 31 March 2021
---------------------------- ---------------------------
Germany UK Total Germany UK Total
EUR000 EUR000 EUR000 EUR000 EUR000 EUR000
---------------------------- -------- -------- -------- -------- ------- --------
Rental and other
income from investment
properties 108,716 15,258 123,974 95,288 - 95,288
Service charge income
from investment properties 55,009 5,696 60,705 51,041 - 51,041
Rental and other
income from managed
properties 10,884 - 10,884 9,699 - 9,699
Service charge income
from managed properties 14,619 - 14,619 9,333 - 9,333
---------------------------- -------- -------- -------- -------- ------- --------
Revenue 189,228 20,954 210,182 165,361 - 165,361
---------------------------- -------- -------- -------- -------- ------- --------
Direct costs (80,118) (7,571) (87,689) (71,541) - (71,541)
---------------------------- -------- -------- -------- -------- ------- --------
Net operating income 109,110 13,383 122,493 93,820 - 93,820
Gain on revaluation
of investment properties 100,872 40,012 140,884 99,585 - 99,585
(Gain)/loss on disposal
of properties (363) (260) (623) 54 - 54
Recoveries from prior
disposals of subsidiaries 94 - 94 65 - 65
Depreciation and
amortisation (2,685) (486) (3,171) (2,087) - (2,087)
Other administrative
expenses (34,321) (3,226) (37,547) (25,736) - (25,736)
Goodwill impairment (3,738) (37,168) (40,906) - - -
Share of profit of
associates 6,940 - 6,940 4,977 - 4,977
---------------------------- -------- -------- -------- -------- ------- --------
Operating profit 175,909 12,255 188,164 170,678 - 170,678
---------------------------- -------- -------- -------- -------- ------- --------
Finance income 2,986 - 2,986 2,712 - 2,712
Amortisation of capitalised
finance costs (2,544) (30) (2,574) (1,683) - (1,683)
Other finance expense (15,759) (4,886) (20,645) (8,186) - (8,186)
Change in fair value
of derivative financial
instruments 996 - 996 136 - 136
---------------------------- -------- -------- -------- -------- ------- --------
Net finance costs (14,321) (4,916) (19,237) (7,021) - (7,021)
---------------------------- -------- -------- -------- -------- ------- --------
Segment profit for
the year before tax 161,588 7,339 168,927 163,657 - 163,657
---------------------------- -------- -------- -------- -------- ------- --------
31 March 2022 31 March 2021
----------------------------- -----------------------------
Germany UK Total Germany UK Total
EUR000 EUR000 EUR000 EUR000 EUR000 EUR000
-------------------------- --------- ------- --------- --------- ------- ---------
Segment assets
Investment properties 1,635,221 464,783 2,100,004 1,362,192 - 1,362,192
Investment in associates 24,142 - 24,142 17,202 - 17,202
Other non-current
assets 21,535 3,236 24,771 11,169 - 11,169
-------------------------- --------- ------- --------- --------- ------- ---------
Total segment non-current
assets 1,680,898 468,019 2,148,917 1,390,563 - 1,390,563
-------------------------- --------- ------- --------- --------- ------- ---------
6. Revenue
Year ended Year ended
31 March 31 March
2022 2021
EUR000 EUR000
--------------------------------------------------- ---------- ----------
Rental and other income from investment properties 123,974 95,288
Service charge income from investment properties 60,705 51,041
Rental and other income from managed properties 10,884 9,699
Service charge income from managed properties 14,619 9,333
--------------------------------------------------- ---------- ----------
Total revenue 210,182 165,361
--------------------------------------------------- ---------- ----------
Other income relates primarily to income associated with
conferencing and catering of EUR2,977,000 (2021: EUR2,314,000) and
fee income from managed properties of EUR4,084,000 (2021:
EUR7,338,000).
The total revenue from contracts with customers includes service
charge income and other income totalling EUR63,682,000 from
investment properties (2021: EUR53,355,000) and EUR18,703,000 from
managed properties (2021: EUR16,671,000).
7. Operating profit
The following items have been charged in arriving at operating
profit:
Direct costs
Year ended Year ended
31 March 31 March
2022 2021
EUR000 EUR000
------------------------------------------------------- ---------- ----------
Service charge costs relating to investment properties 66,128 56,184
Costs relating to managed properties 16,985 11,274
Non-recoverable maintenance 4,576 4,083
------------------------------------------------------- ---------- ----------
Direct costs 87,689 71,541
------------------------------------------------------- ---------- ----------
Administrative expenses
Year ended Year ended
31 March 31 March
2022 2021
EUR000 EUR000
-------------------------------------------------- ---------- ----------
Audit and non-audit fees to audit firm 1,426 683
Legal and professional fees 3,901 2,778
Expected credit loss provision (see note 25) 2,291 1,791
Other administration costs (328) 2,781
LTIP and SIP 4,173 3,395
Employee costs 16,004 11,109
Director fees and expenses 604 493
Depreciation of plant and equipment (see note 16) 1,167 669
Amortisation of intangible assets (see note 17) 1,164 897
Depreciation of right of use assets (see note 18) 843 521
Marketing 2,345 2,009
Selling costs relating to assets held for sale 20 -
Exceptional items 7,108 697
-------------------------------------------------- ---------- ----------
Administrative expenses 40,718 27,823
-------------------------------------------------- ---------- ----------
The expected credit loss provision has increased during the year
mainly due to the increase of gross trade receivables as a result
of acquired assets in the financial year.
Other administration costs include net foreign exchange gains in
amount of EUR1,975,000 as a result of the increased foreign
currency cash balances as at the period end.
Employee costs as stated above relate to costs which are not
recovered through service charge.
Exceptional items relate to the following:
Year ended Year ended
31 March 31 March
2022 2021
EUR000 EUR000
------------------------------------------------------- ---------- ----------
Acquisition costs in relation to business combinations 5,299 -
Legal case costs 894 247
Office termination fees 500 -
Internal tax restructuring costs 415 250
Signage and hygiene costs related to Covid-19 - 200
------------------------------------------------------- ---------- ----------
Total 7,108 697
------------------------------------------------------- ---------- ----------
The following services have been provided by the Group's
auditors:
Year ended Year ended
31 March 31 March
2022 2021
EUR000 EUR000
------------------------------------------- ---------- ----------
Audit fees to audit firm:
Audit of consolidated financial statements 1,135 532
Audit of subsidiary undertakings 226 88
Total audit fees 1,361 620
------------------------------------------- ---------- ----------
Audit related assurance services 65 63
Other assurance services 234 -
------------------------------------------- ---------- ----------
Total assurance services 299 63
------------------------------------------- ---------- ----------
Total fees for non-audit services 299 63
------------------------------------------- ---------- ----------
Total fees 1,660 683
------------------------------------------- ---------- ----------
The other assurance services include services relating to the
corporate bond issuances in amount of EUR234,000 which have been
capitalised to the loan issue costs.
8. Employee costs and numbers
Year ended Year ended
31 March 31 March
2022 2021
EUR000 EUR000
----------------------- ---------- ----------
Wages and salaries 24,337 19,013
Social security costs 3,848 2,925
Pension 336 253
Other employment costs 335 71
----------------------- ---------- ----------
Total 28,856 22,262
----------------------- ---------- ----------
Included in the costs related to wages and salaries for the year
are expenses of EUR4,173,000 (2021: EUR3,395,000) relating to the
granting or award of shares under LTIPs and SIPs (see note 9). The
costs for all periods include those relating to Executive
Directors.
All employees are employed directly by one of the following
Group subsidiary companies: Sirius Facilities GmbH, Sirius
Facilities (UK) Limited, Curris Facilities & Utilities
Management GmbH, SFG NOVA GmbH, Sirius Finance (Guernsey) Limited,
BizSpace Limited, BizSpace II Limited, M25 Business Centres Limited
and Sirius Corporate Services B.V. The average number of people
employed by the Group during the year was 416 (2021: 256),
expressed in full-time equivalents. In addition, as at 31 March
2022, the Board of Directors consists of six Non-Executive
Directors (2021: five) and three Executive Directors (2021:
two).
9. Employee schemes
Equity-settled share-based payments
2018 LTIP
The LTIP for the benefit of the Executive Directors and the
Senior Management Team was approved in 2018 with three separate
grant dates. Awards granted under the LTIP are made in the form of
nil-cost options which vest after the three year performance period
with vested awards being subject to a further holding period of two
years. Awards are split between ordinary and outperformance awards.
Ordinary awards carry both adjusted net asset value per share
("TNR") (two-thirds of award) and relative total shareholder return
("TSR") (one-third of award) performance conditions and
outperformance awards carry a sole TNR performance condition. The
employee's tax obligation will be determined upon the vesting date
of the share issue.
June 2020 grant
3,600,000 ordinary share awards were granted under the scheme on
15 June 2020 with a total charge for the award of EUR2,265,552.
Charges for the awards are based on fair values calculated at the
grant date and expensed on a straight-line basis over the period
that individuals are providing service to the Company in respect of
the awards. For the 15 June 2020 LTIP grant an expense of
EUR811,000 is recognised in the consolidated income statement to 31
March 2022.
The following assumptions were used in calculating the fair
value per share for the TNR and TSR elements of the award that were
granted on 15 June 2020:
TNR TSR
------------------------------------------- ------------------ ------------------
Valuation methodology Black-Scholes Monte-Carlo
Calculation for 2/3 ordinary award 1/3 ordinary award
Share price at grant date - EUR 0.84 0.84
Exercise price - EUR nil nil
Expected volatility - % 38.5 38.5
Performance projection period - years 2.79 2.67
Expected dividend yield - % 4.28 4.28
Risk-free rate based on European
treasury bonds rate of return - % (0.677) p.a. (0.677) p.a.
Expected outcome of performance conditions
- % 100 67.2
Fair value per share - EUR 0.745 0.564
------------------------------------------- ------------------ ------------------
The weighted average fair value of share options granted on 15
June 2020 is EUR0.68.
Assumptions considered in this model include: expected
volatility of the Company's share price, as determined by
calculating the historical volatility of the Company's share price
over the period immediately prior to the date of grant and
commensurate with the expected life of the awards; dividend yield
based on the actual dividend yield as a percentage of the share
price at the date of grant; performance projection period;
risk-free rate; and correlation between comparators.
June 2019 grant
3,760,000 ordinary share awards and 690,000 outperformance share
awards were granted under the scheme on 16 June 2019 with a total
charge for the awards of EUR2,145,511 over three years. Charges for
the awards are based on fair values calculated at the grant date
and expensed on a straight-line basis over the period that
individuals are providing service to the Company in respect of the
awards. For the 16 June 2019 LTIP grant an expense of EUR1,126,000
is recognised in the consolidated income statement to 31 March
2022.
The fair value per share for the TNR and TSR elements of the
award was determined using Black-Scholes and Monte-Carlo models
respectively with the following assumptions used in the
calculation:
TNR TSR
------------------------------------------- ------------------- ------------------
Valuation methodology Black-Scholes Monte-Carlo
2/3 ordinary award/
outperformance
Calculation for award 1/3 ordinary award
Share price at grant date - EUR 0.73 0.73
Exercise price - EUR nil nil
Expected volatility - % 23.8 23.8
Performance projection period - years 2.80 2.67
Expected dividend yield - % 4.56 4.56
Risk-free rate based on European
treasury bonds rate of return - % (0.695) p.a. (0.695) p.a.
Expected outcome of performance conditions
- % 100/24.5 46.6
Fair value per share - EUR 0.643 0.340
------------------------------------------- ------------------- ------------------
The weighted average fair value of share options granted on 16
June 2019 is EUR0.54.
Assumptions considered in this model include: expected
volatility of the Company's share price, as determined by
calculating the historical volatility of the Company's share price
over the period immediately prior to the date of grant and
commensurate with the expected life of the awards; dividend yield
based on the actual dividend yield as a percentage of the share
price at the date of grant; performance projection period;
risk-free rate; and correlation between comparators.
January 2019 grant
In addition, as disclosed in the 2019 Annual Report, 4,000,000
ordinary share awards and 700,000 outperformance share awards were
previously granted under the scheme on 15 January 2019.
The January 2019 grant vested on 21 May 2021. Vesting was at
maximum level for all participants resulting in the exercise of
3,266,210 shares with a weighted average share price of EUR1.20 at
the date of exercise. 1,433,790 shares have been surrendered in
relation to the partial settlement of certain participants' tax
liabilities arising in respect of the vesting. An amount of
EUR1,944,000 was paid for the participants' tax liabilities.
2021 LTIP
The LTIP for the benefit of the Executive Directors and the
Senior Management Team was approved in 2021. Awards granted under
the LTIP are made in the form of nil-cost options which vest after
the three year performance period with vested awards being subject
to a further restricted period of two years when shares acquired on
exercise cannot be sold. Awards are subject to adjusted net asset
value per share ("TNR") (two-thirds of award) and relative total
shareholder return ("TSR") (one-third of award) performance
conditions. The employees' tax obligation will be determined upon
the vesting date of the share issue.
August 2021 grant
4,154,119 ordinary share awards were granted under the scheme on
2 August 2021 with a total charge for the award of EUR4,705,196.
Charges for the awards are based on fair values calculated at the
grant date and expensed on a straight-line basis over the period
that individuals are providing service to the Company in respect of
the awards. For the 2 August 2021 LTIP grant an expense of
EUR1,066,000 is recognised in the consolidated income statement to
31 March 2022.
The following assumptions were used in calculating the fair
value per share for the TNR and TSR elements of the award that were
granted on 2 August 2021:
TNR TSR
-------------------------------------- ------------------ ------------------
Valuation methodology Black-Scholes Monte-Carlo
Calculation for 2/3 ordinary award 1/3 ordinary award
Share price at grant date - EUR 1.39 1.39
Exercise price - EUR nil nil
Expected volatility - % 40.5 40.5
Expected life - years 2.91 2.91
Performance projection period - years 2.66 2.66
Expected dividend yield - % 2.79 2.79
Risk-free rate based on European
treasury bonds rate of return - % (0.817) p.a. (0.817) p.a.
Fair value per share - EUR 1.28 * 0.84**
-------------------------------------- ------------------ ------------------
* In accordance with IFRS 2, TNR is classed as a non-market
performance condition. As such, the fair value has been calculated
using a Black-Scholes model and does not take the expected outcome
of the performance condition into account. The Company currently
estimates the expected vesting outcome for the TNR award to be
100%.
** In accordance with IFRS 2, relative TSR is classed as a
market-based performance condition. As such, projected performance
and the likelihood of achieving the condition have been taken into
account when calculating the fair value using a Monte-Carlo model.
The model also uses assumptions for the expected volatility of
comparator companies, the pairwise correlation between comparator
companies and TSR performance between the start of the performance
period and the date of grant.
The weighted average fair value of share options granted on 2
August 2021 is EUR1.13.
Expected volatility of the Company's share price was determined
by calculating the historical volatility of the Company's share
price over the period immediately prior to the date of grant,
commensurate with the term to the end of the performance
period.
2019 SIP
A SIP for the benefit of senior employees of the Company was
approved in August 2019. The fair value was based on the Company's
estimate of the shares that will eventually vest. Under the SIP,
the awards were granted in the form of whole shares at no cost to
the participants. Shares will vest after a three year performance
period followed by a holding period of twelve months. The
performance conditions used to determine the vesting of the award
were based on the adjusted net asset value including dividends
paid. As a result, under the scheme in August 2019 2,784,750 shares
were granted (with an additional 70,000 allocated in the 2021
financial year), subject to performance criteria, and an expense
including related costs of EUR567,000 is recognised in the
consolidated income statement to 31 March 2022.
The SIP 2019 grant vested on 14 March 2022. Vesting was at
maximum level for all participants resulting in the exercise of
2,534,750 shares with a weighted average share price of EUR1.45 at
the date of exercise. 1,020,775 shares have been surrendered in
relation to the partial settlement of certain participants' tax
liabilities arising in respect of the vesting. An amount of
EUR1,500,000 was paid for the participants' tax liabilities.
During the year 195,000 shares were forfeited due to employees
in the scheme leaving the employment of the Company.
2020 SIP
Another SIP for the benefit of senior employees of the Company
was approved in July 2020. The July 2020 grant vested on 21 May
2021. Vesting was at maximum level for all participants resulting
in the exercise of 95,537 shares with a weighted average share
price of EUR1.26 at the date of exercise. 24,463 shares have been
surrendered in relation to the partial settlement of certain
participants' tax liabilities arising in respect of the vesting. An
amount of EUR75,000 was paid for the participants' tax
liabilities.
2021 SIP
Another SIP for the benefit of the senior employees was approved
in 2021. Awards granted under the SIP are made in the form of a
conditional right to receive a specified number of shares for nil
cost which vest after the three year performance period (on 1 March
2025 for the 2021 award) with vested awards being subject to a
further restricted period of one year when shares cannot be sold.
Awards are subject to adjusted net asset value per share ("TNR")
(two-thirds of award) and relative total shareholder return ("TSR")
(one-third of award) performance conditions. Awards are equity
settled. The employees' tax obligation will be determined upon the
vesting date of the share issue.
September 2021 grant
3,074,500 share awards were granted under the scheme on 7
September 2021 with a total charge for the award of EUR3,735,689 on
the basis that 0% of awards are forfeited during the vesting
period. Charges for the awards are based on fair values calculated
at the grant date and expensed on a straight-line basis over the
period that individuals are providing service to the Company in
respect of the awards. For the 7 September 2021 SIP grant an
expense of EUR603,000 is recognised in the consolidated income
statement to 31 March 2022.
The following assumptions were used in calculating the fair
value per share for the TNR and TSR elements of the award that were
granted on 7 September 2021:
TNR TSR
-------------------------------------- ------------------ ------------------
Valuation methodology Black-Scholes Monte-Carlo
Calculation for 2/3 ordinary award 1/3 ordinary award
Share price at grant date - EUR 1.49 1.49
Exercise price - EUR n/a n/a
Expected volatility - % 40.7 40.7
Expected life - years 3.48 3.48
Performance projection period - years 2.56 2.56
Expected dividend yield - % 2.60 2.60
Risk-free rate based on European
treasury bonds rate of return - % (0.737) p.a. (0.737) p.a.
Fair value per share - EUR 1.36 * 0.92**
-------------------------------------- ------------------ ------------------
* In accordance with IFRS 2, TNR is classed as a non-market
performance condition. As such, the fair value has been calculated
using a Black-Scholes model and does not take the expected outcome
of the performance condition into account. The Company currently
estimates the expected vesting outcome for the TNR award to be
100%.
** In accordance with IFRS 2, relative TSR is classed as a
market-based performance condition. As such, projected performance
and the likelihood of achieving the condition have been taken into
account when calculating the fair value using a Monte-Carlo model.
The model also uses assumptions for the expected volatility of
comparator companies and the pairwise correlation between
comparator companies and TSR performance between the start of the
performance period and the date of grant. Expected volatility of
the Company's share price was determined by calculating the
historical volatility of the Company's share price over the period
immediately prior to the date of grant, commensurate with the term
to the end of the performance period.
The weighted average fair value of share options granted on 7
September 2021 is EUR1.21.
Expected volatility of the Company's share price was determined
by calculating the historical volatility of the Company's share
price over the period immediately prior to the date of grant,
commensurate with the term to the end of the performance
period.
Movements in the number of awards outstanding are as
follows:
Year ended Year ended
31 March 2022 31 March 2021
------------------------ ------------------------
Weighted Weighted
average average
Number exercise Number exercise
of price of price
share awards EUR000 share awards EUR000
---------------------------------------- ------------- --------- ------------- ---------
Balance outstanding as at the beginning
of the year (nil exercisable) 15,584,750 - 11,934,750 -
Maximum granted during the year 7,302,831 - 3,790,000 -
Forfeited during the year (195,000) - (140,000) -
Exercised during the year (4,934,934) - - -
Shares surrendered to cover employee
tax obligations (2,479,028) - - -
---------------------------------------- ------------- --------- ------------- ---------
Balance outstanding as at year end
(nil exercisable) 15,278,619 - 15,584,750 -
---------------------------------------- ------------- --------- ------------- ---------
Employee benefit schemes
A reconciliation of share-based payments and employee benefit
schemes and their impact on the consolidated income statement is as
follows:
Year ended Year ended
31 March 31 March
2022 2021
EUR000 EUR000
---------------------------------------------------- ---------- ----------
Charge relating to 2018 LTIP - January 2019 grant - 1,202
Charge relating to 2018 LTIP - June 2019 grant 1,126 766
Charge relating to 2018 LTIP - June 2020 grant 811 645
Charge relating to 2021 LTIP - August 2021 grant 1,066 -
Charge relating to 2019 SIP - August 2019 grant 567 679
Charge relating to 2020 SIP - July 2020 grant - 103
Charge relating to 2021 SIP - September 2021 grant 603 -
---------------------------------------------------- ---------- ----------
Total consolidated income statement charge relating
to LTIP and SIP 4,173 3,395
---------------------------------------------------- ---------- ----------
An amount of EUR1,945,000 is recognised in other distributable
reserves as per the consolidated statement of changes in equity.
Own shares held in amount of EUR1,868,000 have been used to settle
the 2019 SIP award. In addition, an amount of EUR360,000 has been
accrued for future employers 'tax obligations in relation to share
based payment schemes.
10. Finance income, finance expense and change in fair value of
derivative financial instruments
Year ended Year ended
31 March 31 March
2022 2021
EUR000 EUR000
--------------------------------------------------------- ---------- ----------
Bank interest income 95 38
Finance income from associates 2,891 2,674
--------------------------------------------------------- ---------- ----------
Finance income 2,986 2,712
--------------------------------------------------------- ---------- ----------
Bank loan interest expense (11,482) (7,402)
Interest expense related to lease liabilities (see
note 18) (479) (349)
Amortisation of capitalised finance costs (2,574) (1,683)
--------------------------------------------------------- ---------- ----------
Total interest expense (14,535) (9,434)
Bank charges and bank interest expense on deposits (863) (435)
Refinancing costs, exit fees and prepayment penalties (7,821) -
--------------------------------------------------------- ---------- ----------
Other finance costs (8,684) (435)
--------------------------------------------------------- ---------- ----------
Finance expense (23,219) (9,869)
--------------------------------------------------------- ---------- ----------
Change in fair value of derivative financial instruments 996 136
--------------------------------------------------------- ---------- ----------
Net finance expense (19,237) (7,021)
--------------------------------------------------------- ---------- ----------
Included within refinancing costs are exit fees and early
prepayment penalties of EUR6,947,000 that directly related to the
early repayment of loans and cost in relation to the restructuring
of debt in amount of EUR874,000.
The change in fair value of derivative financial instruments of
EUR996,000 (2021: EUR136,000) reflects the change in the market
valuation of these financial instruments.
11. Taxation
Consolidated income statement
Year ended Year ended
31 March 31 March
2022 2021
EUR000 EUR000
--------------------------------------------------- ---------- ----------
Current income tax
Current income tax charge (6,220) (1,641)
Current income tax charge relating to disposals of
investment properties - (87)
Adjustments in respect of prior periods 112 (189)
--------------------------------------------------- ---------- ----------
Total current income tax (6,108) (1,917)
--------------------------------------------------- ---------- ----------
Deferred tax
Relating to origination and reversal of temporary
differences (14,827) (14,180)
--------------------------------------------------- ---------- ----------
Total deferred tax (14,827) (14,180)
--------------------------------------------------- ---------- ----------
Income tax charge reported in the income statement (20,935) (16,097)
--------------------------------------------------- ---------- ----------
The German corporation tax rate of 15.825% is used in the tax
reconciliation for the Group. Taxation for other jurisdictions is
calculated at the rates prevailing in each jurisdiction.
The reconciliation of the effective tax rate is explained
below:
Year ended Year ended
31 March 31 March
2022 2021
EUR000 EUR000
------------------------------------------------------------- ---------- ----------
Profit before tax 168,927 163,657
------------------------------------------------------------- ---------- ----------
Current tax using the German corporation tax rate
of 15.825% (2021: 15.825%) 26,733 25,899
Effects of:
Deductible interest on internal financing(1) (5,398) (7,207)
Tax exempt gain from selling of investments and dividends(2) (1,113) (798)
Non-deductible expenses 452 290
Change in unrecognised deferred tax - tax effect
of utilisation of tax losses not previously recognised(3) (10,478) (2,498)
Property valuation movements due to differences in
accounting treatments - (210)
Adjustments in respect of prior periods (112) 189
German trade tax 19 236
Other - 196
Goodwill impairment(4) 6,473 -
Difference in foreign tax rates(5) 1,452 -
Deferred tax - current year movements(6) 961 -
Rate difference between current tax and deferred
tax(7) 1,946 -
------------------------------------------------------------- ---------- ----------
Total income tax charge in the income statement 20,935 16,097
------------------------------------------------------------- ---------- ----------
(1) Amounts non-taxable on interest on internal financing have
decreased from the prior year as a result of the financing company
being tax resident in Cyprus for the full period and taxed on a
portion of its interest income, with the remainder not taxed at
15.825% being included in the reconciliation above to show the
difference in foreign tax rates.
(2) The tax exempt gain from selling of investments and
dividends in the current year relates to the profits of joint
ventures/associates only.
(3) Following the acquisition of the BizSpace Group on 15
November 2021, the BizSpace Group has entered into the UK REIT
regime effective from 1 April 2022. The result of the REIT
conversion included the de-recognition of deferred tax assets and
deferred tax liabilities on investment properties, shown above in
the reconciliation.
(4) An impairment of EUR40.9 million in relation to the goodwill
is included as a permanent item in the tax reconciliation.
(5) As the current UK corporation tax rate is 19% this item
shows the difference between this rate and the German corporation
tax rate of 15.825% used in the above reconciliation.
(6) The deferred tax only adjustment relates to movements in UK
temporary differences on investment properties and lease
liabilities which do not impact the income statement or current
taxes.
(7) As the substantively enacted UK main corporation tax rate
effective from 1 April 2023 is currently 25%, the difference
between the current UK corporation tax rate of 19% and the deferred
tax rate of 25% (for deferred tax unwinding after 1 April 2023) is
also included within the tax reconciliation.
Deferred tax assets and liabilities
Recognised deferred tax assets and liabilities are attributable
to the following:
Assets Liabilities Net
------------------ ------------------- ------------------
31 March 31 March 31 March 31 March 31 March 31 March
2022 2021 2022 2021 2022 2021
EUR000 EUR000 EUR000 EUR000 EUR000 EUR000
---------------------------------- -------- -------- --------- -------- -------- --------
Revaluation of investment
property - - (95,411) (73,946) (95,411) (73,946)
Rent free adjustments - - (640) (570) (640) (570)
Capitalised own
works - - (55) (43) (55) (43)
Hedging (swaps) - 249 (52) - (52) 249
IFRS 16 4,059 - (4,283) - (224) -
Tax losses 20,330 17,979 - - 20,330 17,979
Fixed asset temporary
differences 159 - - - 159 -
---------------------------------- -------- -------- --------- -------- -------- --------
Deferred tax assets/(liabilities) 24,548 18,228 (100,441) (74,559) (75,893) (56,331)
---------------------------------- -------- -------- --------- -------- -------- --------
In respect of IFRS 16, deferred tax had not previously been
recognised due to the application of the initial recognition
exemption. To align with IASB ED/2019/5, which amends the
application of the initial recognition exemption for transactions
giving rise to offsetting deferred tax assets and deferred tax
liabilities, a deferred tax liability has been recognised on the
IFRS 16 right of use asset and a deferred tax asset in respect of
the IFRS 16 lease liability resulting in a net deferred tax
liability recognised as at 31 March 2022. The amendments to the
initial recognition exemption under IAS 12 are effective for
accounting periods beginning on or after 1 January 2023 and have
been adopted early.
Movement in deferred tax during the year is as follows:
31 March Recognised Exchange Acquisition 31 March
2021 in income differences of a subsidiary 2022
EUR000 EUR000 EUR000 EUR000 EUR000
---------------------------------- -------- ---------- ------------ ---------------- --------
Revaluation of investment
property (73,946) (8,646) - (12,819) (95,411)
Rent free adjustments (570) (70) - - (640)
Capitalised own works (43) (12) - - (55)
Hedging (swaps) 249 (301) - - (52)
IFRS 16 - (5,697) - 5,473 (224)
Tax losses 17,979 2,272 (2) 81 20,330
Fixed asset temporary differences - (1,128) (32) 1,319 159
Other short-term temporary
differences - (1,245) (31) 1,276 -
---------------------------------- -------- ---------- ------------ ---------------- --------
Total (56,331) (14,827) (65) (4,670) (75,893)
---------------------------------- -------- ---------- ------------ ---------------- --------
The Group has not recognised a deferred tax asset on EUR257
million (2021: EUR238 million) of tax losses carried forward and
future share scheme deductions due to uncertainties over recovery.
There is no expiration date on EUR257 million of the losses and
future share scheme tax deductions will convert to tax losses on
realisation.
Recognised and unrecognised temporary differences in the
acquired BizSpace Group of EUR54 million, largely driven by
deferred tax liability on investment properties, has been
derecognised as at 31 March 2022 following the BizSpace Group's
entry to the UK REIT regime effective 1 April 2022 (see note 2(j)
above for further discussion of this). A deferred tax asset of
EUR0.2 million relating to the excess of capital allowances over
qualifying net book value in the BizSpace Group is expected to be
recoverable by the residual business of the BizSpace Group post
REIT conversion. A change in ownership of the Group may result in
restriction on the Group's ability to use tax losses in certain tax
jurisdictions.
A deferred tax liability is recognised on temporary differences
of EURnil (2021: EURnil) relating to the unremitted earnings of
overseas subsidiaries as the Group is able to control the timing of
the reversal of these temporary differences and it is probable that
they will not reverse in the foreseeable future. In his Budget
Statement of 3 March 2021, the UK Chancellor announced that the
main rate of UK corporation tax would increase to 25% from 1 April
2023. This may have a potential impact on any taxable profits made
by the residual business of the BizSpace Group post REIT conversion
and other UK operations only from that date.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to offset current tax assets against
current tax liabilities and when they relate to income taxes levied
by the same taxation authority and the Group intends to settle its
current tax assets and liabilities on a net basis. The following is
the analysis of the deferred tax balances (after offset) for
financial reporting purposes:
31 March 2022
-----------------------------
Assets Liabilities Net
EUR000 EUR000 EUR000
---------------------------------- ------ ----------- --------
UK 159 - 159
Germany 24,389 (100,441) (76,052)
Cyprus - - -
---------------------------------- ------ ----------- --------
Deferred tax assets/(liabilities) 24,548 (100,441) (75,893)
---------------------------------- ------ ----------- --------
31 March 2022
-----------------------------
Assets Liabilities Net
EUR000 EUR000 EUR000
--------------------------------- ------ ----------- --------
UK - (7,316) (7,316)
Germany - (2,690) (2,690)
Cyprus - (417) (417)
--------------------------------- ------ ----------- --------
Current tax assets/(liabilities) - (10,423) (10,423)
--------------------------------- ------ ----------- --------
12. Earnings per share
The calculations of the basic, diluted, EPRA, headline and
adjusted earnings per share are based on the following data:
Year ended Year ended
31 March 31 March
2022 2021
EUR000 EUR000
---------------------------------------------------------- ------------- -------------
Earnings attributable to the owners of the Company
Basic earnings 147,873 147,451
Diluted earnings 147,873 147,451
EPRA earnings 70,695 58,633
Diluted EPRA earnings 70,695 58,633
Headline earnings 58,368 58,848
Diluted headline earnings 58,368 58,848
---------------------------------------------------------- ------------- -------------
Adjusted
Basic earnings 147,873 147,451
Deduct gain on revaluation of investment properties (140,884) (99,585)
Add loss/(deduct gain) on sale of properties 623 (54)
Deduct recoveries from prior disposals of subsidiaries (94) (65)
Tax in relation to the gain on revaluation of investment
properties and gain on sale of properties above less
REIT related tax effects 14,624 14,346
Non-controlling interest ("NCI") relating to revaluation,
net of related tax 85 82
Goodwill impairment 40,906 -
Deduct revaluation gain on investment property relating
to associates (6,021) (4,199)
Tax in relation to the revaluation gain on investment
property relating to associates above 1,256 872
---------------------------------------------------------- ------------- -------------
Headline earnings after tax 58,368 58,848
Deduct change in fair value of derivative financial
instruments, net of related tax and NCI (793) (215)
Deduct revaluation expense relating to leased investment
properties (5,572) (4,325)
Add adjusting items, net of related tax and NCI(1) 19,122 4,092
---------------------------------------------------------- ------------- -------------
Adjusted earnings after tax 71,125 58,400
---------------------------------------------------------- ------------- -------------
Number of shares
Weighted average number of ordinary shares for the
purpose of basic, headline, adjusted and basic EPRA
earnings per share 1,097,082,162 1,040,956,722
---------------------------------------------------------- ------------- -------------
Weighted average number of ordinary shares for the
purpose of diluted earnings, diluted headline earnings,
diluted adjusted earnings and diluted EPRA earnings
per share 1,112,360,781 1,056,541,472
---------------------------------------------------------- ------------- -------------
Basic earnings per share 13.48c 14.16c
---------------------------------------------------------- ------------- -------------
Diluted earnings per share 13.29c 13.96c
---------------------------------------------------------- ------------- -------------
Basic EPRA earnings per share 6.44c 5.63c
---------------------------------------------------------- ------------- -------------
Diluted EPRA earnings per share 6.36c 5.55c
---------------------------------------------------------- ------------- -------------
Headline earnings per share 5.32c 5.65c
---------------------------------------------------------- ------------- -------------
Diluted headline earnings per share 5.25c 5.57c
---------------------------------------------------------- ------------- -------------
Adjusted earnings per share 6.48c 5.61c
---------------------------------------------------------- ------------- -------------
Adjusted diluted earnings per share 6.39c 5.53c
---------------------------------------------------------- ------------- -------------
(1) See reconciliation between adjusting items as stated within
earnings per share and those stated within administrative expenses
in note 7.
Year ended Year ended
31 March 31 March
2022 2021
Notes EUR000 EUR000
-------------------------------------------- ----- ---------- ----------
Exceptional items 7 7,108 697
Refinancing costs, exit fees and prepayment
penalties 10 7,821 -
Selling costs relating to assets held for
sale 7 20 -
LTIP and SIP 7 4,173 3,395
-------------------------------------------- ----- ---------- ----------
Adjusting items as per note 12 19,122 4,092
-------------------------------------------- ----- ---------- ----------
The following table shows the reconciliation of basic to
headline earnings, separately disclosing the impact before tax
(gross column) and after tax (net column):
Year ended Year ended
31 March 2022 31 March 2021
-------------------- ------------------
Gross Net Gross Net
EUR000 EUR000 EUR000 EUR000
----------------------------------------- --------- --------- -------- --------
Basic earnings 147,873 147,451
Deduct gain on revaluation of investment
properties (140,884) (126,260) (99,585) (85,326)
Add loss on sale of properties 623 623 (54) 33
Deduct recoveries from prior disposals
of subsidiaries (94) (94) (65) (65)
NCI relating to revaluation 104 85 101 82
Goodwill impairment 40,906 40,906 - -
Deduct revaluation gain on investment
property relating to associates (6,021) (4,765) (4,199) (3,327)
----------------------------------------- --------- --------- -------- --------
Headline earnings 58,368 58,848
----------------------------------------- --------- --------- -------- --------
EPRA earnings
Year ended Year ended
31 March 31 March
2022 2021
EUR000 EUR000
--------------------------------------------------------- ---------- ----------
Basic and diluted earnings attributable to owners
of the Company 147,873 147,451
Gain on revaluation of investment properties (140,884) (99,585)
Add loss on disposal of properties (including tax) 623 33
Deduct recoveries from prior disposals of subsidiaries (94) (65)
Refinancing costs, exit fees and prepayment penalties 7,821 -
Goodwill impairment 40,906 -
Acquisition costs in relation to business combinations 5,299 -
Change in fair value of derivative financial instruments (996) (136)
Deferred tax in respect of EPRA earnings adjustments 14,827 14,180
NCI in respect of the above 85 82
Deduct revaluation gain on investment property relating
to associates (6,021) (4,199)
Tax in relation to the revaluation gain on investment
property relating to associates 1,256 872
--------------------------------------------------------- ---------- ----------
EPRA earnings 70,695 58,633
--------------------------------------------------------- ---------- ----------
For more information on EPRA earnings refer to Annex 1.
For the calculation of basic, headline, adjusted, EPRA and
diluted earnings per share the number of shares has been reduced by
5,280,308 own shares held (2021: 3,684,608 shares), which are held
by an Employee Benefit Trust on behalf of the Group.
The weighted average number of shares for the purpose of
diluted, diluted EPRA, diluted headline and adjusted diluted
earnings per share is calculated as follows:
Year ended Year ended
31 March 31 March
2022 2021
----------------------------------------------------- ------------- -------------
Weighted average number of ordinary shares for the
purpose of basic, basic EPRA, headline and adjusted
earnings per share 1,097,082,162 1,040,956,722
Effect of grant of SIP shares 3,074,500 2,834,750
Effect of grant of LTIP shares 12,204,119 12,750,000
----------------------------------------------------- ------------- -------------
Weighted average number of ordinary shares for the
purpose of diluted, diluted EPRA, diluted headline
and adjusted diluted earnings per share 1,112,360,781 1,056,541,472
----------------------------------------------------- ------------- -------------
The Company has chosen to report EPRA earnings per share ("EPRA
EPS"). EPRA EPS is a definition of earnings as set out by the
European Public Real Estate Association. EPRA earnings represents
earnings after adjusting for the revaluation of investment
properties, changes in fair value of derivative financial
instruments, gains and losses on disposals of properties (net of
related tax), recoveries from prior disposals of subsidiaries (net
of related tax), refinancing costs, exit fees and prepayment
penalties (collectively the "EPRA earnings adjustments"), deferred
tax in respect of the EPRA earnings adjustments, NCI relating to
gain on revaluation and gain on sale of properties net of related
tax, revaluation gain on investment property relating to associates
and the related tax thereon.
13. Net asset value per share
31 March 31 March
2022 2021
EUR000 EUR000
-------------------------------------------------------- ------------- -------------
Net asset value
Net asset value for the purpose of assets per share
(assets attributable to the owners of the Company) 1,190,652 926,533
Deferred tax liabilities/(assets) (see note 11) 75,893 56,331
Derivative financial instruments at fair value (329) 1,141
-------------------------------------------------------- ------------- -------------
Adjusted net asset value attributable to the owners
of the Company 1,266,216 984,005
-------------------------------------------------------- ------------- -------------
Number of shares
Number of ordinary shares for the purpose of net
asset value per share and adjusted net asset value
per share 1,166,880,684 1,049,132,259
Number of ordinary shares for the purpose of EPRA
NTA per share 1,182,159,303 1,064,717,009
Net asset value per share 102.04c 88.31c
Adjusted net asset value per share 108.51c 93.79c
EPRA NTA per share 107.28c 92.29c
-------------------------------------------------------- ------------- -------------
Net asset value as at year end (basic) 1,190,652 926,533
Derivative financial instruments at fair value (329) 1,141
Deferred tax in respect of EPRA earnings adjustments 75,566 56,331
Goodwill as per note 17 - (3,738)
Intangibles as per note 17 (4,283) (2,830)
Deferred tax in respect of EPRA adjustments in relation
to investment in associates 6,563 5,212
-------------------------------------------------------- ------------- -------------
EPRA NTA 1,268,169 982,649
-------------------------------------------------------- ------------- -------------
EPRA NRV EPRA NTA EPRA NDV
31 March 2022 EUR000 EUR000 EUR000
------------------------------------------- --------- --------- ---------
Net asset value as at year end (basic) 1,190,652 1,190,652 1,190,652
------------------------------------------- --------- --------- ---------
Diluted EPRA net asset value at fair value 1,190,652 1,190,652 1,190,652
------------------------------------------- --------- --------- ---------
Group
Derivative financial instruments at fair
value (329) (329) n/a
Deferred tax in respect of EPRA earnings
adjustments 75,893 75,566 * n/a
Goodwill as per note 17 n/a - -
Intangibles as per note 17 n/a (4,283) n/a
Fair value of fixed interest rate debt n/a n/a (22,229)
Real estate transfer tax 160,692 n/a n/a
Investment in associate
Deferred tax in respect of EPRA earnings
adjustments 6,563 6,563 * n/a
Fair value of fixed interest rate debt n/a n/a 2,196
Real estate transfer tax 9,147 n/a n/a
------------------------------------------- --------- --------- ---------
Total EPRA NRV, NTA and NDV 1,442,618 1,268,169 1,170,619
------------------------------------------- --------- --------- ---------
EPRA NRV, NTA and NDV per share 122.03c 107.28c 99.02c
------------------------------------------- --------- --------- ---------
EPRA NRV EPRA NTA EPRA NDV
31 March 2021 EUR000 EUR000 EUR000
------------------------------------------- --------- -------- --------
Net asset value as at year end (basic) 926,533 926,533 926,533
------------------------------------------- --------- -------- --------
Diluted EPRA net asset value at fair value 926,533 926,533 926,533
------------------------------------------- --------- -------- --------
Group
Derivative financial instruments at fair
value 1,141 1,141 n/a
Deferred tax in respect of EPRA earnings
adjustments 56,331 56,331 * n/a
Goodwill as per note 17 n/a (3,738) (3,738)
Intangibles as per note 17 n/a (2,830) n/a
Fair value of fixed interest rate debt n/a n/a (3,485)
Real estate transfer tax 106,274 n/a n/a
Investment in associate
Deferred tax in respect of EPRA earnings
adjustments 5,212 5,212 * n/a
Fair value of fixed interest rate debt n/a n/a (1,772)
Real estate transfer tax 6,772 n/a n/a
------------------------------------------- --------- -------- --------
Total EPRA NRV, NTA and NDV 1,102,263 982,649 917,538
------------------------------------------- --------- -------- --------
EPRA NRV, NTA and NDV per share 103.53c 92.29c 86.18c
------------------------------------------- --------- -------- --------
* The Company intends to hold and does not intend in the long
term to sell any of the investment properties and has excluded such
deferred taxes for the whole portfolio as at year end except for
deferred tax in relation to assets held for sale.
For more information on adjusted net asset value and EPRA NRV,
NTA and NDV, refer to Annex 1.
The number of ordinary shares for the purpose of EPRA NRV, NTA
and NDV per share is calculated as follows:
31 March 31 March
2022 2021
---------------------------------------------------- ------------- -------------
Number of ordinary shares for the purpose of net
asset value per share and adjusted net asset value
per share 1,166,880,684 1,049,132,259
Effect of grant of SIP shares 3,074,500 2,834,750
Effect of grant of LTIP shares 12,204,119 12,750,000
---------------------------------------------------- ------------- -------------
Number of ordinary shares for the purpose of EPRA
NRV, NTA and NDV per share 1,182,159,303 1,064,717,009
---------------------------------------------------- ------------- -------------
The number of shares has been reduced by 5,280,308 own shares
held (2021: 3,684,608 shares), which are held by an Employee
Benefit Trust on behalf of the Group.
14. Investment properties
The movement in the book value of investment properties is as
follows:
31 March 31 March
2022 2021
EUR000 EUR000
----------------------------------------------------- --------- ---------
Total investment properties at book value as at the
beginning of the year 1,362,192 1,193,915
Acquisition of a subsidiary (see note 4)* 421,105 -
Additions - owned investment properties 162,844 35,484
Additions - leased investment properties 3,366 1,518
Capital expenditure and broker fees 22,607 31,720
Disposals (1,808) (30)
Reclassified as investment properties held for sale
(see note 15) (13,739) -
Gain on revaluation above capex and broker fees 147,017 104,156
Adjustment in respect of lease incentives (561) (246)
Deficit on revaluation relating to leased investment
properties (5,572) (4,325)
Foreign exchange differences 2,553 -
----------------------------------------------------- --------- ---------
Total investment properties at book value as at year
end (1) 2,100,004 1,362,192
----------------------------------------------------- --------- ---------
* An amount of EUR12,182,000 relate to leased investment properties.
The reconciliation of the valuation carried out by the external
valuer to the carrying values shown in the statement of financial
position is as follows:
31 March 31 March
2022 2021
EUR000 EUR000
--------------------------------------------------------- --------- ---------
Owned investment properties at market value per valuer's
report(1) 2,079,079 1,350,770
Adjustment in respect of lease incentives (4,153) (3,603)
Leased investment property market value 25,078 15,025
--------------------------------------------------------- --------- ---------
Total investment properties at book value as at year
end (1) 2,100,004 1,362,192
--------------------------------------------------------- --------- ---------
(1) Excluding assets held for sale.
The fair value (market value) of the Group's owned investment
properties as at year end has been arrived at on the basis of a
valuation carried out at that date by Cushman & Wakefield LLP
(2021: Cushman & Wakefield LLP), an independent valuer
accredited in terms of the RICS. The fee arrangement with Cushman
& Wakefield LLP for the valuation of the Group's properties is
fixed, subject to an adjustment for acquisitions and disposals.
The value of each of the properties has been assessed in
accordance with the RICS valuation standards on the basis of market
value. The methodology and assumptions used to determine the fair
values of the properties are consistent with the previous year.
The weighted average lease expiry remaining across the owned
portfolio in Germany as at year end was 2.9 years (2021: 2.9
years). The weighted average lease expiry remaining across the
owned portfolio in the UK as at year end was 0.9 years. Licence
agreements in the UK are rolling and are included in the
valuation.
The fair value (market value) of the Group's leased investment
properties as at year end has been arrived at on the basis of a
valuation carried out by management using discounted cash flows
similar to the approach of Cushman & Wakefield LLP.
The reconciliation of gain on revaluation above capex as per the
income statement is as follows:
Year ended Year ended
31 March 31 March
2022 2021
EUR000 EUR000
------------------------------------------------------ ---------- ----------
Gain on revaluation above capex and broker fees 147,017 104,156
Adjustment in respect of lease incentives (561) (246)
Deficit on revaluation relating to leased investment
properties (5,572) (4,325)
------------------------------------------------------ ---------- ----------
Gain on revaluation of investment properties reported
in the income statement 140,884 99,585
------------------------------------------------------ ---------- ----------
Included in the gain on revaluation of investment properties
reported in the income statement (excluding the revaluation effects
in respect of leased investment properties) are gross gains of
EUR160.4 million and gross losses of EUR19.5 million (2021: gross
gains of EUR106.4 million and gross losses of EUR6.8 million).
Other than the capital commitments disclosed in note 31, the
Group is under no contractual obligation to purchase, construct or
develop any investment property. The Group is responsible for
routine maintenance of the investment properties.
All investment properties are categorised as Level 3 fair values
as they use significant unobservable inputs. There have not been
any transfers between levels during the year. Investment properties
have been classed according to their asset type. Information on
these significant unobservable inputs per class of investment
property is disclosed below (excluding leased investment
properties).
The valuation for owned investment properties is (including
assets classified as held for sale) performed on a lease-by-lease
basis due to the mixed-use nature of the sites using the discounted
cash flow technique for the German portfolio and on a capitalised
income basis, where income is capitalised by an appropriate yield
which reflects the age, location, ownership, customer base and
agreement type for the UK portfolio. This gives rise to large
ranges in the inputs.
Current Market
rental rental Gross
Market rate rate initial Net initial Discount
value per sqm per sqm Occupancy yield yield factor Void period
(EUR000) EUR EUR % % % % months
------------ ----------- ----------- ------------ ----------- ---------- -----------
31 March
2022 Low High Low High Low High Low High Low High Low High Low High
------------ --------- ----- ----- ---- ----- ---- ----- --- ------- ----- ---- ---- ---- --- ------
Traditional
business
parks
Mature 329,100 2.67 8.32 2.65 7.42 91.5 100.0 4.5 8.5 3.7 6.7 3.6 5.4 6 12
Value add 625,540 -* 8.16 3.49 8.46 -* 97.3 -* 9.0 (3.7) 6.8 3.9 7.1 9 18
------------ --------- ----- ----- ---- ----- ---- ----- --- ------- ----- ---- ---- ---- --- ------
Total
traditional
business
parks 954,640 -* 8.32 2.65 8.46 -* 100.0 -* 9.0 (3.7) 6.8 3.6 7.1 6 18
------------ --------- ----- ----- ---- ----- ---- ----- --- ------- ----- ---- ---- ---- --- ------
Modern
business
parks
Mature 195,750 5.03 8.13 3.74 7.68 91.8 100.0 5.0 9.8 4.1 8.4 3.6 5.0 6 15
Value add 213,140 2.86 10.28 3.76 10.15 74.9 97.8 2.9 9.4 1.6 6.6 4.4 7.3 9 24
------------ --------- ----- ----- ---- ----- ---- ----- --- ------- ----- ---- ---- ---- --- ------
Total modern
business
parks 408,890 2.86 10.28 3.74 10.15 74.9 100.0 2.9 9.8 1.6 8.4 3.6 7.3 6 24
------------ --------- ----- ----- ---- ----- ---- ----- --- ------- ----- ---- ---- ---- --- ------
Office
Mature 10,200 10.07 10.07 9.38 9.38 87.1 87.1 6.4 6.4 5.2 5.2 4.5 4.5 9 9
Value add 266,880 2.03 11.78 6.15 12.18 40.0 92.0 2.0 9.5 -* 7.2 4.6 6.6 9 18
------------ --------- ----- ----- ---- ----- ---- ----- --- ------- ----- ---- ---- ---- --- ------
Total office 277,080 2.03 11.78 6.15 12.18 40.0 92.0 2.0 9.5 -* 7.2 4.5 6.6 9 18
------------ --------- ----- ----- ---- ----- ---- ----- --- ------- ----- ---- ---- ---- --- ------
Total
Germany 1,640,610 -* 11.78 2.65 12.18 -* 100.0 -* 9.8 (3.7) 8.4 3.6 7.3 6 24
------------ --------- ----- ----- ---- ----- ---- ----- --- ------- ----- ---- ---- ---- --- ------
Average market
Average current rental
Market rental rate rate Net initial
value per sqm per sqm Occupancy yield Void period
(EUR000) EUR EUR % % months
----------------- ---------------- ----------- ------------- -------------
31 March
2022 Low High Low High Low High Low High Low High
----------------- --------- ------- -------- ------- ------- ---- ----- ----- ------ ----- ------
Total mixed-use
schemes 123,263 1.71 26.49 5.78 23.59 48.6 96.8 3.0 10.0 4.00 12.00
----------------- --------- ------- -------- ------- ------- ---- ----- ----- ------ ----- ------
Total office 153,112 - * 25.38 5.83 26.50 -* 100.0 -* 10.0 4.00 12.00
----------------- --------- ------- -------- ------- ------- ---- ----- ----- ------ ----- ------
Total industrial 175,394 1.04 10.94 2.39 11.24 65.1 100.0 3.0 10.0 4.00 12.00
----------------- --------- ------- -------- ------- ------- ---- ----- ----- ------ ----- ------
Total UK 451,769 -* 26.49 2.39 26.50 -* 100.0 -* 10.0 4.00 12.00
----------------- --------- ------- -------- ------- ------- ---- ----- ----- ------ ----- ------
* The Group has acquired vacant investment properties during the
financial year. As a result the lower range for rental rates,
occupancy and yields is 0.
Current Market
rental rental Gross
Market rate per rate initial Net initial Discount
value sqm per sqm Occupancy yield yield factor Void period
(EUR000) EUR EUR % % % % months
----------- ----------- ----------- --------- ----------- ---------- -----------
31 March
2021 Low High Low High Low High Low High Low High Low High Low High
------------ --------- ---- ----- ---- ----- ---- ----- --- ---- --- ------ ---- ---- --- ------
Traditional
business
parks
Mature 326,650 2.67 8.16 2.65 8.46 91.3 100.0 4.7 8.8 3.8 7.2 3.8 5.9 6 12
Value add 439,100 1.99 6.44 3.33 6.91 49.5 97.3 4.7 9.3 3.4 7.2 4.3 7.4 9 18
------------ --------- ---- ----- ---- ----- ---- ----- --- ---- --- ------ ---- ---- --- ------
Total
traditional
business
parks 765,750 1.99 8.16 2.65 8.46 49.5 100.0 4.7 9.3 3.4 7.2 3.8 7.4 6 18
------------ --------- ---- ----- ---- ----- ---- ----- --- ---- --- ------ ---- ---- --- ------
Modern
business
parks
Mature 209,600 4.78 10.01 3.63 9.79 91.6 100.0 5.4 10.0 4.5 8.6 3.8 5.4 6 15
Value add 144,400 3.61 7.09 4.35 8.24 77.2 88.2 5.9 8.6 4.7 7.1 5.0 5.9 9 24
------------ --------- ---- ----- ---- ----- ---- ----- --- ---- --- ------ ---- ---- --- ------
Total modern
business
parks 354,000 3.61 10.01 3.63 9.79 77.2 100.0 5.4 10.0 4.5 8.6 3.8 5.9 6 24
------------ --------- ---- ----- ---- ----- ---- ----- --- ---- --- ------ ---- ---- --- ------
Office
Mature 17,080 7.81 9.70 9.19 9.21 91.6 94.0 4.7 6.9 3.6 5.8 4.6 4.8 9 9
Value add 213,940 3.93 11.35 6.02 10.30 57.9 99.5 2.6 10.4 0.7 8.3 4.9 6.9 9 15
------------ --------- ---- ----- ---- ----- ---- ----- --- ---- --- ------ ---- ---- --- ------
Total office 231,020 3.93 11.35 6.02 10.30 57.9 99.5 2.6 10.4 0.7 8.3 4.6 6.9 9 15
------------ --------- ---- ----- ---- ----- ---- ----- --- ---- --- ------ ---- ---- --- ------
Total
Germany 1,350,770 1.99 11.35 2.65 10.30 49.5 100.0 2.6 10.4 0.7 8.6 3.8 7.4 6 24
------------ --------- ---- ----- ---- ----- ---- ----- --- ---- --- ------ ---- ---- --- ------
As a result of the level of judgement and estimates used in
arriving at the market valuations, the amounts which may ultimately
be realised in respect of any given property may differ from
valuations shown in the statement of financial position. Key inputs
are considered to be inter-related whereby changes in one key input
can result in changes in other key inputs. The impact of changes in
relation to the key inputs is also shown in the table below:
Change of 5% Change of 0.25% Change of 0.5% Change of 0.5%
Market in market rental in discount in gross initial in net initial
value rates rates yield yield
EUR000 EUR000 EUR000 EUR000 EUR000
------------------- ------------------ ------------------- -------------------
31 March
2022 Increase Decrease Increase Decrease Increase Decrease Increase Decrease
------------------ --------- --------- -------- -------- -------- --------- -------- --------- --------
Total traditional
business
parks 954,640 48,450 (48,380) (19,640) 20,070 (84,224) 82,247 (98,020) 126,295
Total modern
business
parks 408,890 19,260 (19,420) (8,540) 8,510 (30,840) 36,820 (38,033) 48,091
Total office 277,080 14,470 (14,340) (5,840) 5,760 (23,005) 28,467 (37,901) 27,766
------------------ --------- --------- -------- -------- -------- --------- -------- --------- --------
Market value
Germany 1,640,610 82,180 (82,140) (34,020) 34,340 (138,069) 147,534 (173,954) 202,152
------------------ --------- --------- -------- -------- -------- --------- -------- --------- --------
Change of 5% Change of 0.5%
Market in market rental in net initial
value rates yield
EUR000 EUR000 EUR000
------------------- ------------------
31 March 2022 Increase Decrease Increase Decrease
------------------------ ------- --------- -------- -------- --------
Total mixed-use schemes 123,263 3,967 (4,423) (4,494) 4,389
Total office 153,112 5,754 (5,325) (4,295) 5,029
Total industrial 175,394 7,139 (6,333) (5,822) 6,843
------------------------ ------- --------- -------- -------- --------
Market value UK 451,769 16,860 (16,081) (14,611) 16,261
------------------------ ------- --------- -------- -------- --------
Change of 0.5% Change of 0.5%
Change of 5% Change of 0.25%
Market in market rental in discount in gross initial in net initial
value rates rates yield yield
EUR000 EUR000 EUR000 EUR000 EUR000
------------------- ------------------ ------------------- -------------------
31 March
2021 Increase Decrease Increase Decrease Increase Decrease Increase Decrease
------------------ --------- --------- -------- -------- -------- --------- -------- --------- --------
Total traditional
business
parks 765,750 38,310 (38,000) (15,030) 15,950 (58,824) 69,947 (74,243) 93,306
Total modern
business
parks 354,000 17,350 (17,190) (7,560) 7,960 (24,479) 28,561 (29,189) 35,288
Total office 231,020 11,680 (11,480) (4,520) 4,850 (18,859) 23,308 (26,769) 53,359
------------------ --------- --------- -------- -------- -------- --------- -------- --------- --------
Market value
Germany 1,350,770 67,340 (66,670) (27,110) 28,760 (102,162) 121,816 (130,201) 181,953
------------------ --------- --------- -------- -------- -------- --------- -------- --------- --------
15. Assets held for sale
Investment properties held for sale
31 March 31 March
2022 2021
EUR000 EUR000
----------------------- -------- --------
Magdeburg 13,750 -
----------------------- -------- --------
Balance as at year end 13,750 -
----------------------- -------- --------
The disclosures regarding valuation in note 14 are also
applicable to assets held for sale. An amount of EUR13,750,000
relating to the sale of the Magdeburg asset was received prior to
the completion date of 1 April 2022 and is included in the cash at
bank per note 22. As a result, an equal and opposite position
within other payables was recognised. See note 23 for further
details.
16. Plant and equipment
Plant and Fixtures
equipment and fittings Total
EUR000 EUR000 EUR000
----------------------------------------- ---------- ------------- -------
Cost
As at 31 March 2021 1,035 6,052 7,087
Acquisition of a subsidiary (see note 4) 727 1,826 2,553
Additions in year 889 519 1,408
Disposals in year - (3) (3)
Foreign exchange differences 13 22 35
----------------------------------------- ---------- ------------- -------
As at 31 March 2022 2,664 8,416 11,080
----------------------------------------- ---------- ------------- -------
Depreciation
As at 31 March 2021 (691) (3,714) (4,405)
Charge for year (389) (778) (1,167)
Disposals in year - 3 3
Foreign exchange differences (8) (11) (19)
----------------------------------------- ---------- ------------- -------
As at 31 March 2022 (1,088) (4,500) (5,588)
----------------------------------------- ---------- ------------- -------
Net book value as at 31 March 2022 1,576 3,916 5,492
----------------------------------------- ---------- ------------- -------
Cost
As at 31 March 2020 716 5,394 6,110
Additions in year 319 658 977
Disposals in year - - -
----------------------------------------- ---------- ------------- -------
As at 31 March 2021 1,035 6,052 7,087
----------------------------------------- ---------- ------------- -------
Depreciation
As at 31 March 2020 (615) (3,121) (3,736)
Charge for year (76) (593) (669)
Disposals in year - - -
----------------------------------------- ---------- ------------- -------
As at 31 March 2021 (691) (3,714) (4,405)
----------------------------------------- ---------- ------------- -------
Net book value as at 31 March 2021 344 2,338 2,682
----------------------------------------- ---------- ------------- -------
17. Intangible assets
Software
and
licences
with
definite
useful
life Goodwill Total
EUR000 EUR000 EUR000
----------------------------------------- --------- -------- --------
Cost
As at 31 March 2021 7,848 3,738 11,586
Acquisition of a subsidiary (see note 4) 480 37,168 37,648
Additions in year 2,132 - 2,132
Disposals in year - - -
Foreign exchange differences 5 - 5
----------------------------------------- --------- -------- --------
As at 31 March 2022 10,465 40,906 51,371
----------------------------------------- --------- -------- --------
Amortisation
As at 31 March 2021 (5,018) - (5,018)
Charge for year (1,164) - (1,164)
Disposals in year - - -
Impairment - (40,906) (40,906)
Foreign exchange differences - - -
----------------------------------------- --------- -------- --------
As at 31 March 2022 (6,182) (40,906) (47,088)
----------------------------------------- --------- -------- --------
Net book value as at 31 March 2022* 4,283 - 4,283
----------------------------------------- --------- -------- --------
Cost
As at 31 March 2020 6,107 3,738 9,845
Additions in year 1,741 - 1,741
Disposals in year - - -
----------------------------------------- --------- -------- --------
As at 31 March 2021 7,848 3,738 11,586
----------------------------------------- --------- -------- --------
Amortisation
As at 31 March 2020 (4,121) - (4,121)
Charge for year (897) - (897)
Disposals in year - - -
----------------------------------------- --------- -------- --------
As at 31 March 2021 (5,018) - (5,018)
----------------------------------------- --------- -------- --------
Net book value as at 31 March 2021* 2,830 3,738 6,568
----------------------------------------- --------- -------- --------
* Included in the net book value is an amount of EUR2,393,000
relating to intangible assets under development not yet amortised
(2021: EUR1,600,000). All these development projects are expected
to finalise in the next financial year.
Internalisation of Asset Management Agreement
On 30 January 2012, a transaction was completed to internalise
the Asset Management Agreement and, as a result of the
consideration given exceeding the net assets acquired, goodwill of
EUR3,738,000 was recognised. The goodwill is allocated to the
cash-generating units comprising the Germany segment.
As explained in note 3, in the year ended 31 March 2022
indicators of impairment relating to the goodwill balance were
noted as the Group has determined that the identified cash flows
could no longer be distinguished from those included in other
assets held by the cash generating units in the Germany segment.
This resulted in the entirety of the balance being impaired and a
consequent impairment loss of EUR3,738,000 being recognised.
Goodwill which has been impaired may not be reversed in future
periods.
Helix Investment Limited
On 15 November 2021, the business combination described in note
4 resulted in the recognition of goodwill due to the consideration
given exceeding the net assets required by EUR37,168,000. The
goodwill balance was allocated to the cash-generating units
comprising the UK segment and an impairment test was performed at
31 March 2022 to determine whether the recoverable amount of the
cash-generating units exceed the carrying value. The key
assumptions regarding value in use were three-year cash flow
forecasts as prepared by management of the group of cash-generating
units and the discount rate applied. Cash flows beyond three years
are extrapolated using an inflation figure of 2%. The discount rate
used is a pre-tax rate and reflects the risks specific to the real
estate industry in the UK. A discount rate of 7.13% and terminal
value of 5.13% were applied in the impairment review.
In the period since acquisition, the properties held by BizSpace
and the rent roll of the UK segment have increased in value
significantly. The Group has considered these factors along with
the value in use calculation in assessing whether the goodwill is
recoverable and has concluded that it is not. Whilst the Group's
longer term plans for the business and the potential synergies with
the broader Group are at an early stage, based on the impairment
review conducted the Group has concluded that there is not
sufficient evidence to support the goodwill balance over and above
the cash flows already included in the assessment of the fair value
of investment properties and other assets held by the Group. As a
result, an impairment loss of EUR37,168,000 was recognised for the
year ended 31 March 2022. Goodwill which has been impaired may not
be reversed in future periods.
18. Right of use assets and lease liabilities
Set out below are the carrying amounts of right of use assets
(excluding those disclosed under investment properties) recognised
and the movements during the year:
Office Total
EUR000 EUR000
--------------------- ------- -------
As at 31 March 2020 2,440 2,440
Additions - -
Depreciation expense (521) (521)
--------------------- ------- -------
As at 31 March 2021 1,919 1,919
--------------------- ------- -------
Additions 15,047 15,047
Depreciation expense (843) (843)
Lease modifications* (1,127) (1,127)
--------------------- ------- -------
As at 31 March 2022 14,996 14,996
--------------------- ------- -------
* Lease modifications relate to the early termination of the head office lease.
In addition to office spaces the Group is also counterparty to
long-term leasehold agreements and head leases relating to
commercial property. Right of use assets amounting to EUR25,078,000
(2021: EUR15,025,000) are classified as investment properties, of
which EUR3,979,000 (2021: EUR9,355,000) relate to commercial
property.
Set out below are the carrying amounts of lease liabilities and
the movements during the year:
31 March 31 March
2022 2021
EUR000 EUR000
--------------------------------------------- -------- --------
Balance as at the beginning of the year (14,987) (19,150)
Acquisition of a subsidiary (see note 4) (12,182) -
Accretion of interest (479) (349)
Additions (18,413) (1,518)
Lease modifications 1,127 -
Payments 6,350 6,030
Foreign exchange differences (77) -
--------------------------------------------- -------- --------
Balance as at year end (38,661) (14,987)
--------------------------------------------- -------- --------
Current lease liabilities as at year end (1,090) (5,857)
--------------------------------------------- -------- --------
Non-current lease liabilities as at year end (37,571) (9,130)
--------------------------------------------- -------- --------
The following table sets out the carrying amount, by maturity,
of the Group's lease liabilities:
Within
1 year 1-5 years 5+ years Total
31 March 2022 EUR000 EUR000 EUR000 EUR000
--------------------- ------- --------- -------- --------
Commercial property* (667) (945) (528) (2,140)
Long-term leasehold* (239) (1,013) (19,848) (21,100)
Office space (184) (6,197) (9,040) (15,421)
--------------------- ------- --------- -------- --------
Total (1,090) (8,155) (29,416) (38,661)
--------------------- ------- --------- -------- --------
Within
1 year 1-5 years 5+ years Total
31 March 2021 EUR000 EUR000 EUR000 EUR000
--------------------- ------- --------- -------- --------
Commercial property* (5,208) (1,364) (776) (7,348)
Long-term leasehold* (133) (560) (4,977) (5,670)
Office space (516) (1,453) - (1,969)
--------------------- ------- --------- -------- --------
Total (5,857) (3,377) (5,753) (14,987)
--------------------- ------- --------- -------- --------
* These lease liabilities relate to right of use assets recorded as investment properties.
Maturity analysis of lease liabilities using contractual
undiscounted payments is disclosed in note 25.
The overall weighted average discount rate used for the year is
2.3% (2021: 1.9%).
During the year expenses paid for leases of low-value assets and
short-term leases which are recognised straight line over the lease
term (included in the administrative expenses) amounted to
EUR494,000 (2021: EUR379,000).
In addition to leases of low-value assets and payments resulting
from short-term leases that are included in the cash flow from
operating activities, interest payments and repayments of lease
liabilities totalling EUR6,350,000 (2021: EUR6,030,000) were
incurred for the year and are included in the cash flow from
financing activities.
19. Other non-current financial assets
31 March 31 March
2022 2021
EUR000 EUR000
------------------------ -------- --------
Guarantees and deposits 4,052 1,806
Loans to associates 44,278 43,154
------------------------ -------- --------
Balance as at year end 48,330 44,960
------------------------ -------- --------
Loans to associates relate to shareholder loans granted to
associates by the Group. The loans terminate on 31 December 2026,
are fully subordinated and are charged at a fixed interest rate.
The ECL has been considered based on multiple factors such as
history of repayments, forward looking budgets and forecasts. Based
on the assessment the ECL was immaterial.
20. Investment in associates
The principal activity of the associates is the investment in,
and development of, commercial property located in Germany and to
provide conventional and flexible workspace. Since the associates
are individually immaterial the Group is disclosing aggregated
information of the associates.
The following table illustrates the summarised financial
information of the Group's investment in associates:
31 March 31 March
2022 2021
EUR000 EUR000
-------------------------------- --------- ---------
Current assets 20,031 31,183
Non-current assets 349,796 244,289
Current liabilities (10,406) (10,224)
Non-current liabilities (294,121) (221,756)
-------------------------------- --------- ---------
Equity 65,300 43,492
Unrecognised accumulated losses 3,679 5,657
-------------------------------- --------- ---------
Subtotal 68,979 49,149
-------------------------------- --------- ---------
Group's share in equity - 35% 24,142 17,202
-------------------------------- --------- ---------
Year ended Year ended
31 March 31 March
2022 2021
EUR000 EUR000
-------------------------------------------------- ---------- ----------
Net operating income 19,872 14,063
Gain on revaluation of investment properties 18,856 12,693
Administrative expense (3,001) (1,976)
-------------------------------------------------- ---------- ----------
Operating profit 35,727 24,780
Net finance costs (9,753) (9,078)
-------------------------------------------------- ---------- ----------
Profit before tax 25,974 15,702
Taxation (4,166) (2,590)
Unrecognised (profit)/losses (1,978) 1,109
-------------------------------------------------- ---------- ----------
Total comprehensive income for the year after tax 19,830 14,221
-------------------------------------------------- ---------- ----------
Group's share of profit for the year - 35% 6,940 4,977
-------------------------------------------------- ---------- ----------
Included within the non-current liabilities are shareholder
loans amounting to EUR126,509,000 (2021: EUR123,296,000). As at
year end no contingent liabilities existed (2021: none). The
associates had contracted capital expenditure for development and
enhancements of EUR2,010,000 as at year end (2021: EUR296,000).
The following table illustrates the movement in investment in
associates:
31 March 31 March
2022 2021
EUR000 EUR000
---------------------------------------- -------- --------
Balance as at the beginning of the year 17,202 12,306
Dividend received - (81)
Share of profit 6,940 4,977
---------------------------------------- -------- --------
Balance as at year end 24,142 17,202
---------------------------------------- -------- --------
21. Trade and other receivables
31 March 31 March
2022 2021
EUR000 EUR000
-------------------------------------------------- -------- --------
Gross trade receivables 18,791 11,758
Expected credit loss provision (refer to note 25) (7,722) (5,431)
-------------------------------------------------- -------- --------
Net trade receivables 11,069 6,327
Other receivables 8,865 11,334
Prepayments 4,637 1,070
-------------------------------------------------- -------- --------
Balance as at year end 24,571 18,731
-------------------------------------------------- -------- --------
Other receivables include lease incentives of EUR4,036,000
(2021: EUR3,603,000).
Prepayments include costs totalling EUR1,860,000 (31 March 2021:
EURnil) relating to the acquisition of a new site in Düsseldorf
that was notarised before 31 March 2022 and is expected to complete
in the first half of the next financial year (see note 31).
22. Cash and cash equivalents
31 March 31 March
2022 2021
EUR000 EUR000
----------------------- -------- --------
Cash at bank 127,285 49,305
Restricted cash 23,681 16,369
----------------------- -------- --------
Balance as at year end 150,966 65,674
----------------------- -------- --------
Cash at bank earns interest at floating rates based on daily
bank deposit rates. The fair value of cash as at year end is
EUR150,966,000 (2021: EUR65,674,000). Cash is held by reputable
banks and the Group assessed the ECL to be immaterial.
The following table illustrates the breakdown of cash held in
restricted accounts:
31 March 31 March
2022 2021
EUR000 EUR000
------------------------------------------------------------- -------- --------
Deposits received from tenants 22,210 12,736
Office rent deposits 131 131
Cash reserved for future bank loan interest and amortisation
payments of the Group's banking facilities - 2,192
Deposit for bank guarantees 1,340 1,310
------------------------------------------------------------- -------- --------
Total 23,681 16,369
------------------------------------------------------------- -------- --------
The majority of the restricted cash is in relation to tenant
deposits. Tenants' deposits are legal securities of tenants
retained by the Group without the right to use these cash deposits
for purposes other than strictly tenant related transactions (e.g.
move-out costs, costs due to non-compliance with certain terms of
the lease agreement or late rent/service charge payments).
23. Trade and other payables
31 March 31 March
2022 2021
EUR000 EUR000
---------------------------------- -------- --------
Trade payables 6,488 7,107
Accrued expenses 25,093 19,034
Interest and amortisation payable 5,625 489
Tenant deposits 22,210 12,736
Unearned revenue 7,913 4,642
Other payables 22,006 6,519
---------------------------------- -------- --------
Balance as at year end 89,335 50,527
---------------------------------- -------- --------
Accrued expenses include costs totalling EUR10,279,000 (2021:
EUR9,465,000) relating to service charge costs that have not been
invoiced to the Group.
Included within other payables are mainly credit balances due to
tenants in relation to over collections of service charge in amount
of EUR2,624,000 (2021: EUR3,830,000). As at 31 March 2022, other
payables included EUR13,750,000 of proceeds relating to the sale of
the Magdeburg asset that is categorised as an asset held for sale
at 31 March 2022 in advance of the completion date of 1 April 2022.
See note 15 for details of assets held for sale.
Unearned revenue includes service charge amounts of EUR1,164,000
(2021: EUR1,068,000). Service charge income is only recognised as
income when the performance obligations are met. All unearned
revenue of the prior year was recognised as revenue in the current
year.
24. Interest-bearing loans and borrowings
Interest 31 March 31 March
rate Loan maturity 2022 2021
% date EUR000 EUR000
-------------------------------------- ---------- ---------------- -------- --------
Current
SEB AG
- fixed rate facility 1.84 1 September 2022 - 1,180
- hedged floating rate facility Hedged (4) 30 October 2024 - 459
- capped floating rate facility Capped (3) 25 March 2025 - 760
Berlin Hyp AG/Deutsche Pfandbriefbank
AG
- fixed rate facility 1.66 27 April 2023 - 2,968
Berlin Hyp AG
- fixed rate facility 1.48 31 October 2023 1,909 1,881
- fixed rate facility 0.90 31 October 2023 1,480 1,467
Saarbrücken Sparkasse
- fixed rate facility 1.53 28 February 2025 771 760
Deutsche Pfandbriefbank AG
- hedged floating rate facility Hedged (1) 31 December 2023 1,111 1,110
Floating
- floating rate facility (2) 31 December 2023 140 140
Schuldschein
Floating
- floating rate facility (2) 5 December 2022 5,000 -
Floating
- floating rate facility (2) 6 January 2023 10,000 -
Capitalised finance charges
on all loans (781) (1,611)
-------------------------------------- ---------- ---------------- -------- --------
19,630 9,114
-------------------------------------- ---------- ---------------- -------- --------
Non-current
SEB AG
- fixed rate facility 1.84 1 September 2022 - 51,330
- hedged floating rate facility Hedged (4) 30 October 2024 - 21,325
Floating
- floating rate facility (4) 30 October 2024 - 2,000
- capped floating rate facility Capped (3) 25 March 2025 - 34,960
Berlin Hyp AG/Deutsche Pfandbriefbank
AG
- fixed rate facility 1.66 27 April 2023 - 56,135
Berlin Hyp AG
- fixed rate facility 1.48 31 October 2023 58,228 60,137
- fixed rate facility 0.90 31 October 2023 110,363 111,843
Saarbrücken Sparkasse
- fixed rate facility 1.53 28 February 2025 14,258 15,030
Deutsche Pfandbriefbank AG
- hedged floating rate facility Hedged (1) 31 December 2023 51,056 52,166
Floating
- floating rate facility (1) 31 December 2023 6,241 6,381
Schuldschein
Floating
- floating rate facility (2) 5 December 2022 - 5,000
Floating
- floating rate facility (2) 6 January 2023 - 10,000
Floating
- floating rate facility (2) 6 January 2025 5,000 5,000
- fixed rate facility 1.70 3 March 2025 10,000 10,000
- fixed rate facility 1.60 3 July 2023 20,000 20,000
Corporate bond I
- fixed rate 1.125 22 June 2026 400,000 -
Corporate bond II
- fixed rate 1.75 24 November 2028 300,000 -
Capitalised finance charges
on all loans (13,283) (2,367)
-------------------------------------- ---------- ---------------- -------- --------
961,863 458,940
-------------------------------------- ---------- ---------------- -------- --------
Total 981,493 468,054
-------------------------------------- ---------- ---------------- -------- --------
(1) Tranche 1 of this facility is fully hedged with a swap
charged at a rate of 1.40%; tranche 2 of this facility is fully
hedged with a swap charged at a rate of 1.25%; and EUR19.1 million
of tranche 3 of this facility is fully hedged with a swap charged
at a rate of 0.91%. A EUR6.5 million extension and the tranche 3
related EUR0.5 million arrangement fee are charged with a floating
rate of 1.20% over three-month EURIBOR (not less than 0%).
(2) This unsecured facility has a floating rate of 1.50% over
six month EURIBOR (not less than 0%) for the first two tranches and
a floating rate of 1.70% over six month EURIBOR (not less than 0%)
for tranche 3.
(3) This facility was hedged with a cap rate at 0.75% and
charged with a floating rate of 1.58% over six month EURIBOR (not
less than 0%) for the full term of the loan.
(4) Tranche 1 of this facility was fully hedged with a swap
charged at a rate of 2.58%; tranche 2 of this facility was fully
hedged with a swap charged at a rate of 2.56%. The capex facility
was charged with a floating rate of 1.88% over six month EURIBOR
(not less than 0%) for the full term of the loan.
The borrowings (excluding capitalised loan issue cost) are
repayable as follows:
31 March 31 March
2022 2021
EUR000 EUR000
-------------------------------------- -------- --------
On demand or within one year 20,411 10,724
In the second year 246,671 75,977
In the third to tenth years inclusive 728,475 385,331
-------------------------------------- -------- --------
Total 995,557 472,032
-------------------------------------- -------- --------
The Group has pledged 15 (2021: 42) investment properties to
secure several separate interest-bearing debt facilities granted to
the Group. The 15 (2021: 42) properties had a combined valuation of
EUR504,709,000 as at year end (2021: EUR1,101,689,000).
SEB AG
On 2 September 2015, the Group agreed to a facility agreement
with SEB AG for EUR59.0 million to refinance two existing Macquarie
loan facilities. The loan was scheduled to terminate on 1 September
2022. Amortisation was charged at 2% per annum with the remainder
scheduled to be due in the seventh year. The loan facility was
charged at a fixed interest rate of 1.84%. This facility was
secured over eleven property assets that were previously financed
through the Macquarie loan facilities. The facility was subject to
various covenants with which the Group had complied. The facility
was repaid in full during the year.
On 30 October 2017, the Group agreed to a second facility
agreement with SEB AG for EUR22.9 million. Tranche 1, totalling
EUR20.0 million, was hedged at a rate of 2.58% until 30 October
2024 by way of an interest rate swap. Tranche 2, totalling EUR2.9
million, was hedged at a rate of 2.56% until 30 October 2024 by way
of an interest rate swap. The loan was scheduled to terminate on 30
October 2024. Amortisation was 2.0% per annum across the full
facility with the remainder scheduled to be due in one instalment
on the final maturity date. The facility was secured over three
property assets and was subject to various covenants with which the
Group had complied. In addition, the Group agreed a capex facility
for EUR7.1 million until 30 October 2024. The capex facility was
not subject to amortisation and was charged with a floating
interest rate of 1.88% over six month EURIBOR (not less than 0%)
for the full term of the loan. The capex facility is no longer
available following the repayment of the SEB AG debt facilities
during the year.
On 26 March 2018, the Group agreed to a third facility agreement
with SEB AG for EUR38.0 million. The loan was scheduled to
terminate on 25 March 2025. Amortisation was 2% per annum with the
remainder scheduled to be due in one instalment on the final
maturity date. The loan facility was charged with a floating rate
of 1.58% over six month EURIBOR (not less than 0%) for the full
term of the loan. In accordance with the requirements of the loan
facility the Group hedged its exposure to floating interest rates
by purchasing a cap in June 2018 which limited the Group's interest
rate exposure on the facility to 2.33%. The facility was secured
over six property assets and was subject to various covenants with
which the Group had complied. In addition, the Group agreed a capex
facility for EUR8.0 million until 25 March 2025. The capex facility
was not subject to amortisation and was charged at an interest rate
of 1.58%. The capex facility was undrawn and is no longer available
following the repayment of the SEB AG debt facilities during the
twelve month period ended 31 March 2022.
Berlin Hyp AG/Deutsche Pfandbriefbank AG
On 31 March 2014, the Group agreed to a facility agreement with
Berlin Hyp AG and Deutsche Pfandbriefbank AG for EUR115.0 million.
Amortisation was 2% p.a. for the first two years, 2.5% for the
third year and 3.0% thereafter, with the remainder due in the fifth
year. Half of the facility (EUR55.2 million) was charged interest
at 3% plus three months' EURIBOR and was capped at 4.5%, and the
other half (EUR55.2 million) was hedged at a rate of 4.265% until
31 March 2019. This facility was secured over nine property assets
and was subject to various covenants with which the Group has
complied. On 28 April 2016, the Group agreed to refinance this
facility which had an outstanding balance of EUR110.4 million at 31
March 2016. The new facility was split in two tranches totalling
EUR137.0 million and was scheduled to terminate on 27 April 2023.
Tranche 1, totalling EUR94.5 million, was charged at a fixed
interest rate of 1.66% for the full term of the loan. Tranche 2,
totalling EUR42.5 million, was charged with a floating rate of
1.57% over three month EURIBOR (not less than 0%) for the full term
of the loan. Amortisation was set at 2.5% across the full facility
with the remainder scheduled to be due in one instalment on the
final maturity date.
On 30 June 2017, the Group repaid a total of EUR5.8 million
following the disposal of the Düsseldorf asset. On 30 September
2017, the Group repaid tranche 2 of the loan in full, amounting to
EUR40.9 million, following the disposal of the Munich Rupert Mayer
Strasse asset.
On 1 August 2019, the Group repaid a total of EUR16.8 million
including EUR10.1 million recorded within liabilities directly
associated with assets held for sale as at 31 March 2019, following
the disposal of two assets that acted as security for the loan into
the Titanium venture with AXA Investment Managers - Real
Assets.
The facility was repaid in full during the twelve month period
ended 31 March 2022.
Berlin Hyp AG
On 20 October 2016, the Group concluded an agreement with Berlin
Hyp AG to refinance and extend a facility which had an outstanding
balance of EUR39.2 million on 30 September 2016. The facility
totals EUR70.0 million and was scheduled to terminate on 29 October
2023. Amortisation was 2.5% per annum with the remainder due at
maturity. The facility was charged with an all-in fixed interest
rate of 1.48% for the full term of the loan. The facility was
secured over six property assets. The loan was subject to various
covenants with which the Group had complied. On 13 September 2019,
the facility was incorporated into the agreement as detailed below.
As a result, the maturity date of the loan was extended to 31
October 2023 with all other conditions remaining unchanged.
On 13 September 2019, the Group agreed to a facility agreement
with Berlin Hyp AG for EUR115.4 million. The loan terminates on 31
October 2023. Amortisation is 1.25% per annum with the remainder
due in the fourth year. The loan facility is charged at a fixed
interest rate of 0.90%. This facility is secured over nine property
assets. The facility is subject to various covenants with which the
Group has complied. No changes to the terms of the facility have
occurred during the twelve month period ended 31 March 2022.
Saarbrücken Sparkasse
On 28 March 2018, the Group agreed to a facility agreement with
Saarbrücken Sparkasse for EUR18.0 million. The loan terminates on
28 February 2025. Amortisation is 4.0% per annum with the remainder
due in one instalment on the final maturity date. The facility is
charged with an all-in fixed interest rate of 1.53% for the full
term of the loan. The facility is secured over one property asset
and is subject to various covenants with which the Group has
complied. No changes to the terms of the facility have occurred
during the twelve month period ended 31 March 2022.
Deutsche Pfandbriefbank AG
On 19 January 2019, the Group agreed to a facility agreement
with Deutsche Pfandbriefbank AG for EUR56.0 million. Tranche 1,
totalling EUR21.6 million, has been hedged at a rate of 1.40% until
31 December 2023 by way of an interest rate swap. A first drawdown
of tranche 3 totalling EUR0.5 million was charged at a fixed
interest rate of 1.20%. On 3 April 2019, tranche 2 was drawn down,
totalling EUR14.8 million, and has been hedged at a rate of 1.25%
until 31 December 2023 by way of an interest rate swap. On 28 June
2019, tranche 3 has been drawn down, totalling EUR19.1 million.
Tranche 3 has been hedged at a rate of 0.91% until 31 December 2023
by way of an interest rate swap. The facility is secured over five
property assets and is subject to various covenants with which the
Group has complied.
On 19 February 2020, the Group agreed to extend tranche 3 of its
existing facility by EUR6.5 million. The loan is coterminous with
the existing facility maturing in December 2023. The loan has been
treated as a new loan and is charged with a floating interest rate
of 1.20% plus three month EURIBOR (not less than 0%). Amortisation
is 2% per annum with the remainder due in one instalment on the
final maturity date. No changes to the terms of the facility have
occurred during the twelve month period ended 31 March 2022.
Schuldschein
On 2 December 2019, the Group agreed to new loan facilities in
the form of unsecured Schuldschein for EUR20.0 million. On 25
February 2020, the Group agreed new loan facilities in the form of
unsecured Schuldschein for EUR30.0 million. In total the unsecured
facility amounts to EUR50.0 million spread over five tranches and
is charged at a blended interest rate of 1.60% and average maturity
of 2.6 years with no amortisation. The Schuldschein is subject to
various covenants with which the Group has complied. No changes to
the terms of the facility have occurred during the twelve month
period ended 31 March 2022.
Corporate bond I
On 22 June 2021, the Group raised its inaugural corporate bond
for EUR400.0 million. The bond has a term of five years and an
interest rate of 1.125% due annually on its anniversary date, with
the principal balance coming due on 22 June 2026. The funds from
the bond have been partially utilised to repay the SEB AG and
Berlin Hyp AG/Deutsche Pfandbriefbank AG loans and fund
acquisitions. The corporate bond is subject to various covenants
with which the Group has complied. No changes to the terms of the
facility have occurred since the date of issuance.
Corporate bond II
On 24 November 2021, the Group issued its second corporate bond
for EUR300.0 million. The bond has a term of seven years and an
interest rate of 1.750% due annually on its anniversary date, with
the principal balance coming due on 24 November 2028. The funds
from the bond have been utilised to fund the BizSpace Group
acquisition and fund repayment of external loans held by BizSpace
Group amounting to EUR214.5 million at acquisition date. The
corporate bond is subject to various covenants with which the Group
has complied. No changes to the terms of the facility have occurred
since the date of issuance.
HSBC revolving credit facility
On 4 November 2021 the Company agreed a EUR75.0 million
bi-lateral revolving credit facility with HSBC Trinkaus &
Burkhardt. The loan facility is charged with a variable interest
rate tied to the Company's Fitch credit rating as follows: (a) BBB+
(1.2%), (b) BBB (1.2%) and (c) BBB- or lower (1.5%) with a 0%
EURIBOR floor. In addition, the facility's loan covenants are
consistent with the corporate bond covenants. The loan facility is
comprised of a (i) EUR25.0 million bilateral credit facility which
has a two year term and which may be extended twice for an
additional year per extension and (ii) a EUR50 million bilateral
top-up credit facility which is repayable in full six months after
draw down. The Company EUR50 million top-up credit facility was
drawn down and subsequently repaid in full during the period.
Group debt covenants
A summary of the Group's debt covenants is set out below:
31 March 31 March
2022 2021
EUR000 EUR000
--------------------------------------------------------- --------- ---------
Carrying amount of interest-bearing loans and borrowings
(note 24) 981,493 468,054
Unamortised borrowing costs 14,064 3,978
Book value of owned investment properties* 2,088,665 1,347,167
--------------------------------------------------------- --------- ---------
Gross loan to value ratio 47.7% 35.0%
--------------------------------------------------------- --------- ---------
* Includes assets held for sale.
Banking covenants vary according to each loan agreement and
typically include loan to value and income related covenants.
During the year, the Group did not breach any of its loan
covenants, nor did it default on any of its obligations under its
loan agreements.
Reconciliation of movements of liabilities arising from
financing activities:
Changes
31 March Acquisition in Other 31 March
2021 Cash flows New leases of a subsidiary fair values * 2022
EUR000 EUR000 EUR000 EUR000 EUR000 EUR000 EUR000
----------------------- -------- ---------- ---------- ---------------- ------------ -------- ---------
Interest-bearing loans
and borrowings 468,054 523,524 - - - (10,085) 981,493
Lease liabilities 14,987 (6,350) 18,413 12,182 (571) 38,661
Derivative financial
instruments 1,211 (544) (996) (329)
----------------------- -------- ---------- ---------- ---------------- ------------ -------- ---------
Total 484,252 516,630 18,413 12,182 (996) (10,656) 1,019,825
----------------------- -------- ---------- ---------- ---------------- ------------ -------- ---------
Changes
31 March Non-cash in Other 31 March
2020 Cash flows New leases settlement fair values * 2021
EUR000 EUR000 EUR000 EUR000 EUR000 EUR000 EUR000
----------------------- -------- ---------- ---------- ----------- ------------ ------- --------
Interest-bearing loans
and borrowings 480,228 (13,887) - - - 1,713 468,054
Lease liabilities 19,150 (5,681) 1,518 - - - 14,987
Derivative financial
instruments 1,368 - - - (157) - 1,211
----------------------- -------- ---------- ---------- ----------- ------------ ------- --------
Total 500,746 (19,568) 1,518 - (157) 1,713 484,252
----------------------- -------- ---------- ---------- ----------- ------------ ------- --------
* Changes in the capitalised finance charges on all loans,
foreign exchange differences and accretion of interest on lease
liabilities.
25. Financial risk management objectives and policies
The Group's principal financial liabilities comprise bank loans,
derivative financial instruments and trade payables. The main
purpose of these financial instruments is to raise finance for the
Group's operations. The Group has various financial assets, such as
trade receivables and cash, which arise directly from its
operations.
The main risks arising from the Group's financial instruments
are credit risk, liquidity risk, market risk, currency risk and
interest rate risk.
Credit risk
Credit risk arises when a failure by counterparties to discharge
their obligations could reduce the amount of future cash inflows
from financial assets on hand at the reporting date. The credit
risk on liquid funds is limited because the counterparties are
banks with high credit ratings assigned by international credit
rating agencies. The risk management policies employed by the Group
to manage these risks are discussed below.
In the event of a default by an occupational tenant, the Group
will suffer a rental shortfall and incur additional costs,
including expenses incurred to try and recover the defaulted
amounts and legal expenses in maintaining, insuring and marketing
the property until it is re-let. During the year, the Group
monitored the tenants in order to anticipate and minimise the
impact of defaults by occupational tenants, as well as to ensure
that the Group has a diversified tenant base. The credit risk on
tenants is also addressed through the performance of credit checks,
collection of deposits and regular communication with the
tenants.
Included in loans to associates are loans provided to associate
entities from Group entities. During the year the Group assessed
credit risk relating to loans to associates by reviewing business
plans and monitoring cash collection rates and the operational
performance of each associate in order to anticipate and minimise
the impact of any impairment.
Included in other receivables are lease incentives. During the
year the Group monitored tenants in order to anticipate and
minimise the impact of defaults and move-outs from tenants which
received lease incentives.
The carrying amount of financial assets represents the maximum
credit exposure. The maximum exposure to credit risk at the
reporting date was:
31 March 31 March
2022 2021
EUR000 EUR000
--------------------------------- -------- --------
Trade receivables 11,069 6,327
Other receivables 8,764 9,537
Loans to associates 44,278 43,154
Derivative financial instruments 329 70
Cash and cash equivalents 150,966 65,674
--------------------------------- -------- --------
Total 215,406 124,762
--------------------------------- -------- --------
Included in other receivables are guarantees and deposits in
amount of EUR4,052,000 (2021: EUR1,806,000).
The ageing of trade receivables at the statement of financial
position date was:
Year ended Year ended
31 March 2022 31 March 2021
------------------- -------------------
Gross Impairment Gross Impairment
EUR000 EUR000 EUR000 EUR000
----------------------- ------- ---------- ------- ----------
0-30 days 12,117 (2,704) 6,287 (1,936)
31-120 days (past due) 1,296 (406) 1,206 (585)
More than 120 days 5,378 (4,612) 4,265 (2,910)
----------------------- ------- ---------- ------- ----------
Total 18,791 (7,722) 11,758 (5,431)
----------------------- ------- ---------- ------- ----------
The movement in the allowance for impairment in respect of trade
receivables during the year was as follows:
31 March 31 March
2022 2021
EUR000 EUR000
---------------------------------------- -------- --------
Balance as at the beginning of the year (5,431) (3,640)
Expected credit loss recognised (2,291) (1,791)
---------------------------------------- -------- --------
Balance as at year end (7,722) (5,431)
---------------------------------------- -------- --------
The allowance account for trade receivables is used to record
impairment losses unless the Group believes that no recovery of the
amount owing is possible; at that point the amounts considered
irrecoverable are written off against the trade receivables
directly.
Most trade receivables are generally due one month in advance.
The exception is service charge balancing billing, which is due ten
days after it has been invoiced. Included in the Group's trade
receivables are debtors with carrying amounts of EUR11,069,000
(2021: EUR6,327,000) that are past due at the reporting date for
which the Group has not provided significant impairment as there
has not been a significant change in credit quality and the amounts
are still considered recoverable.
No significant impairment has been recognised relating to
non-current receivables in the period due to unchanged credit
quality and the amounts are still considered recoverable.
Liquidity risk
Liquidity risk is the risk that arises when the maturity of
assets and liabilities does not match. An unmatched position
potentially enhances profitability but can also increase the risk
of losses. The Group has procedures with the objective of
minimising such losses, such as maintaining sufficient cash and
other highly liquid current assets and having available an adequate
amount of committed credit facilities. The Group prepares cash flow
forecasts and continually monitors its ongoing commitments compared
to available cash. Cash and cash equivalents are placed with
financial institutions on a short-term basis which allows immediate
access. This reflects the Group's desire to maintain a high level
of liquidity in order to meet any unexpected liabilities that may
arise due to the current financial position. Similarly, accounts
receivable are due either in advance (e.g. rents and recharges) or
within ten days (e.g. service charge reconciliations), further
bolstering the Group's management of liquidity risk.
The table below summarises the maturity profile of the Group's
financial liabilities, based on contractual undiscounted
payments:
Derivative Trade
Bank financial and other Lease
loans instruments payables liabilities Total
31 March 2022 EUR000 EUR000 EUR000 EUR000 EUR000
----------------------------- ----------- ------------ ---------- ------------ -----------
Undiscounted amounts payable
in:
6 months or less (9,520) (119) (56,329) (1,311) (67,279)
6 months-1 year (24,486) (118) - (789) (25,393)
1-2 years (258,758) (232) - (2,910) (261,900)
2-5 years (454,658) (58) - (9,001) (463,717)
5-10+ years (308,688) - - (92,307) (400,995)
----------------------------- ----------- ------------ ---------- ------------ -----------
(1,056,110) (527) (56,329) (106,318) (1,219,284)
Interest 60,553 527 - 67,657 128,737
----------------------------- ----------- ------------ ---------- ------------ -----------
(995,557) - (56,329) (38,661) (1,090,547)
----------------------------- ----------- ------------ ---------- ------------ -----------
Derivative Trade
Bank financial and other Lease
loans instruments payables liabilities Total
31 March 2021 EUR000 EUR000 EUR000 EUR000 EUR000
----------------------------- --------- ------------ ---------- ------------ ---------
Undiscounted amounts payable
in:
6 months or less (8,755) (220) (26,851) (3,047) (38,873)
6 months-1 year (8,588) (216) - (3,048) (11,852)
1-2 years (81,895) (426) - (1,492) (83,813)
2-5 years (389,971) (435) - (2,428) (392,834)
5-10+ years - - - (7,223) (7,223)
----------------------------- --------- ------------ ---------- ------------ ---------
(489,209) (1,297) (26,851) (17,238) (534,595)
Interest 17,177 1,297 - 2,251 20,725
----------------------------- --------- ------------ ---------- ------------ ---------
(472,032) - (26,851) (14,987) (513,870)
----------------------------- --------- ------------ ---------- ------------ ---------
Currency risk
The Group's exposure to currency risk relates primarily to the
Group's exposure to the British pound and to a lesser extent the
South African rand. This exposure is driven primarily by the
acquisition of the BizSpace Group as detailed in Note 4. In
addition thereto, the Group has dividend obligations in both the
British Pound and South African rand. The foreign currency risk in
relation to the British pound is mitigated as a result of the
BizSpace Group generating British pound denominated income in order
to fund its obligations when they come due and, in addition, the
Group's British pound dividend obligations. The Group holds small
deposits in South African rand for the purposes of working capital
and dividend obligations.
Interest rate risk
The Group's exposure to interest rate risk relates primarily to
the Group's long-term floating rate debt obligations. The Group's
policy is to mitigate interest rate risk by ensuring that a minimum
of 80% of its total borrowing is at fixed or capped interest rates
by taking out fixed rate loans or derivative financial instruments
to hedge interest rate exposure, or interest rate caps.
A change in interest will only have an impact on loans fixed by
a swap. An increase of 100 bps in interest rate would result in a
decreased post tax profit in the consolidated income statement of
EUR275,000 (2021: EUR562,000) (excluding the movement on derivative
financial instruments) and a decrease of 100 bps in interest rate
would result in an increased post tax profit in the consolidated
income statement of EUR275,000 (2021: EUR562,000) (excluding the
movement on derivative financial instruments).
The following table sets out the carrying amount, by maturity,
of the Group's financial instruments that are exposed to interest
rate risk:
Within
1 year 1-2 years 2-3 years 3-4 years 4+ years Total
31 March 2022 EUR000 EUR000 EUR000 EUR000 EUR000 EUR000
--------------------------- -------- --------- --------- --------- -------- --------
Deutsche Pfandbriefbank AG (140) (6,241) - - - (6,381)
Schuldschein (15,000) - (5,000) - - (20,000)
--------------------------- -------- --------- --------- --------- -------- --------
Within
1 year 1-2 years 2-3 years 3-4 years 4+ years Total
31 March 2021 EUR000 EUR000 EUR000 EUR000 EUR000 EUR000
--------------------------- ------- --------- --------- --------- -------- --------
SEB AG - capped (760) (760) (760) (33,440) - (35,720)
SEB AG - floating - - - (2,000) - (2,000)
Deutsche Pfandbriefbank AG (140) (140) (6,241) - - (6,521)
Schuldschein - (15,000) - (5,000) - (20,000)
--------------------------- ------- --------- --------- --------- -------- --------
The other financial instruments of the Group that are not
included in the above tables are non-interest bearing or have fixed
interest rates and are therefore not subject to interest rate
risk.
Market risk
The Group's activities are within the real estate market,
exposing it to very specific industry risks.
The yields available from investments in real estate depend
primarily on the amount of revenue earned and capital appreciation
generated by the relevant properties, as well as expenses incurred.
If properties do not generate sufficient revenues to meet operating
expenses, including debt service and capital expenditure, the
Group's revenue will be adversely affected.
Revenues from properties may be adversely affected by: the
general economic climate; local conditions, such as an oversupply
of properties, or a reduction in demand for properties, in the
market in which the Group operates; the attractiveness of the
properties to the tenants; the quality of the management;
competition from other available properties; and increased
operating costs.
In addition, the Group's revenue would be adversely affected if
a significant number of tenants were unable to pay rent or its
properties could not be rented on favourable terms. Certain
significant expenditures associated with each equity investment in
real estate (such as external financing costs, real estate taxes
and maintenance costs) are generally not reduced when circumstances
cause a reduction in revenue from properties. By diversifying in
product, risk categories and tenants, the Group expects to lower
the risk profile of the portfolio.
Capital management
For the purpose of the Group's capital management, capital
includes all equity reserves attributable to the equity holders of
the parent. The Group seeks to enhance shareholder value both by
investing in the business so as to improve the return on investment
and by managing the capital structure. The Group manages its
capital structure and in doing so takes into consideration the
impact of changes in economic conditions. The Group assesses its
capital management through the total accounting shareholder return
which was 20.0% as at 31 March 2022 (31 March 2021: 19.5%) and the
net loan to value which was 41.6% as at 31 March 2022 (31 March
2021: 31.4%).
To maintain or adjust the capital structure, the Group may
undertake a number of actions including but not limited to share
issuances and changes to its distribution policy to shareholders.
The transfer of amounts recorded in share capital to other
distributable reserves is made in accordance with The Companies
(Guernsey) Law, 2008. The Group's distribution policy takes into
account the concept of solvency under The Companies (Guernsey) Law,
2008. The Group is not subject to externally imposed capital
requirements other than those related to the covenants of the bank
loan facilities. There have been no breaches of the financial
covenants of any interest-bearing loans and borrowings in the
current period.
26. Financial instruments
Fair values
Set out below is a comparison by category of carrying amounts
and fair values of all of the Group's financial instruments that
are carried in the financial statements (excluding assets held for
sale and liabilities directly associated with assets held for
sale):
31 March 2022 31 March 2021
----------------- -----------------
Fair value Carrying Fair Carrying Fair
hierarchy amount value amount value
level EUR000 EUR000 EUR000 EUR000
--------------------------------- ---------- -------- ------- -------- -------
Financial assets
Cash and cash equivalents 150,966 150,966 65,674 65,674
Trade and other receivables 19,833 19,833 15,864 15,864
Loans to associates 2 44,278 44,278 43,154 43,154
Derivative financial instruments 2 329 329 70 70
--------------------------------- ---------- -------- ------- -------- -------
Financial liabilities
Trade and other payables 56,329 56,329 26,851 26,851
Derivative financial instruments 2 - - 1,211 1,211
Interest-bearing loans and
borrowings(1)
Floating rate borrowings 2 26,381 26,381 28,521 28,521
Floating rate borrowings
- hedged(2) 2 52,167 52,167 75,060 75,060
Floating rate borrowings
- capped 2 - - 35,720 35,720
Fixed rate borrowings 2 917,009 939,238 332,731 336,216
--------------------------------- ---------- -------- ------- -------- -------
All amounts in the table above are carried at amortised cost
except for derivative financial instruments which are held at fair
value.
(1) Excludes loan issue costs.
(2) The Group holds interest rate swap contracts designed to
manage the interest rate and liquidity risks of expected cash flows
of its borrowings with the variable rate facilities with Deutsche
Pfandbriefbank AG. Please refer to note 24 for details of swap
contracts.
Fair value hierarchy
For financial assets or liabilities measured at amortised cost
and whose carrying value is a reasonable approximation to fair
value there is no requirement to analyse their value in the fair
value hierarchy.
The below analyses financial instruments measured at fair value
into a fair value hierarchy based on the valuation technique used
to determine fair value:
Level 1: quoted prices (unadjusted) in active markets for
identical assets or liabilities;
Level 2: inputs other than quoted prices included within Level 1
that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3: inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
The Group holds interest rate swap contracts which are reset on
a quarterly basis. The fair value of interest rate swaps is based
on broker quotes. Those quotes are tested for reasonableness by
discounting estimated future cash flows based on the terms and
maturity of each contract and using market interest rates for a
similar instrument at the measurement date. The average interest
rate is based on the outstanding balances at the end of the
reporting period. The interest rate swap is measured at fair value
with changes recognised in profit or loss.
The fair values of the loans and borrowings have been calculated
based on a discounted cash flow model using the prevailing market
rates of interest.
27. Issued share capital
Share
Number capital
Authorised of shares EUR
------------------------------------- ---------- --------
Ordinary shares of no par value Unlimited -
------------------------------------- ---------- --------
As at 31 March 2022 and 31 March 2021 Unlimited -
------------------------------------- ---------- --------
Share
Number capital
Issued and fully paid of shares EUR
------------------------------------------------- ------------- -------------
As at 31 March 2020 1,036,257,101 -
Issued ordinary shares 14,447,046 13,169,000
Transfer of share capital to other distributable
reserves - (13,169,000)
Shares issued to Employee Benefit Trust (1,883,980) -
Shares allocated by the Employee Benefit Trust 312,092 -
------------------------------------------------- ------------- -------------
As at 31 March 2021 1,049,132,259 -
Issued ordinary shares 119,344,125 167,380,000
Transfer of share capital to other distributable
reserves - (167,380,000)
Shares issued to Employee Benefit Trust (3,557,745) -
Shares allocated by the Employee Benefit Trust 1,962,045 -
------------------------------------------------- ------------- -------------
As at 31 March 2022 1,166,880,684 -
------------------------------------------------- ------------- -------------
Holders of the ordinary shares are entitled to receive dividends
and other distributions and to attend and vote at any general
meeting. Shares held in treasury are not entitled to receive
dividends or to vote at general meetings.
Pursuant to a scrip dividend offering on 14 June 2021, the
Company issued 8,101,162 ordinary shares at an issue price of
GBP1.00432 resulting in the Company's overall issued share capital
being 1,064,184,239 ordinary shares.
Pursuant to an equity raise of EUR159.9 million on 12 November
2021, the Company issued 105,281,686 ordinary shares at an issue
price of GBP1.30, resulting in the Company's overall issued share
capital being 1,169,465,925 ordinary shares. Costs associated with
the equity raise amounted to EUR6,219,000.
Pursuant to a scrip dividend offering on 29 November 2021, the
Company issued 2,695,067 ordinary shares at an issue price of
GBP1.37726 resulting in the Company's overall issued share capital
being 1,172,160,992 ordinary shares.
In addition, during the year the Company issued 3,266,210 shares
in relation to the exercise of the LTIP 2019 (January 2019 grant)
as per note 9.
Treasury shares held by the Employee Benefit Trust are disclosed
as own shares held. During the year 3,557,745 shares were acquired
and 1,962,045 were allocated by the Employee Benefit Trust. A total
of 5,280,308 own shares purchased at an average share price of
EUR1.1882 are held by the Employee Benefit Trust (2021: 3,684,608
own shares purchased at an average share price of EUR0.7878). The
total number of shares with voting rights was 1,172,160,992 (2021:
1,052,816,867). No votes are cast in respect of the shares held in
the Employee Benefit Trust in connection with the Company's share
plans and dividends paid and payable are subject to a standing
waiver.
All shares issued in the year were issued under general
authority. No shares were bought back in the year (2021: none) and
there are no Treasury Shares held directly by the parent company at
the year end (2021: none).
28. Other reserves
Other distributable reserve
The other distributable reserve was created for the payment of
dividends and the transfer of share capital in regard to scrip
dividends, share-based payment transactions and the buyback of
shares and is EUR570,369,000 in total at year end (2021:
EUR449,051,000).
29. Dividends
On 1 June 2020, the Company announced a dividend of 1.80c per
share, with a record date of 10 July 2020 for UK and South African
shareholders and payable on 20 August 2020. On the record date,
1,038,369,821 shares were in issue with none held in treasury and
1,038,369,821 (including shares held by the EBT) were entitled to
participate in the dividend. Holders of 335,705,489 shares elected
to receive the dividend in ordinary shares under the scrip dividend
alternative, representing a dividend of EUR6,043,000 (EUR5,830,000
as at settlement date), while holders of 700,213,704 shares opted
for a cash dividend with a value of EUR12,603,000. The Company's
Employee Benefit Trust waived its rights to the dividend, reducing
the cash payable to EUR12,595,000 (EUR12,595,000 as at settlement
date). The total dividend was EUR18,646,000.
On 30 November 2020, the Company announced a dividend of 1.82c
per share, with a record date of 18 December 2020 for UK and South
African shareholders and payable on 21 January 2021. On the record
date, 1,045,351,272 shares were in issue. Since there were no
shares held in treasury, 1,045,351,272 (including shares held by
the EBT) shares were entitled to participate in the dividend.
Holders of 403,075,659 shares elected to receive the dividend in
ordinary shares under the scrip dividend alternative, representing
a dividend of EUR7,336,000 (EUR7,339,000 as at settlement date)
while holders of 638,591,005 shares opted for a cash dividend with
a value of EUR11,622,000. The Company's Employee Benefit Trust
waived its rights to the dividend, reducing the cash payable to
EUR11,555,000 (EUR11,653,000 as at settlement date). The total
dividend was EUR18,958,000.
On 7 June 2021, the Company announced a dividend of 1.98c per
share, with a record date of 9 July 2021 for UK and South African
shareholders and payable on 19 August 2021. On the record date,
1,054,755,527 shares were in issue. Since there were no shares held
in treasury, 1,054,755,527 shares (including shares held by the
Employee Benefit Trust) were entitled to participate in the
dividend. Holders of 476,206,726 shares elected to receive the
dividend in ordinary shares under the scrip dividend alternative,
representing a dividend of EUR9,429,000 (EUR9,195,000 as at
settlement date) while holders of 578,548,801 shares opted for a
cash dividend with a value of EUR11,455,000. The Company's Employee
Benefit Trust waived its rights to the dividend, reducing the cash
payable to EUR11,388,000 (EUR11,381,000 as at settlement date). The
total dividend was EUR20,817,000 (EUR20,576,000 as at settlement
date).
On 8 November 2021, the Company announced a dividend of 2.04c
per share, with a record date of 17 December 2021 for UK and South
African shareholders and payable on 20 January 2022. On the record
date, 1,169,465,925 shares were in issue. Since there were no
shares held in treasury, 1,169,465,925 shares (including shares
held by the Employee Benefit Trust) were entitled to participate in
the dividend. Holders of 216,062,440 shares elected to receive the
dividend in ordinary shares under the scrip dividend alternative,
representing a dividend of EUR4,408,000 (EUR4,478,000 as at
settlement date) while holders of 953,403,485 shares opted for a
cash dividend with a value of EUR19,449,000. The Company's Employee
Benefit Trust waived its rights to the dividend, reducing the cash
payable to EUR19,373,000 (EUR19,434,000 as at settlement date). The
total dividend was EUR23,781,000 (EUR23,912,000 as at settlement
date).
The Group's profit attributable to the equity holders of the
Company for the year was EUR147.9 million (2021: EUR147.5 million).
The Board has authorised a dividend in respect of the second half
of the financial year ended 31 March 2022 of 2.37c per share
representing 65% of FFO, an increase of 19.7% on the equivalent
dividend last year, which represented 65% of FFO(1). The total
dividend for the year is 4.41c, an increase of 16.1% on the 3.80c
total dividend for the year ended 31 March 2021.
It is expected that, for the dividend authorised relating to the
six month period ended 31 March 2022, the ex-dividend date will be
6 July 2022 for shareholders on the South African register and 7
July 2022 for shareholders on the UK register. It is further
expected that for shareholders on both registers the record date
will be 8 July 2022 and the dividend will be paid on 18 August
2022. A detailed dividend announcement was made on 20 June 2022,
including details of a scrip dividend alternative.
The dividend paid per the statement of changes in equity is the
value of the cash dividend.
(1) Adjusted profit before tax adjusted for foreign exchange
effects, depreciation and amortisation (excluding depreciation
relating to IFRS 16), amortisation of financing fees, adjustments
in respect of IFRS 16 and current tax receivable/incurred and
current tax relating to disposals.
The dividend per share was calculated as follows:
Year ended Year ended
31 March 31 March
2022 2021
EURm EURm
------------------------------------------------------ ---------- ----------
Reported profit before tax 168.9 163.7
Adjustments for:
Gain on revaluation of investment properties (140.9) (99.6)
Deficit on revaluation expense relating to leased
investment properties (5.6) (4.3)
Loss/(gain) of disposals of properties 0.6 (0.1)
Recoveries from prior disposals of subsidiaries (0.1) (0.1)
Deduct revaluation gain on investment property from
associates and related tax (4.8) (3.3)
Other adjusting items(1) 19.1 4.1
Goodwill impairment 40.9 -
Change in fair value of financial derivatives (1.0) (0.1)
------------------------------------------------------ ---------- ----------
Adjusted profit before tax 77.1 60.3
Adjustments for:
Foreign exchange effects(2) (1.9) -
Depreciation and amortisation (excluding depreciation
relating to IFRS 16) 2.3 1.6
Amortisation of financing fees 2.6 1.7
Adjustment in respect of IFRS 16 0.6 (0.9)
Current taxes incurred (see note 11) (6.1) (1.9)
Add back current tax relating to disposals - 0.1
------------------------------------------------------ ---------- ----------
Funds from operations, year ended 31 March 74.6 60.9
------------------------------------------------------ ---------- ----------
Funds from operations, 6 months ended 30 September 33.0 29.1
------------------------------------------------------ ---------- ----------
Funds from operations, 6 months ended 31 March 41.6 31.8
------------------------------------------------------ ---------- ----------
Dividend pool, 6 months ended 30 September 21.6 19.0
------------------------------------------------------ ---------- ----------
Dividend pool, 6 months ended 31 March(3) 27.6 20.7
------------------------------------------------------ ---------- ----------
Dividend per share, 6 months ended 30 September 2.04c 1.82c
------------------------------------------------------ ---------- ----------
Dividend per share, 6 months ended 31 March 2.37c 1.98c
------------------------------------------------------ ---------- ----------
(1) Includes the effect of exceptional items, refinancing
activity, share awards and expected selling costs relating to
assets held for sale. See note 12 for details.
(2) Management decided to exclude foreign exchange effects from
the funds from operations calculation (2021: EURnil).
(3) Calculated as 65% of FFO of 3.64c per share (2021: 3.04c per
share using 65% of FFO) based on average number of shares
outstanding of 1,141,807,790 (2021: 1,044,538,046).
For more information on adjusted profit before tax and funds
from operations refer to Annex 1.
Calculations contained in this table are subject to rounding
differences.
30. Related parties
Fees paid to people considered to be key management personnel of
the Group during the year include:
Year ended Year ended
31 March 31 March
2022 2021
EUR000 EUR000
----------------------------- ---------- ----------
Directors' fees 530 437
Salary and employee benefits 4,294 3,531
Share-based payments 2,643 2,623
----------------------------- ---------- ----------
Total 7,467 6,591
----------------------------- ---------- ----------
The share-based payments relating to key management personnel
for the year include an expense of EUR2,643,000 (2021:
EUR2,623,000) for the granting of shares under the LTIP (see note
8). Included within salary and employee benefits are pension
contributions amounting to EUR180,000 (2021: EUR146,000).
Information on Directors' emoluments is given in the
Remuneration report on pages 91 to 112. Related parties are defined
as those persons and companies that control the Group, or that are
controlled, jointly managed or subject to significant influence by
the Group.
The following balances and transactions with associates exist as
at the reporting date:
31 March 31 March
2022 2021
Consolidated statement of financial position EUR000 EUR000
--------------------------------------------- -------- --------
Loans to associates 44,278 43,154
Trade and other receivables 2,527 3,371
--------------------------------------------- -------- --------
Total 46,805 46,525
--------------------------------------------- -------- --------
Trade and other receivables relate to amounts owed from the
services supplied to the associates and are due to be settled in
the normal course of business.
As a result of unchanged credit quality no material impairments
have been recognised in the year.
Year ended Year ended
31 March 31 March
2022 2021
Consolidated income statement EUR000 EUR000
------------------------------ ---------- ----------
Services supplied 13,153 7,338
Interest income 2,891 2,674
------------------------------ ---------- ----------
Total 16,044 10,012
------------------------------ ---------- ----------
Services provided to related parties primarily relate to the
provision of property and asset management services. A performance
fee arrangement is in place between the associates and the Group.
The performance fee was EURnil during the year (2021: EURnil).
31. Capital and other commitments
As at year end, the Group had contracted capital expenditure for
development and enhancements on existing properties of EUR7,846,000
(2021: EUR8,666,000) and capital commitments in relation to the
notarised asset in Düsseldorf of EUR35,300,000.
These were committed but not yet provided for in the financial
statements.
32. Operating lease arrangements
Group as lessor
All properties leased by the Group are under operating leases
and the future minimum lease payments receivable under
non-cancellable leases are as follows:
31 March 31 March
2022 2021
EUR000 EUR000
------------------ -------- --------
Less than 1 year 118,118 84,417
1-2 years 96,086 61,549
2-3 years 75,726 41,491
3-4 years 57,676 33,044
4-5 years 35,616 18,792
More than 5 years 68,566 35,211
------------------ -------- --------
Total 451,788 274,504
------------------ -------- --------
The Group leases out its investment properties under operating
leases. Most operating leases are for terms of one to ten
years.
The Group consists of 122 subsidiary companies (2021: 94
subsidiary companies). All subsidiaries are consolidated in full in
accordance with IFRS. The principal activity of the subsidiaries is
the investment in, and development of, commercial property to
provide conventional and flexible workspace in Germany and UK. The
acquired subsidiaries in the UK have aligned their reporting period
to the Group's reporting period.
Ownership Ownership
at at
31 March 31 March
Country 2022 2021
Company name of incorporation % %
--------------------------------------------------------- ------------------ --------- ---------
BizSpace Acquisitions Ltd Jersey 100.00 n/a
BizSpace Developments Ltd UK 100.00 n/a
BizSpace Green Holdings Ltd UK 100.00 n/a
BizSpace Green Operations Ltd UK 100.00 n/a
BizSpace Holdings Ltd UK 100.00 n/a
BizSpace II Ltd UK 100.00 n/a
BizSpace Ltd UK 100.00 n/a
BizSpace Property 100 Ltd Jersey 100.00 n/a
BizSpace Property I Ltd UK 100.00 n/a
BizSpace Property SSP Ltd UK 100.00 n/a
Curris Facilities & Utilities Management
GmbH Germany 100.00 100.00
DDS Aspen B.V. Netherlands 100.00 100.00
DDS Bagnut B.V. Netherlands 100.00 100.00
DDS Business Centres B.V. Netherlands 100.00 100.00
DDS Coconut B.V. Netherlands 100.00 100.00
DDS Conferencing & Catering GmbH Germany 100.00 100.00
DDS Elm B.V. Netherlands 100.00 100.00
DDS Fir B.V. Netherlands 100.00 100.00
DDS Hawthorn B.V. Netherlands 100.00 100.00
DDS Hazel B.V. Netherlands 100.00 100.00
DDS Hyacinth B.V. Netherlands 100.00 100.00
DDS Lark B.V. Netherlands 100.00 100.00
DDS Mulberry B.V. Netherlands 100.00 100.00
DDS Rose B.V. Netherlands 100.00 100.00
DDS Walnut B.V. Netherlands 100.00 100.00
DDS Yew B.V. Netherlands 100.00 100.00
Helix FinCo Ltd Jersey 100.00 n/a
Helix Investments Ltd* Jersey 100.00 n/a
Helix Property Ltd Jersey 100.00 n/a
LB(2) Catering and Services GmbH Germany 100.00 100.00
M25 Business Centres Ltd UK 100.00 n/a
Marba Apple B.V. Netherlands 100.00 100.00
Marba Bamboo B.V. Netherlands 100.00 100.00
Marba Cherry B.V. Netherlands 100.00 100.00
Marba Daffodil B.V. Netherlands 100.00 100.00
Marba Holland B.V.* Netherlands 100.00 100.00
Marba Lavender B.V. Netherlands 100.00 100.00
Marba Mango B.V. Netherlands 100.00 100.00
Marba Olive B.V. Netherlands 100.00 100.00
Marba Sunflower B.V. Netherlands 100.00 100.00
Marba Violin B.V. Netherlands 100.00 100.00
Marba Willstätt B.V. Netherlands 100.00 100.00
SFG NOVA Construction and Services GmbH Germany 100.00 100.00
Sirius Alder B.V. Netherlands 100.00 100.00
Sirius Aloe GmbH & Co. KG Germany 100.00 100.00
Sirius Ash B.V. Netherlands 100.00 100.00
Sirius Aster GmbH & Co. KG Germany 100.00 100.00
Sirius Beech B.V. Netherlands 100.00 100.00
Sirius Birch GmbH & Co. KG Germany 100.00 100.00
Sirius Coöperatief B.A.* Netherlands 100.00 100.00
Sirius Dahlia GmbH & Co. KG Germany 100.00 100.00
Sirius Facilities (UK) Ltd* UK 100.00 100.00
Sirius Facilities GmbH Germany 100.00 100.00
Sirius Finance (Cyprus) Ltd.* Cyprus 100.00 100.00
Sirius Four B.V. Netherlands 100.00 100.00
Sirius Frankfurt Erste GmbH & Co. KG Germany 100.00 100.00
Sirius Frankfurt Zweite GmbH & Co. KG Germany 100.00 n/a
Sirius Gum B.V. Netherlands 100.00 100.00
Sirius Ivy B.V. Netherlands 100.00 100.00
Sirius Jasmine GmbH & Co. KG Germany 100.00 n/a
Sirius Juniper B.V. Netherlands 100.00 100.00
Sirius Kale GmbH & Co. KG Germany 100.00 n/a
Sirius Krefeld Erste GmbH & Co. KG Germany 100.00 100.00
Sirius Lily B.V. Netherlands 100.00 100.00
Sirius Lotus GmbH & Co. KG Germany 100.00 n/a
Sirius Management One GmbH Germany 100.00 100.00
Sirius Management Two GmbH Germany 100.00 100.00
Sirius Management Three GmbH Germany 100.00 100.00
Sirius Management Four GmbH Germany 100.00 100.00
Sirius Management Five GmbH Germany 100.00 100.00
Sirius Management Six GmbH Germany 100.00 100.00
Sirius Management Seven GmbH Germany 100.00 100.00
Sirius Management Eight GmbH Germany 100.00 100.00
Sirius Management Nine GmbH Germany 100.00 100.00
Sirius Management Ten GmbH Germany 100.00 100.00
Sirius Mannheim B.V. Netherlands 100.00 100.00
Sirius Narcissus GmbH & Co. KG Germany 100.00 n/a
Sirius Oak B.V. Netherlands 100.00 100.00
Sirius One B.V. Netherlands 100.00 100.00
Sirius Orange B.V. Netherlands 100.00 100.00
Sirius Palm B.V. Netherlands 100.00 n/a
Sirius Pear B.V. Netherlands 100.00 100.00
Sirius Pepper GmbH & Co. KG Germany 100.00 n/a
Sirius Pine B.V. Netherlands 100.00 100.00
Sirius Tamarack B.V. Netherlands 100.00 100.00
Sirius Three B.V. Netherlands 100.00 100.00
Sirius Thyme B.V. Netherlands 100.00 n/a
Sirius Tulip B.V. Netherlands 100.00 100.00
Sirius Two B.V. Netherlands 100.00 100.00
Sirius UK1 Ltd* UK 100.00 n/a
Sirius UK2 Ltd* UK 100.00 n/a
Sirius Willow B.V. Netherlands 100.00 100.00
Marba Bonn B.V. Netherlands 99.73 99.73
Marba Bremen B.V. Netherlands 99.73 99.73
Marba Brinkmann B.V. Netherlands 99.73 99.73
Marba Catalpa B.V. Netherlands 99.73 99.73
Marba Cedarwood B.V. Netherlands 99.73 99.73
Marba Chestnut B.V. Netherlands 99.73 99.73
Marba Dutch Holdings B.V. Netherlands 99.73 99.73
Marba Foxglove B.V. Netherlands 99.73 99.73
Marba HAG B.V. Netherlands 99.73 99.73
Marba Hornbeam B.V. Netherlands 99.73 99.73
Marba Königswinter B.V. Netherlands 99.73 99.73
Marba Maintal B.V. Netherlands 99.73 99.73
Marba Marigold B.V. Netherlands 99.73 99.73
Marba Merseburg B.V. Netherlands 99.73 99.73
Marba Mimosa B.V. Netherlands 99.73 99.73
Marba Regensburg B.V. Netherlands 99.73 99.73
Marba Saffron B.V. Netherlands 99.73 99.73
Marba Troisdorf B.V. Netherlands 99.73 99.73
Sirius Acerola GmbH & Co. KG Germany 99.73 99.73
Sirius Almond GmbH & Co. KG Germany 99.73 99.73
Sirius Bluebell GmbH & Co. KG Germany 99.73 99.73
Sirius Cypress GmbH & Co. KG Germany 99.73 99.73
Sirius Grape GmbH & Co. KG Germany 99.73 100.00
Sirius Hibiscus GmbH & Co. KG Germany 99.73 n/a
Sirius Indigo GmbH & Co. KG Germany 99.73 n/a
Sirius Mayflower GmbH & Co. KG Germany 99.73 n/a
Sirius Oyster GmbH & Co. KG Germany 99.73 n/a
Sirius Administration One GmbH & Co KG Germany 94.80 94.80
Sirius Administration Two GmbH & Co KG Germany 94.80 94.80
Verwaltungsgesellschaft Gewerbepark Bilderstöckchen
GmbH Germany 94.15 94.15
--------------------------------------------------------- ------------------ --------- ---------
* Subsidiary company directly held by the parent entity, Sirius Real Estate Limited.
Investment in associates which are accounted for with the equity
method:
Ownership Ownership
at at
31 March 31 March
Country 2022 2021
Company name of incorporation % %
--------------------- ------------------ --------- ---------
DDS Daisy B.V. Netherlands 35.00 35.00
DDS Edelweiss B.V. Netherlands 35.00 35.00
DDS Lime B.V. Netherlands 35.00 35.00
DDS Maple B.V. Netherlands 35.00 35.00
Sirius Boxwood B.V. Netherlands 35.00 35.00
Sirius Laburnum B.V. Netherlands 35.00 35.00
Sirius Orchid B.V. Netherlands 35.00 35.00
--------------------- ------------------ --------- ---------
34. Post balance sheet events
The Group converted the UK business into a REIT with effect from
1 April 2022, resulting in the BizSpace Group no longer being
subject to UK corporation tax on income from its property rental
business, as well as on profits on disposals of assets.
On 29 October 2021, the Company notarised for the disposal of an
asset in Magdeburg for a sale price of EUR13.8 million. The
transaction completed on 1 April 2022.
On 1 May 2022, the Group completed the acquisition of an office
building adjacent to and integrated into its existing business park
in Potsdam. Total acquisition costs are expected to be EUR0.8
million. The property is 100% vacant and has a gross lettable area
of 239 sqm.
On 16 May 2022 the Group notarised the sale of an asset in
Camberwell, London, for GBP16.0 million (EUR18.9 million). The
multi-tenanted business park, which comprises approx. 34,700 sq ft
(3,224 sqm) of industrial and office space, is 91% occupied. The
sale is expected to complete in July 2022.
Business analysis (Unaudited Information)
Non-IFRS measures
Year ended Year ended
31 March 31 March
2022 2021
EUR000 EUR000
--------------------------------------------------------- ---------- ----------
Total profit for the year attributable to the owners
of the Company 147,873 147,451
Gain on revaluation of investment properties (140,884) (99,585)
Loss on disposal of properties (net of related
tax) 623 33
Recoveries from prior disposals of subsidiaries
(net of related tax) (94) (65)
Add finance restructuring costs 7,821 -
Goodwill impairment 40,906 -
Acquisition costs in relation to business combinations 5,299 -
Change in fair value of derivative financial instruments (996) (136)
Deferred tax in respect of EPRA earnings adjustments 14,827 14,180
NCI in respect of the above 85 82
Deduct revaluation surplus relating to investment
in associates (6,021) (4,199)
Tax in relation to the above 1,256 872
EPRA earnings 70,695 58,633
(Deduct)/add change in deferred tax relating to
derivative financial instruments (203) 79
Add change in fair value of derivative financial
instruments 996 136
Deduct finance restructuring costs (7,821) -
Deduct acquisition costs in relation to business
combinations (5,299) -
NCI in respect of the above - -
--------------------------------------------------------- ---------- ----------
Headline earnings after tax 58,368 58,848
Deduct change in fair value of derivative financial
instruments (net of related tax) (793) (215)
Deduct revaluation expense relating to leased investment
properties (5,572) (4,325)
Add adjusting items(1) (net of related tax) 19,122 4,092
--------------------------------------------------------- ---------- ----------
Adjusted earnings after tax 71,125 58,400
--------------------------------------------------------- ---------- ----------
(1) See note 12 to the financial statements.
For more information on EPRA earnings refer to Annex 1.
Year ended Year ended
31 March 31 March
2022 2021
EUR000 EUR000
------------------------------------------- ------------- -------------
EPRA earnings 70,695 58,633
Weighted average number of ordinary shares 1,097,082,162 1,040,956,722
------------------------------------------- ------------- -------------
EPRA earnings per share (cents) 6.44 5.63
------------------------------------------- ------------- -------------
Headline earnings after tax 58,368 58,848
Weighted average number of ordinary shares 1,097,082,162 1,040,956,722
------------------------------------------- ------------- -------------
Headline earnings per share (cents) 5.32 5.65
------------------------------------------- ------------- -------------
Adjusted earnings after tax 71,125 58,400
Weighted average number of ordinary shares 1,097,082,162 1,040,956,722
------------------------------------------- ------------- -------------
Adjusted earnings per share (cents) 6.48 5.61
------------------------------------------- ------------- -------------
Geographical property analysis - owned investment properties
Germany
% of
portfolio
Annualised by
No. of Total Rate rent annualised Value
owned sqm psqm roll rent EURm Gross Net WALE WALE
March 2022 properties 000 Occupancy EUR EURm roll (2) yield yield rent sqm
---------------- ----------- ----- --------- ----- ---------- ------------ ------- ------ ------ ----- ----
Frankfurt 16 371 88.5% 6.72 26.5 23% 361.5 7.3% 6.7% 2.6 2.6
Berlin 4 103 97.6% 7.82 9.5 8% 162.4 5.8% 5.7% 2.4 2.4
Stuttgart 9 331 87.3% 4.91 17.0 15% 241.2 7.1% 6.3% 3.5 3.8
Cologne 7 129 87.5% 8.01 10.8 10% 155.4 7.0% 6.5% 3.0 2.9
Munich 3 124 83.6% 8.17 10.2 9% 197.8 5.1% 5.0% 2.2 2.5
Düsseldorf 15 352 78.1% 5.59 18.4 16% 248.9 7.4% 6.2% 3.0 3.3
Hamburg 4 91 82.1% 5.13 4.6 4% 61.8 7.5% 6.4% 2.3 2.2
Other 11 284 76.9% 6.37 16.7 15% 207.9 8.0% 7.0% 3.3 3.2
---------------- ----------- ----- --------- ----- ---------- ------------ ------- ------ ------ ----- ----
Total Germany 69 1,785 84.2% 6.31 113.7 100% 1,636.9 6.9% 6.2% 2.9 3.0
---------------- ----------- ----- --------- ----- ---------- ------------ ------- ------ ------ ----- ----
UK
% of
Annualised portfolio
rent by
No. of Total Rate roll annualised Value
owned sqm psqm EURm rent EURm Net WALE WALE
March 2022 properties 000 Occupancy EUR (1) (1) roll (2) yield rent sqm
----------- ----------- ----- --------- -------- ---------- ------------ ----- ------ ----- ----
Midlands 11 63 88.7% 11.81 7.8 15% 63.6 9.1% 0.6 1.3
North 12 77 93.7% 8.14 7.1 13% 67.1 8.0% 1.1 1.4
North East 9 59 90.4% 6.11 3.9 7% 35.5 6.4% 0.9 1.1
North West 12 85 92.2% 10.16 9.5 18% 77.5 9.2% 0.9 1.6
South 11 39 90.2% 27.24 11.5 22% 101.5 8.3% 0.9 1.8
South East 8 32 66.4% 19.37 5.0 9% 46.4 6.5% 0.8 1.6
South West 9 48 87.6% 16.39 8.5 16% 60.2 6.7% 1.1 1.7
----------- ----------- ----- --------- -------- ---------- ------------ ----- ------ ----- ----
Total UK 72 403 88.9% 12.39 53.3 100% 451.8 8.0% 0.8 1.3
----------- ----------- ----- --------- -------- ---------- ------------ ----- ------ ----- ----
(1) The Group's UK business charge licence customers an all
inclusive rate, which includes an implicit element of service
charge.
(2) Book value of owned investment properties including assets held for sale.
Usage analysis
Germany
Annualised % of
Total % of total Occupied % of occupied rent roll annualised Vacant Rate psqm
Usage sqm sqm sqm sqm EURm rent roll sqm EUR
-------------- --------- ---------- --------- ------------- ---------- ----------- ------- ---------
Office 601,332 33.7% 478,571 31.8% 44.5 39.2% 122,761 7.76
Storage 578,521 32.4% 482,271 32.1% 26.4 23.2% 96,250 4.57
Production 372,855 20.9% 353,131 23.5% 20.0 17.6% 19,724 4.72
Smartspace 101,915 5.7% 75,461 5.0% 7.9 6.9% 26,454 8.71
Other(1) 130,653 7.3% 113,663 7.6% 14.9 13.1% 16,990 10.90
-------------- --------- ---------- --------- ------------- ---------- ----------- ------- ---------
Total Germany 1,785,276 100.0% 1,503,097 100.0% 113.7 100.0% 282,179 6.31
-------------- --------- ---------- --------- ------------- ---------- ----------- ------- ---------
UK
Annualised
Total % of total Occupied % of occupied rent roll % of annualised Vacant Rate psqm
Usage sqm sqm sqm sqm EURm (3) rent roll sqm EUR (3)
--------- ------- ---------- -------- ------------- ---------- --------------- ------ ---------
Office 132,545 32.9% 104,470 29.1% 31.5 59.1% 28,075 25.17
Workshop 261,090 64.7% 246,216 68.7% 20.3 38.0% 14,874 6.85
Storage 2,082 0.5% 1,481 0.4% 0.3 0.6% 601 16.82
Other(2) 7,753 1.9% 6,418 1.8% 1.2 2.3% 1,335 15.86
--------- ------- ---------- -------- ------------- ---------- --------------- ------ ---------
Total UK 403,470 100.0% 358,585 100.0% 53.3 100.0% 44,885 12.39
--------- ------- ---------- -------- ------------- ---------- --------------- ------ ---------
(1) Other includes: catering, other usage, residential and technical space, land and car parking.
(2) Other includes: aerials, car parking, retail units, yards, catering and residential.
(3) The Group's UK business charge licence customers an all
inclusive rate, which includes an implicit element of service
charge.
Lease expiry profile of future minimum lease payments receivable
under non-cancellable leases
Germany by income
Adjustments
in relation
to
Office Production Storage Smartspace Other (1) lease incentives Total
EUR000 EUR000 EUR000 EUR000 EUR000 EUR000 EUR000
-------------- ------- ---------- ------- ---------- --------- ----------------- -------
Less than 1
year 39,894 19,207 23,930 3,654 12,631 (1,057) 98,259
Between 1 and
5 years 97,553 55,687 60,588 2,364 32,465 (484) 248,173
More than 5
years 21,593 15,922 13,764 71 10,696 (5) 62,041
-------------- ------- ---------- ------- ---------- --------- ----------------- -------
Total 159,040 90,816 98,282 6,089 55,792 (1,546) 408,473
-------------- ------- ---------- ------- ---------- --------- ----------------- -------
Germany by sqm
Office Production Storage Smartspace Other (1) Total
EUR000 EUR000 EUR000 EUR000 EUR000 sqm
---------------------- ------- ---------- ------- ---------- --------- ---------
Less than 1 year 133,037 74,472 136,439 63,694 19,436 427,078
Between 1 and 5 years 280,668 213,157 281,559 11,518 70,914 857,816
More than 5 years 64,866 65,502 64,273 249 23,313 218,203
---------------------- ------- ---------- ------- ---------- --------- ---------
Total 478,571 353,131 482,271 75,461 113,663 1,503,097
---------------------- ------- ---------- ------- ---------- --------- ---------
(1) Other includes: catering, other usage, residential and technical space, land and car parking.
UK by income
Adjustments
in relation
to
Office Workshop Storage Other (2) lease incentives Total
EUR000 EUR000 EUR000 EUR000 EUR000 EUR000
---------------------- ------- -------- ------- --------- ----------------- -------
Less than 1 year 7,500 4,442 69 379 - 12,390
Between 1 and 5 years 10,490 8,709 - 9 - 19,208
More than 5 years 6,469 5,010 - 1,378 - 12,857
---------------------- ------- -------- ------- --------- ----------------- -------
Total 24,459 18,161 69 1,766 - 44,455
---------------------- ------- -------- ------- --------- ----------------- -------
UK by sqm
Office Workshop Storage Other (2) Total
EUR000 EUR000 EUR000 EUR000 sqm
---------------------- ------- -------- ------- --------- -------
Less than 1 year 81,962 172,694 1,481 6,416 262,553
Between 1 and 5 years 16,184 58,852 - - 75,036
More than 5 years 6,324 14,670 - 2 20,996
---------------------- ------- -------- ------- --------- -------
Total 104,470 246,216 1,481 6,418 358,585
---------------------- ------- -------- ------- --------- -------
(2) Other includes: aerials, car parking, retail units, yards, catering and residential.
The Group's UK business provides flexible leases that represent
approximately 75% of annualised rent roll and conventional leases
that represent 25% of annualised rent roll.
Escalation profile per usage
Germany
The Group's German business' primary source of revenue relates
to leasing contracts with tenants. The Group's German business
realises escalations as a result of renewals, inflation linked
indexations and contractually agreed uplifts. Approximately 33.4%
of contracts in place at 31 March 2022 are subject to contractual
uplifts. The average contractual uplift over the coming twelve
months split by usage is detailed as follows:
Increase
Usage in %
----------- --------
Office 3.30%
Storage 2.99%
Production 3.20%
Smartspace 2.18%
Other(1) 10.42%
----------- --------
Total 3.27%
----------- --------
(1) Other includes: catering, other usage, residential and technical space, land and car parking.
UK
The Group's UK business' primary source of revenue relates to
leasing contracts and licence fee agreements with tenants. The
Group's UK business realises escalations as a result of renewals,
inflation linked indexations and contractually agreed uplifts. Of
the lease contracts in place at 31 March 2022, approximately 12.8%
are subject to contractual uplifts. The average contractual lease
contract uplifts over the coming twelve months split by usage is
detailed twelve follows:
Increase
Usage in %
--------- --------
Office 9.80%
Workshop 10.86%
--------- --------
Total 10.04%
--------- --------
Property profile March 2022*
Germany
Total Office Storage Production Other (1) Rate psqm
Property and location sqm sqm sqm sqm sqm EUR
---------------------------------- --------- ------- ------- ---------- --------- ---------
Rostock 18,632 8,228 1,569 6,606 2,229 6.13
Hanover 22,850 8,850 3,923 6,431 3,646 6.28
Mahlsdorf 29,333 11,592 10,796 1,963 4,982 7.79
Mahlsdorf II 12,736 5,765 1,262 1,906 3,803 7.55
Magdeburg 29,993 10,704 9,779 4,210 5,300 5.19
Gartenfeld 25,396 5,107 11,029 3,297 5,963 8.52
Neuruppin 22,959 1,403 7,629 13,133 794 5.10
Potsdam 35,864 12,372 12,555 4,956 5,981 7.47
Schenefeld 40,252 10,265 26,522 1,961 1,504 4.60
Erfurt 23,238 7,586 11,980 - 3,672 3.45
Dresden 57,643 26,191 17,388 10,931 3,133 7.72
Hamburg Lademannbogen 10,277 7,829 1,048 - 1,400 9.84
Buxtehude 28,216 1,120 10,819 13,420 2,857 4.11
Norderstedt 12,627 3,052 7,507 173 1,895 5.32
Neuss 17,589 13,397 1,283 153 2,756 11.99
Bonn 10,586 4,531 2,412 477 3,166 7.88
Bonn - Dransdorf 19,062 5,367 6,882 1,665 5,148 7.19
Aachen I 24,443 12,622 2,324 5,510 3,987 8.75
Aachen II 9,750 1,452 6,600 1,505 193 5.78
Cologne 30,263 2,672 12,578 2,709 12,304 4.93
Wuppertal 14,600 855 5,589 3,613 4,543 4.76
Solingen 13,333 2,475 4,409 4,924 1,525 2.67
Düsseldorf -
Sud 21,416 2,814 12,910 1,970 3,722 6.08
Cölln Parc 13,480 6,509 3,371 2,867 733 10.68
Krefeld III 9,668 4,916 3,344 924 484 8.05
Düsseldorf II 9,839 4,433 4,949 - 457 7.66
Oberhausen 82,837 48,064 27,903 1,739 5,131 5.23
Heiligenhaus 44,485 21,999 7,453 12,467 2,566 3.81
Essen II 11,899 8,616 1,829 627 827 7.77
Krefeld II 6,101 2,893 325 2,171 712 7.45
Krefeld 11,322 7,453 2,545 592 732 8.49
Cologne Porz 21,087 15,083 2,416 279 3,309 11.39
Bochum 55,793 12,762 35,970 3,965 3,096 4.54
Bochum II 4,318 3,502 479 12 325 8.70
Neuss II 33,357 8,498 17,210 6,058 1,591 4.50
Essen 15,259 6,040 6,241 2,367 611 6.03
Mannheim II 14,551 6,555 4,122 586 3,288 6.01
Mannheim III 3,035 2,278 740 - 17 6.65
Neu-Isenburg 8,250 5,752 1,244 - 1,254 9.78
Mannheim 68,695 13,102 22,215 27,139 6,239 5.16
Maintal 36,999 7,231 14,718 8,289 6,761 6.44
Maintal Mitte 11,023 462 4,523 5,685 353 4.11
Offenbach I 15,044 3,641 2,414 2,351 6,638 6.31
Pfungstadt 32,662 6,707 12,300 9,786 3,869 5.37
Kassel 8,142 3,312 683 3,875 272 5.55
Offenbach Carl Legien-Strasse 45,175 9,761 9,307 17,649 8,458 5.60
Frankfurt Röntgenstraße 5,496 3,957 444 36 1,059 11.62
Saarbrücken 46,827 30,116 10,012 820 5,879 8.42
Alzenau 66,511 27,681 7,450 24,087 7,293 6.55
Frankfurt III 10,320 7,849 1,391 - 1,080 13.06
Friedrichsdorf 17,536 6,793 5,250 2,763 2,730 6.98
Dreieich 12,886 7,404 2,929 - 2,553 7.84
Frankfurt 4,260 2,260 484 68 1,448 10.72
Wiesbaden 18,364 14,334 1,369 - 2,661 14.04
Ludwigsburg 28,233 7,522 9,788 3,837 7,086 6.25
Nuremberg 14,101 2,323 3,241 7,532 1,005 6.90
Heidenheim 46,877 8,240 15,458 13,981 9,198 4.24
Stuttgart - Kirchheim 57,863 20,109 12,957 18,737 6,060 5.91
Munich - Neuaubing 91,234 15,990 31,880 29,645 13,719 7.49
Nabern II 5,578 1,620 491 2,376 1,091 8.54
Markgröningen 57,673 4,532 30,794 20,341 2,006 3.44
Fellbach 27,055 2,493 16,207 340 8,015 5.33
Fellbach II 9,717 4,724 205 - 4,788 5.78
Öhringen 18,650 1,859 7,425 8,784 582 4.76
Frickenhausen 27,876 6,515 6,534 12,680 2,147 5.50
Freiburg Teningen 20,797 7,151 6,046 5,578 2,022 5.06
Rastatt 19,143 6,565 6,099 6,222 257 n/a
Neckartenzlingen 51,577 15,755 18,842 14,087 2,893 4.39
Grasbrunn 14,274 7,269 4,743 - 2,262 11.42
Hallbergmoos 18,349 12,453 3,388 - 2,508 9.86
---------------------------------- --------- ------- ------- ---------- --------- ---------
Total 1,785,276 601,332 578,521 372,855 232,568 6.31
---------------------------------- --------- ------- ------- ---------- --------- ---------
UK
Total Office Workshop Storage Other (2) Rate psqm
Property and location sqm sqm sqm sqm sqm EUR (3)
--------------------------- ------- ------- -------- ------- --------- ---------
Albion Mills Business
Centre 15,136 5,537 5,936 840 2,823 8.59
Altrincham 4,498 1,353 3,058 - 87 18.86
Ashford 1,823 1,823 - - - 39.04
Barnsley 6,637 545 5,930 - 162 7.72
Basingstoke 11,086 10,957 26 - 103 24.22
Birmingham - Tyseley 12,643 924 10,124 1,242 353 8.50
Bradford - Dudley
Hill 10,998 810 10,170 - 18 7.34
Bristol - Equinox 1,304 1,303 - - 1 41.68
Bury 3,911 3,911 - - - 14.31
Camberwell - Lilford 3,224 1,361 1,788 - 75 15.37
Camberwell - Lomond 2,004 1,224 757 - 23 32.71
Cardiff 4,110 4,110 - - - 29.67
Cheadle 1,666 1,637 - - 29 36.73
Christchurch 2,663 2,058 605 - - 28.37
Consett 3,094 - 3,094 - - 4.69
Coventry 1,622 1,622 - - - 17.51
Design Works 4,921 3,521 1,325 - 75 15.03
Didcot 1,021 510 510 - 1 29.96
Dinnington 3,647 999 2,648 - - 9.81
Doncaster 3,106 3,052 12 - 42 22.20
Dorking 2,148 1,406 715 - 27 40.79
Egham 996 926 69 - 1 31.11
Fareham 1,758 1,758 - - - 45.08
Gateshead 13,160 - 11,965 - 1,195 3.32
Gloucester 21,411 3,143 18,149 - 119 5.49
Gloucester - Barnwood 3,402 3,378 24 - - 35.08
Hartlepool - Oakesway 2,585 - 2,585 - - 2.57
Hebburn 5,463 - 5,462 - 1 7.00
Hemel Hempstead 4,381 4,380 - - 1 28.69
Hooton 1,383 1,230 152 - 1 23.63
Hove 2,963 2,194 732 - 37 29.51
Huddersfield - Linthwaite 2,365 - 2,364 - 1 7.00
Ipswich 7,155 7,155 - - - -
Leeds - Brooklands 2,133 2,042 32 - 59 20.61
Leeds - Wortley 3,734 - 3,733 - 1 6.65
Letchworth 3,090 2,427 661 - 2 14.55
Littlehampton 1,998 1,998 - - - 37.13
London - Colney 1,804 1,767 36 - 1 28.13
M25 Business Centre 3,285 2,154 1,084 - 47 35.87
Maidstone 1,644 1,643 - - 1 37.45
Manchester - Trafford
Park 8,695 - 8,694 - 1 8.33
Manchester - Newton
Heath 5,884 2,348 3,393 - 143 14.49
Manchester - Old
Trafford 4,577 1,344 3,091 - 142 22.79
Milton Keynes 3,654 3,592 14 - 48 27.39
New Addington - Croydon 6,540 381 6,158 - 1 13.28
Newcastle - Amber
Court 4,297 4,297 - - - 20.19
Northampton - K2 4,706 74 4,631 - 1 11.71
Northampton - KG 12,911 910 11,952 - 49 8.86
Nottingham - Arnold 5,444 1,373 4,057 - 14 8.68
Nottingham - Park
Row 4,459 4,409 - - 50 23.60
Nottingham - Roden 5,291 9 5,252 - 30 7.01
Oldham - Hollinwood 5,525 5,447 49 - 29 20.72
Perivale 2,132 526 1,605 - 1 27.91
Peterlee 18,603 - 18,602 - 1 3.93
Poole 6,735 6,586 - - 149 25.22
Preston 5,340 1,855 3,484 - 1 14.82
Rochdale - Fieldhouse 22,903 483 22,418 - 2 3.69
Rochdale - Moss Mill 16,321 14 16,244 - 63 3.96
Rotherham 4,504 1,361 3,112 - 31 12.84
Sandy Business Park 9,261 108 9,152 - 1 8.08
Sheffield - Cricket 1,928 - 1,928 - - 8.53
Shipley 2,238 2,238 - - - 12.95
Solihull 1,715 1,715 - - - 49.25
Stanley 3,776 - 3,776 - - 5.12
Stoke 5,119 - 5,118 - 1 6.49
Sunderland - North
Sands 2,819 2,818 - - 1 16.75
Swindon 6,834 339 6,420 - 75 14.04
Theale 2,857 2,800 - - 57 53.99
Wakefield 20,634 620 18,443 - 1,571 4.46
Warrington - Craven
Court 3,830 - 3,830 - - 9.71
Wimbledon 3,031 1,459 1,569 - 3 37.60
Wolverhampton - Willenhall 4,935 581 4,352 - 2 8.92
--------------------------- ------- ------- -------- ------- --------- ---------
Total 403,470 132,545 261,090 2,082 7,753 12.39
--------------------------- ------- ------- -------- ------- --------- ---------
* Excluding commercial leased investment properties.
(1) Other includes: Smartspace, catering, other usage,
residential and technical space, land and car parking.
(2) Other includes: aerials, car parking, retail units, yards, catering and residential.
(3) The Group's UK business charge licence customers an all
inclusive rate, which includes an implicit element of service
charge.
Annex 1- Non-IFRS Measures
Basis of preparation
The Directors of Sirius Real Estate Limited ("Sirius") have
chosen to disclose additional non-IFRS measures; these include EPRA
earnings, adjusted net asset value, EPRA net reinstatement value,
EPRA net tangible assets, EPRA net disposal value, adjusted profit
before tax and funds from operations (collectively "Non-IFRS
Financial Information").
The Directors have chosen to disclose:
-- EPRA earnings in order to assist in comparisons with similar
businesses in the real estate sector. EPRA earnings is a definition
of earnings as set out by the European Public Real Estate
Association. EPRA earnings represents earnings after adjusting for
the revaluation of investment properties, changes in fair value of
derivative financial instruments, gains and losses on disposals of
properties (including tax), recoveries from prior disposals of
subsidiaries, refinancing costs, goodwill impairment, acquisition
costs in relation to business combinations, exit fees and
prepayment penalties (collectively the "EPRA earnings
adjustments"), deferred tax in respect of the EPRA earnings
adjustments, NCI relating to gain on revaluation and gain on sale
of properties (including tax), revaluation gain on investment
property relating to associates and the related tax thereon. The
reconciliation between basic and diluted earnings and EPRA earnings
is detailed in table A below.
-- Adjusted net asset value in order to assist in comparisons
with similar businesses. Adjusted net asset value represents net
asset value after adjusting for derivative financial instruments at
fair value and deferred tax relating to valuation movements,
derivative financial instruments and LTIP valuation. The
reconciliation for adjusted net asset value is detailed in table B
below.
-- EPRA net reinstatement value ("EPRA NRV") in order to assist
in comparisons with similar businesses in the real estate sector.
EPRA NRV is a definition of net asset value as set out by the
European Public Real Estate Association. EPRA NRV represents net
asset value after adjusting for derivative financial instruments at
fair value, deferred tax relating to valuation movements and
derivatives and real estate transfer tax presented in the Valuation
Certificate (for the entire consolidated Group including wholly
owned entities and investment in associates). The reconciliation
for EPRA NRV is detailed in table C below.
-- EPRA net tangible assets ("EPRA NTA") in order to assist in
comparisons with similar businesses in the real estate sector. EPRA
NTA is a definition of net asset value as set out by the European
Public Real Estate Association. EPRA NTA represents net asset value
after adjusting for derivative financial instruments at fair value,
deferred tax relating to valuation movements (excluding that
relating to assets held for sale) and derivatives, goodwill and
intangible assets as per the note reference in the consolidated
statement of financial position (for the entire consolidated Group
including wholly owned entities and investment in associates). The
reconciliation for EPRA NTA is detailed in table C below.
-- EPRA net disposal value ("EPRA NDV") in order to assist in
comparisons with similar businesses in the real estate sector. EPRA
NDV is a definition of net asset value as set out by the European
Public Real Estate Association. EPRA NDV represents net asset value
after adjusting for goodwill as per the note reference in the
consolidated statement of financial position and the fair value of
fixed interest rate debt (for the entire consolidated Group
including wholly owned entities and investment in associates). The
reconciliation for EPRA NDV is detailed in table C below.
-- Adjusted profit before tax in order to provide an alternative
indication of Sirius Real Estate Limited and its subsidiaries' (the
"Group") underlying business performance. Accordingly, it excludes
the effect of the gain on revaluation of investment properties,
goodwill impairment, other adjusting items, gains/losses on sale of
properties, change in fair value of financial derivatives,
recoveries from prior disposals of subsidiaries, revaluation gain
on investment property relating to associates and related tax and
includes the deficit on revaluation relating to leased investment
properties. The reconciliation for adjusted profit before tax is
detailed in table D below.
-- Funds from operations in order to assist in comparisons with
similar businesses and to facilitate the Group's dividend policy
which is derived from funds from operations. Accordingly, funds
from operations excludes depreciation and amortisation (excluding
depreciation relating to IFRS 16), net foreign exchange
differences, amortisation of financing fees, adjustment in respect
of IFRS 16 and current tax excluding tax on disposals. The
reconciliation for funds from operations is detailed in table D
below.
The Non-IFRS Financial Information is presented in accordance
with the JSE Listing Requirements and the guide on pro forma
financial information issued by SAICA. The Non-IFRS Financial
Information is the responsibility of the Directors. The Non-IFRS
Financial Information has been presented for illustrative purposes
and, due to its nature, may not fairly present the Group's
financial position or result of operations.
Ernst & Young Inc have issued a reporting accountant report
on the Non-IFRS Financial Information for the year ended 31 March
2022 which is available for inspection at the Group's registered
office. The starting point for all the Non-IFRS Financial
Information has been extracted from the Group's consolidated
financial statements for the year ended 31 March 2022 (the
"consolidated financial statements").
Table A - EPRA earnings
Year ended Year ended
31 March 31 March
2022 2021
EUR000 EUR000
------------------------------------------------------------ ---------- ----------
Basic and diluted earnings attributable to owners
of the Company(1) 147,873 147,451
Gain on revaluation of investment properties(2) (140,884) (99,585)
Add loss on disposal of properties (including tax)(3) 623 33
Deduct recoveries from prior disposals of subsidiaries(4) (94) (65)
Refinancing costs, exit fees and prepayment penalties(5) 7,821 -
Goodwill impairment(6) 40,906 -
Acquisition costs in relation to business combinations(7) 5,299 -
Change in fair value of derivative financial instruments(8) (996) (136)
Deferred tax in respect of EPRA earnings adjustments(9) 14,827 14,180
NCI in respect of the above(10) 85 82
Deduct revaluation gain on investment property relating
to associates(11) (6,021) (4,199)
Tax in relation to the revaluation gain on investment
property relating to associates(12) 1,256 872
------------------------------------------------------------ ---------- ----------
EPRA earnings (13) 70,695 58,633
------------------------------------------------------------ ---------- ----------
Notes:
(1) Presents the profit attributable to owners of the Company
which has been extracted from the consolidated income statement
within the consolidated financial statements.
(2) Presents the gain on revaluation of investment properties
which has been extracted from the consolidated income statement
within the consolidated financial statements.
(3) Presents the gain or loss on disposal of properties
(including tax) which has been extracted from note 11 within the
consolidated financial statements.
(4) Presents the recoveries from prior disposals of subsidiaries
which has been extracted from the consolidated income statement
within the consolidated financial statements.
(5) Presents the refinancing costs, exit fees and prepayment
penalties which have been extracted from note 10 within the
consolidated financial statements.
(6) Presents the goodwill impairment which has been extracted
from the consolidated income statement within the consolidated
financial statements (2021: EURnil).
(7) Presents the acquisition costs in relation to business
combinations which have been extracted from note 4 within the
consolidated financial statements (2021: EURnil).
(8) Presents the change in fair value of derivative financial
instruments which has been extracted from the consolidated income
statement within the consolidated financial statements.
(9) Presents deferred tax relating to origination and reversal
of temporary differences of the EPRA earnings adjustments which has
been extracted from note 11 within the consolidated financial
statements.
(10) Presents the non-controlling interest relating to gain on
revaluation and gain or loss on disposal of properties (including
tax) which has been extracted from note 12 within the consolidated
financial statements.
(11) Presents the revaluation gain on investment property
relating to associates which has been extracted from note 12 within
the consolidated financial statements.
(12) Presents tax in relation to the revaluation gain on
investment property relating to associates which has been extracted
from note 12 within the consolidated financial statements.
(13) Presents the EPRA earnings for the year.
Table B - Adjusted net asset value
31 March 31 March
2022 2021
EUR000 EUR000
------------------------------------------------------- --------- --------
Net asset value
Net asset value for the purpose of assets per share
(assets attributable to the owners of the Company)(1) 1,190,652 926,533
Deferred tax liabilities/(assets) (see note 11)(2) 75,893 56,331
Derivative financial instruments at fair value(3) (329) 1,141
------------------------------------------------------- --------- --------
Adjusted net asset value attributable to owners of
the Company (4) 1,266,216 984,005
------------------------------------------------------- --------- --------
Notes:
(1) Presents the net asset value for the purpose of assets per
share (assets attributable to the owners of the Company) which has
been extracted from the consolidated statement of financial
position within the consolidated financial statements.
(2) Presents deferred tax liabilities which have been extracted
from the consolidated statement of financial position within the
consolidated financial statements.
Notes continued
(3) Presents current derivative financial instrument assets of
EUR329,000 (2021: EUR70,000) less current derivative financial
instrument liabilities of EURnil (2021: EUR414,000) less
non-current derivative financial instrument liabilities of EURnil
(2021: EUR797,000) which have been extracted from the consolidated
statement of financial position within the consolidated financial
statements.
(4) Presents the adjusted net asset value attributable to the
owners of the Company as at year end.
Table C - EPRA net asset measures
EPRA NRV EPRA NTA EPRA NDV
31 March 2022 EUR000 EUR000 EUR000
------------------------------------------- --------- --------- ---------
Net asset value as at year end (basic)(1) 1,190,652 1,190,652 1,190,652
------------------------------------------- --------- --------- ---------
Diluted EPRA net asset value at fair value 1,190,652 1,190,652 1,190,652
------------------------------------------- --------- --------- ---------
Group
Derivative financial instruments at fair
value(2) (329) (329) n/a
Deferred tax in respect of EPRA earnings
adjustments(3) 75,893 75,566* n/a
Goodwill as per note 17(4) n/a - -
Intangibles as per note 17(5) n/a (4,283) n/a
Fair value of fixed interest rate debt(6) n/a n/a (22,229)
Real estate transfer tax(7) 160,692 n/a n/a
Investment in associate
Deferred tax in respect of EPRA earnings
adjustments(3) 6,563 6,563* n/a
Fair value of fixed interest rate debt(6) n/a n/a 2,196
Real estate transfer tax(7) 9,147 n/a n/a
------------------------------------------- --------- --------- ---------
Total EPRA NRV, NTA and NDV (8) 1,442,618 1,268,169 1,170,619
------------------------------------------- --------- --------- ---------
EPRA NRV EPRA NTA EPRA NDV
31 March 2021 EUR000 EUR000 EUR000
------------------------------------------- --------- -------- --------
Net asset value as at year end (basic)(1) 926,533 926,533 926,533
------------------------------------------- --------- -------- --------
Diluted EPRA net asset value at fair value 926,533 926,533 926,533
------------------------------------------- --------- -------- --------
Group
Derivative financial instruments at fair
value(2) 1,141 1,141 n/a
Deferred tax in respect of EPRA earnings 56,331
adjustments(3) 56,331 * n/a
Goodwill as per note 17(4) n/a (3,738) (3,738)
Intangibles as per note 17(5) n/a (2,830) n/a
Fair value of fixed interest rate debt(6) n/a n/a (3,556)
Real estate transfer tax(7) 106,274 n/a n/a
Investment in associate
Deferred tax in respect of EPRA earnings
adjustments(3) 5,212 5,212* n/a
Fair value of fixed interest rate debt(6) n/a n/a (1,772)
Real estate transfer tax(7) 6,772 n/a n/a
------------------------------------------- --------- -------- --------
Total EPRA NRV, NTA and NDV (8) 1,102,263 982,649 917,467
------------------------------------------- --------- -------- --------
* The Company intends to hold and does not intend in the long
term to sell any of the investment properties and has excluded such
deferred taxes for the whole portfolio as at year end except for
deferred tax in relation to assets held for sale.
Notes:
(1) Presents the net asset value for the purpose of assets per
share (assets attributable to the owners of the Company) which has
been extracted from the consolidated statement of financial
position within the consolidated financial statements.
(2) Presents current derivative financial instrument assets of
EUR329,000 (2021: EUR70,000) less current derivative financial
instrument liabilities of EURnil (2021: EUR414,000) less
non-current derivative financial instrument liabilities of EURnil
(2021: EUR797,000) which have been extracted from the consolidated
statement of financial position within the consolidated financial
statements.
(3) Presents for the Group the deferred tax liabilities which
have been extracted from note 11 within the consolidated financial
statements and for EPRA NTA only the additional credit adjustment
for the deferred tax expense relating to assets held for sale of
EUR327,000 (2021: EURnil). For investment in associates the
deferred tax expense arising on revaluation gains amounted to
EUR6,563,000 (2021: EUR5,212,000).
(4) Presents the net book value of goodwill which has been
extracted from note 17 within the consolidated financial
statements.
(5) Presents the net book value of software and licences with
definite useful life which has been extracted from note 17 within
the consolidated financial statements.
Notes continued
(6) Presents the fair value of financial liabilities and assets
on the statement of financial position, net of any related deferred
tax.
(7) Presents the add-back of purchasers' costs in order to
reflect the value prior to any deduction of purchasers' costs, as
shown in the Valuation Certificate of Cushman & Wakefield
LLP.
(8) Presents the EPRA NRV, EPRA NTA and EPRA NDV, respectively, as at year end.
Table D - Adjusted profit before tax and funds from
operations
Year ended Year ended
31 March 31 March
2022 2021
EUR000 EUR000
------------------------------------------------------ ---------- ----------
Reported profit before tax (1) 168.9 163.7
Adjustments for:
Gain on revaluation of investment properties(2) (140.9) (99.6)
Deficit on revaluation relating to leased investment
properties(3) (5.6) (4.3)
Loss/(gain) on disposals of properties(4) 0.6 (0.1)
Recoveries from prior disposals of subsidiaries(5) (0.1) (0.1)
Deduct revaluation gain on investment property from
associates and related tax(6) (4.8) (3.3)
Other adjusting items(7) 19.1 4.1
Goodwill impairment(8) 40.9 -
Change in fair value of financial derivatives(9) (1.0) (0.1)
------------------------------------------------------ ---------- ----------
Adjusted profit before tax (10) 77.1 60.3
Adjustments for:
Foreign exchange effects(11) (1.9) -
Depreciation and amortisation (excluding depreciation
relating to IFRS 16)(12) 2.3 1.6
Amortisation of financing fees(13) 2.6 1.7
Adjustment in respect of IFRS 16(14) 0.6 (0.9)
Current taxes incurred (see note 11)(15) (6.1) (1.9)
Add back current tax relating to disposals(16) - 0.1
------------------------------------------------------ ---------- ----------
Funds from operations (17) 74.6 60.9
------------------------------------------------------ ---------- ----------
Notes:
(1) Presents profit before tax which has been extracted from the
consolidated income statement within the consolidated financial
statements.
(2) Presents the gain on revaluation of investment properties
which has been extracted from the consolidated income statement
within the consolidated financial statements.
(3) Presents the deficit on revaluation relating to capitalised
head leases which has been extracted from note 14 within the
consolidated financial statements.
(4) Presents the gain or loss on disposal of properties which
has been extracted from the consolidated income statement within
the consolidated financial statements.
(5) Presents the recoveries from prior disposals of subsidiaries
which has been extracted from the consolidated income statement
within the consolidated financial statements.
(6) Presents the revaluation gain on investment property
relating to associates and related tax which has been extracted
from note 12 within the consolidated financial statements.
(7) Presents the total adjusting items which has been extracted
from note 12 within the consolidated financial statements.
(8) Presents the goodwill impairment which has been extracted
from the consolidated income statement within the consolidated
financial statements.
(9) Presents the change in fair value of derivative financial
instruments which has been extracted from the consolidated income
statement within the consolidated financial statements.
(10) Presents the adjusted profit before tax for the year.
(11) Presents the net foreign exchange gains as included in
other administration costs in note 7 within the consolidated
financial statements (2021: EURnil).
(12) Presents depreciation of plant and equipment and
amortisation of intangible assets which have been extracted from
note 7 within the consolidated financial statements.
(13) Presents amortisation of capitalised finance costs which
has been extracted from note 10 within the consolidated financial
statements.
(14) Presents the differential between the expense recorded in
the consolidated income statement for the year relating to head
leases in accordance with IFRS 16 amounting to EUR6.9 million
(2021: EUR5.1 million) and the actual cash expense recorded in the
consolidated statement of cash flows for the year amounting to
EUR6.3 million (2021: EUR6.0 million).
(15) Presents the total current income tax which has been
extracted from note 11 within the consolidated financial
statements.
(16) Presents the current income tax charge relating to
disposals of investment properties which has been extracted from
note 11 within the consolidated financial statements.
(17) Presents the funds from operations for the year.
Glossary of terms
Adjusted earnings is the earnings attributable to the owners of the
Company, excluding the effect of adjusting items
net of related tax, gains/losses on sale of properties
net of related tax, the revaluation deficits/surpluses
on the investment properties (also to associates)
net of related tax, profits and losses on disposals
of properties net of related tax, changes in fair
value of derivative financial instruments net of
related tax, recoveries from prior disposals of
subsidiaries net of related tax, finance restructuring
costs net of related tax and adjustment on revaluation
expense relating to leased investment properties
------------------------- -----------------------------------------------------------
Adjusted net asset is the assets attributable to the equity owners
value of the Company adjusted for derivative financial
instruments at fair value and deferred tax arising
on revaluation gain, derivative financial instruments
and LTIP valuation
------------------------- -----------------------------------------------------------
Adjusted profit is the reported profit before tax adjusted for gain
before tax on revaluation of investment properties, gains/losses
on sale of properties, changes in fair value of
derivative financial instruments, other adjusting
items, goodwill impairment, recoveries from prior
disposals of subsidiaries, revaluation gain on investment
property relating to associates and related tax
------------------------- -----------------------------------------------------------
Annualised acquisition is the income generated by a property less directly
net operating income attributable costs at the date of acquisition expressed
in annual terms. Please see "annualised rent roll"
definition below for further explanatory information
------------------------- -----------------------------------------------------------
Annualised acquisition is the contracted rental income of a property at
rent roll the date of acquisition expressed in annual terms.
Please see "annualised rent roll" definition below
for further explanatory information
------------------------- -----------------------------------------------------------
Annualised rent is the contracted rental income of a property at
roll a specific reporting date expressed in annual terms.
Unless stated otherwise the reporting date is 31
March 2022. Annualised rent roll should not be interpreted
nor used as a forecast or estimate. Annualised rent
roll differs from rental income described in note
5 of the Annual Report and reported within revenue
in the consolidated income statement for reasons
including:
annualised rent roll represents contracted rental
income at a specific point in time expressed in
annual terms;
rental income as reported within revenue represents
rental income recognised in the period under review;
and
rental income as reported within revenue includes
accounting adjustments including those relating
to lease incentives
------------------------- -----------------------------------------------------------
Capital value is the market value of a property divided by the
total sqm of a property
------------------------- -----------------------------------------------------------
Cumulative total is the return calculated by combining the movement
return in investment property value net of capex with the
total net operating income less bank interest over
a specified period of time
------------------------- -----------------------------------------------------------
EPRA earnings is earnings after adjusting the revaluation of investment
properties, changes in fair value of derivative
financial instruments, gains and losses on disposals
of properties (net of related tax), recoveries from
prior disposals of subsidiaries (net of related
tax), refinancing costs, goodwill impairment, acquisition
costs in relation to business combinations, exit
fees and prepayment penalties (collectively the
"EPRA earnings adjustments"), deferred tax in respect
of the EPRA earnings adjustments, NCI relating to
gain on revaluation and gain on sale of properties
net of related tax, revaluation gain on investment
property relating to associates and the related
tax thereon
------------------------- -----------------------------------------------------------
EPRA net reinstatement is the net asset value after adjusting for derivative
value financial instruments at fair value, deferred tax
relating to valuation movements and derivatives
and real estate transfer tax presented in the Valuation
Certificate, including the amounts of the above
related to the investment in associates
------------------------- -----------------------------------------------------------
EPRA net tangible is the net asset value after adjusting for derivative
assets financial instruments at fair value, deferred tax
relating to valuation movements (just for the part
of the portfolio that the Company intends to hold
should be excluded) and derivatives, goodwill and
intangible assets as per the note reference in the
consolidated statement of financial position, including
the amounts of the above related to the investment
in associates
------------------------- -----------------------------------------------------------
EPRA net disposal is the net asset value after adjusting for goodwill
value as per the note reference in the consolidated statement
of financial position and the fair value of fixed
interest rate debt, including the amounts of the
above related to the investment in associates
------------------------- -----------------------------------------------------------
EPRA net initial is the annualised rent roll based on the cash rents
yield passing at the statement of financial position date,
less non-recoverable property operating expenses,
divided by the market value of the property, increased
with (estimated) purchasers' costs
------------------------- -----------------------------------------------------------
EPRA net yield is the net operating income generated by a property
expressed as a percentage of its value plus purchase
costs
------------------------- -----------------------------------------------------------
ERV is the estimated rental value which is the annualised
rental income at 100% occupancy
------------------------- -----------------------------------------------------------
Funds from operations is adjusted profit before tax adjusted for depreciation
and amortisation (excluding depreciation relating
to IFRS 16), amortisation of financing fees, net
foreign exchange gains, adjustment in respect of
IFRS 16 and current tax excluding tax on disposals
------------------------- -----------------------------------------------------------
Geared IRR is an estimate of the rate of return taking into
consideration debt
------------------------- -----------------------------------------------------------
Gross loan to value is the ratio of principal value of total debt to
ratio the aggregated value of investment property
------------------------- -----------------------------------------------------------
Like for like refers to the manner in which metrics are subject
to adjustment in order to make them directly comparable.
Like-for-like adjustments are made in relation to
annualised rent roll, rate and occupancy and eliminate
the effect of asset acquisitions and disposals that
occur in the reporting period
------------------------- -----------------------------------------------------------
Net loan to value is the ratio of principal value of total debt less
ratio cash, excluding that which is restricted, to the
aggregate value of investment property
------------------------- -----------------------------------------------------------
Net operating income is the rental and other income from investment properties
generated by a property less directly attributable
costs
------------------------- -----------------------------------------------------------
Net yield is the net operating income generated by a property
expressed as a percentage of its value
------------------------- -----------------------------------------------------------
Occupancy is the percentage of total lettable space occupied
as at reporting date
------------------------- -----------------------------------------------------------
Operating cash flow is an estimate of the rate of return based on operating
on investment (geared) cash flows and taking into consideration debt
------------------------- -----------------------------------------------------------
Operating cash flow is an estimate of the rate of return based on operating
on investment (ungeared) cash flows
------------------------- -----------------------------------------------------------
Operating profit is the net operating income adjusted for gain on
revaluation of investment properties, loss on disposal
of properties, recoveries from prior disposals of
subsidiaries, administrative expenses, goodwill
impairment and share of profit of associates
------------------------- -----------------------------------------------------------
Rate for the German portfolio is rental income per sqm
expressed on a monthly basis as at a specific reporting
date
for the UK portfolio is rental income (includes
estimated service charge element) per sqm expressed
on a monthly basis as at a specific reporting date
in Euro
for the UK portfolio is rental income (includes
estimated service charge element) per sq ft expressed
on an annual basis as at a specific reporting date
in GBP
------------------------- -----------------------------------------------------------
Senior Management as set out on page 70 of the Group's Annual Report
Team and Accounts 2022
------------------------- -----------------------------------------------------------
Total debt is the aggregate amount of the Company's interest-bearing
loans and borrowings
------------------------- -----------------------------------------------------------
Total shareholder is the return obtained by a shareholder calculated
accounting return by combining both movements in adjusted NAV per
share and dividends paid
------------------------- -----------------------------------------------------------
Total return is the return for a set period of time combining
valuation movement and income generated
------------------------- -----------------------------------------------------------
Ungeared IRR is an estimate of the rate of return
------------------------- -----------------------------------------------------------
Weighted average is the weighted effective rate of interest of loan
cost of debt facilities expressed as a percentage
------------------------- -----------------------------------------------------------
Weighted average is the weighted average time to repayment of loan
debt expiry facilities expressed in years
------------------------- -----------------------------------------------------------
Corporate directory
SIRIUS REAL ESTATE LIMITED
(Incorporated in Guernsey)
Company number: 46442
JSE Share Code: SRE
LSE (GBP) Share Code: SRE
LEI: 213800NURUF5W8QSK566
ISIN Code: GG00B1W3VF54
Registered office
Trafalgar Court
2nd Floor
East Wing
Admiral Park
St Peter Port
Guernsey GY1 3EL
Channel Islands
Registered number
Incorporated in Guernsey under the Companies (Guernsey) Law,
2008, as amended, under number 46442
Company Secretary
A Gallagher
Sirius Real Estate Limited
Trafalgar Court
2nd Floor
East Wing
Admiral Park
St Peter Port
Guernsey GY1 3EL
Channel Islands
UK solicitors
Norton Rose Fulbright LLP
3 More London Riverside
London SE1 2AQ
United Kingdom
Financial PR
FTI Consulting LLP
200 Aldersgate Street
London EC1A 4HD
United Kingdom
JSE sponsor
PSG Capital Proprietary Limited
1st Floor, Ou Kollege
35 Kerk Street
Stellenbosch 7600
South Africa
Joint broker
Peel Hunt LLP
Moor House
120 London Wall
London EC2Y 5ET
United Kingdom
Joint broker
Berenberg
60 Threadneedle Street
London EC2R 8HP
United Kingdom
Property valuer
Cushman & Wakefield LLP
Rathenauplatz 1
60313 Frankfurt am Main
Germany
Independent auditors
Ernst & Young LLP
1 More London Place
London SE1 2AF
United Kingdom
Guernsey solicitors
Carey Olsen
PO Box 98
Carey House
Les Banques
St Peter Port
Guernsey GY1 4BZ
Channel Islands
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June 13, 2022 02:00 ET (06:00 GMT)
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